AGY-1741 | Ministry of Energy and Utilities

Full description

The Ministry of Energy and Utilities was established on 8 April 1999 to replace the former Department of Energy and to take on some related functions. (1) The new agency administered a range of legislation that regulated gas and electricity supply and distribution, various county councils, pipelines and power stations. On 28 May 1999 the staff attached to the Sydney Water Corporation Licence Regulator were transferred to the Ministry from the Department of Urban Affairs and Planning (2) The role of the Ministry was as follows:
To provide strategic policy advice and high level regulation for the management and utilisation of the State's energy resources in the context of competitive national energy markets;
To provide the Minister with advice on policy, regulatory and operational issues relating to electricity, gas and metropolitan water utilities;
To support the license regulator in monitoring the compliance of the Sydney Water and Hunter Water corporations and the Sydney Catchment Authority with the conditions of their operating licenses;
To ensure the smooth transition to competitive national markets in both gas and electricity; and
To have regulatory carriage of the greenhouse gas reduction requirements of electricity (3) The Director was the Chief Executive of the Ministry. Three assistant directors were respectively responsible for Strategic Policy; Energy Programs; and Planning and Electricity Distribution. The Strategic Policy Division was responsible for the Strategic Energy Reform and Policy and Statistics;
Energy Programs and Planning included Fuel Supply; Sustainable Energy Policy; Research Funding and Technology; Gas policy and Corporate Administration;
Electricity Distribution contained the Electricity Supply and Safety ;and Electricity Regulation and Policy Branches (4) The arrangements for the National Electricity Market (NEM) had been finalised in December 1998 prior to the establishment of the Ministry but the Ministry had considerable involvement in the implementation of the market including price regulation and transmission loss arrangements, establishing a panel to assist with co-ordination, developing mechanisms to deal with the National Electricity Market Management Company (NEMMCO) and the National Electricity Code Administrator (NECA). (5) The agency was also responsible for the certification and implementation of the national gas access regime in NSW and instituting reforms that encouraged competition in the gas industry. (6) The establishment on the Ministry soon after the implementation of the electricity and gas safety and reliability reporting regime saw it accepting industry codes of practice and introducing regulations under both electricity and gas safety legislation. The agency also implemented licence compliance monitoring in the electricity industry, producing appraisal guidelines and other documentation, and commenced water licence regulation performance audits. (7) In March 1999 the Minister for Energy approved the agency’s reviewed methodology for calculating greenhouse gas emissions from electricity in NSW and the agency developed guidelines for the gas industry compliance with environmental requirements. In addition the agency co-operated in national schemes for the abatement of greenhouse gas. (8) Research conducted by the agency in its first year of operation included regulating labels for minimum energy performance standards for some electrical appliances and approval of 14 new research projects under the Sustainable Energy Research and Development Fund. (9) The Market Implementation Group, established in the Treasury late in 1999 took over much the agency’s responsibility in relation to electricity market reform but the agency continued to supervise the network management and regulate greenhouse gas emissions of electricity retailers. The first Electricity Management Report was published by 30 June 2000. The report covered demand management, quality of supply, reliability and safety. (10) In May 2000 the government announced that the utility licensing and authorisation function would be transferred to the Independent Pricing and Regulatory Authority (IPART) and that responsibilities for gas appliances and gas meter reading transferred to the Department of Fair Trading. However the decision to transfer consumer protection in the energy sector to the Department of Fair Trading was reversed. (11) By 30 June 2002 the Chief Executive was known as Director- General and the senior executives consisted of four Executive Directors with respective responsibilities for organisational development; strategy; energy and utilities; and industry performance and a Corporate Counsel. (12) In the year ended 30 June 2002 the Ministry took on the following additional responsibilities:
Managing Energy Social Programs - previously a responsibility of the Department of Community Services;
Accrediting Electricity Service Providers that had been done by the Electricity Association of New South Wales that was abolished in December 2001;
Being the principal advisory agency to the Minister on the National Electricity Market Ministers Forum – a function taken over from the Treasury
