Electricity Overview

The Electricity Act 1996 (and regulations) and the National Electricity (South Australia) Act 1996 (and the National Electricity Law and National Electricity Rules made under that Act), together with the Essential Services Commission Act 2002, provide the basis for regulation of the electricity supply industry in South Australia.

Regulatory Framework

The Electricity Act 1996 (and regulations) and the National Electricity (South Australia) Act 1996 (and the National Electricity Law and National Electricity Rules made under that Act), together with the Essential Services Commission Act 2002, provide the basis for regulation of the electricity supply industry in South Australia.

This legislation is intended to support competitive markets in the generation and retail sectors of the electricity supply industry, and provide regulatory oversight of the monopoly transmission and distribution network sectors of the industry, while ensuring that consumers are adequately protected in the competitive environment.

Major features of the regulatory regime include the establishment of:

• the Essential Services Commission, with specified regulatory powers in relation to the electricity supply industry, and with significant independence from Government. 
•  the Energy Industry Ombudsman scheme (EIO Scheme) which provides customers of licensed transmission, distribution and retail businesses with access to free an alternative dispute resolution mechanisms.
• The establishment of the Technical Regulator, under Part 2 of the Electricity Act 1996, which has responsibility for specified technical and safety matters in relation to the electricity supply industry.
• The establishment of the Australian Energy Market Operator, to perform various functions assigned to it (under Acts such as the National Electricity (South Australia) Act 1996), including operation of the National Electricity Market systems, the facilitation of market development, overseeing the management and development of transmissions services nationally and long-term planning for the National Electricity Market.

The principal functions and powers of the Essential Services Commission in relation to the electricity supply industry include:

• making determinations for the standing contract prices which may be charged by AGL SA Pty Ltd to each small customer that has not moved to a market contract with a retailer of the customer’s choice;
• administering the licensing regime for electricity entities (generation, transmission, distribution, retail and system control), including the issuing and ongoing monitoring of those licences;
• monitoring the performance of licensed entities with regulatory obligations imposed under Acts of Parliament, the licences they hold and industry codes, rules and guidelines issued by the Essential Services Commission and reporting on that performance;
• making industry codes (such as the Energy Retail Code, regulating the behaviour of licensed entities; and
• enforcing compliance with licensees’ regulatory obligations, including undertaking enforcement action as appropriate.

Legislation - Electricity Act

The Electricity Act 1996 is a key part of the framework for the regulation of the electricity supply industry in South Australia. The objects of the Act are to:

• promote efficiency and competition in the electricity supply industry;
• promote the establishment and maintenance of a safe and efficient system of electricity generation, transmission, distribution and safety;
• establish and enforce proper standards of safety, reliability and quality in the electricity supply industry; and
• establish and enforce proper safety and technical standards for electrical installations.

Under section 14 of the Act, the electricity supply industry is declared to be a regulated industry for the purposes of the Essential Services Commission Act 2002, so that the Essential Services Commission can exercise its regulatory powers and functions in respect of that industry including licensing, price regulation and performance monitoring.