Advising on electricity market reforms – also a former function of Treasury (13) The Ministry prepared policy, regulatory , technical and governance arrangements to enable full retail competition of the natural gas market in NSW to commence on 1 January 2002. (14) A customer information program was established to enable customers to make informed decisions in choosing their supplier (15) In May 2002 the Premier and the Minister announced a mandatory greenhouse benchmark scheme for the electricity industries. By 2007 retailers would be required to reduce their emissions by 5% of their 1989-90 levels. (16) In 21 June 2002 the first Statement of System Opportunities report was produced. The report reviewed demand for electricity in relation to system adequacy enabling customers to consider investment opportunities. (17) The Gas Supply Amendment (Retail Competition) Act 2001 ensured protection for customers in the retail natural gas market and promoted the convergence of the natural gas and electricity markets. (18). The Gas Supply (Natural Gas Retail Competition) Regulation 2001 sought to regulate the gas market by providing for standard contracts, regulating disconnection procedures, introducing a marketing code of conduct with terms and conditions and service standards; dispute resolution procedures and provisions for continuous supply. (19) In March 2002 the National Electricity Market Ministers’ Forum established an inter-jurisdictional working party chaired by the Ministry of Energy and Utilities. The role of the working party was to improve the governance arrangements for the Market. (20) On 28 November 2001 the Premier announced an investigation into laying power lines underground. The Ministry participated in the review and policy development and chaired the Technical Reference Group. The Independent Pricing and Regulatory Tribunal (IPART) investigated costs and benefits and funding options. (21) On 1 January 2002 the ministry took responsibility for the (Electricity) Life Support Rebates Scheme that had previously been with the Department of Community Services. The Scheme provided financial assistance for people who required long-term life support devices. (22) On 2 April 2003 the Ministry was augmented by the addition of the State Water business unit and the Town Water Treatment and recycling branch of the former Department of Land and Water Conservation. In addition the staff principally concerned with the Fish River Water Supply Scheme were transferred from the Department of Land and Water Conservation to the Ministry. (23) The Ministry was consequently responsible for:
18 major dams and over 200 weirs and regulators providing water for irrigation, town supplies and environmental flows; and
the Country Towns Water Supply and Sewerage Program that provided assistance to local water utilities across the State to upgrade water supply and sewerage schemes, implement integrated water cycle management planning and ensure best practice management of these assets. This transfer of these responsibilities was the catalyst for a major restructure of the agency but in the interim they were added to the existing structure as the State Water and Town Water branches. (24) The Electricity Supply Amendment (Greenhouse Gas Emission Reduction) Act 2002 became operational on 1 January 2003. This incorporated into legislation the mandatory greenhouse benchmarking scheme with penalties for participants who failed to meet their targets. Means for securing the reduction included higher output; co-firing with less greenhouse intensive fuels; improving the efficiency of generation and implementing demand abatement measures. The Ministry became the scheme administrator of the abatement certificates issued under the Act (25) The Ministry held the major role in the Energy and Utility Services Functional Area of the State Emergency Management Committee. It prepared a sub-plan that would provide support and restoration of electricity, water, sewerage, gas and petroleum in critical situations. (26) In its final year of operation the main activities of the Ministry were as follows:
Achieving electricity and gas network safety and reliability;
Administering the electricity contestable works accreditation scheme
Developing and promoting demand management
Improving the country towns water supply and sewerage program
Providing essential support for drought affected communities throughout NSW;
Developing improved and streamlined best practice and Management guidelines for local water utilities;
Encouraging and expanding integrated water cycle management practices;
Effectively participating in significant reforms to the structure of the National electricity market;
Implementing the Government energy management policy;
Addressing the future electricity needs of NSW;
Improving the greenhouse performance of NSW electricity retailers;
Supporting solar energy research;
Consolidating responsibility fir energy assistance and concession schemes;
Supporting the requirements of the Minister’s Office and the broader NSW Government. (27) The Ministry of Energy and Utilities was abolished on 1 January 2004 and its branches were added to the newly-established Department of Energy Utilities and Sustainability (28) Endnotes
(1) NSW Government Gazette 8 April, 1999 p. 2686-2687
(2) NSW Government Gazette 28 No. 63 28 May 1999 p. 3671
(3) Ministry of Energy and Utilities Annual Report for the year ended 30 June 1999 p, viii
(4) Ibid. p. vii
(5) Ibid. p. viii
(6) Ibid. p. viii- ix
(7) Ibid. p. ix
(8) Loc. Cit.
(9) Ibid. p. 10
(10) Ministry of Energy and Utilities report for the year ended 30 June 2000 p. 9
(11) Loc. Cit.
(12) Ministry of Energy and Utilities report for the year ended 30 June 2002 p. 5
(13) Ibid p. 6
(14) Ibid. p. 10
(15) Ibid. p. 7
(16) Loc. Cit.
(17) Loc. Cit.
(18) Loc. Cit. p. 11
(19) Loc. Cit.
(20) Ibid. p. 12
(21) Ibid. p. 13
(22) Ibid. p. 15
(23) NSW Government Gazette 2 April 2003 p. 4327
(24) Ministry of Energy and Utilities report for the year ended 30 June 2003 p. 8
(25) Ibid. p. 8-9
(26) Ministry of Energy and Utilities report for the year ended 30 June 2004 p. 4
(27) Ibid p. 4-7
(28) NSW Government Gazette 12 December 2003 p. 11208