AGY-502 | TransGrid

Full description

TransGrid, the business name of the Electricity Transmission Authority, was established by the Electricity Transmission Authority Act 1994 (Act No.64, 1994) which received assent on 23 November 1994 (1) and commenced on 1 February 1995. (2)

TransGrid’s role was previously performed by Pacific Power until June 30 1994 and then by PacificGrid Pty Ltd, a subsidiary of Pacific Power, from 1 July  1994 to 31 January 1995. (3) The Act provided for the functions of Pacific Power relating to electricity transmission, together with associated assets, rights, liabilities and staff, to be transferred to the new Commission.

The functions of TransGrid were to:
· manage, operate, control and maintain the State’s Electricity network
· balance electricity supply and demand
· ensure reliability and security of electricity supply
· enlarge the network in response to demand
· investigate and plan for future electricity transmission needs, including interconnection with other networks
· protect the public from the dangers of electricity transmission. (4)

The Electricity Legislation Amendment Act, 1995 (Act No.18, 1995) , assented to 19 June 1995 (5) and commencing 14 July 1995 (6), provided for the reconstitution of the Electricity Transmission Authority. This enabled the Authority to develop, implement, operate and administer a wholesale market for electricity and to facilitate the amalgamation of electricity distributors.

The objectives of the Authority were to be a successful business, by operating at least as efficiently as any comparable business and to maximise the net worth of the State’s investment in it, to consider the interests of the community and comply with the principles of ecologically sustainable development. In addition, the Board of the Electricity Transmission Authority, previously comprising seven Directors, was reconstituted to comprise five to seven Directors including the Chief Executive, three to five part-time directors appointed by the Governor on the recommendation of the Minister and one part-time director chosen by a selection committee from a panel of Labour Council representatives.

"Under the Electricity Supply Act, 1995 (Act No.94, 1995), assented to 21 December 1995 (7) and commencing 1 March 1996, (8) TransGrid became the State’s electricity Market and System Operator and was given power to:
· ensure security and reliability of the State’s electricity network
· regulate, monitor, control and co-ordinate electricity transmission
· administer the wholesale electricity market
· regulate the measurement of electricity supply through the network
· prepare, publish and supervise the implementation of rules, procedures and conditions for wholesale electricity market operation." (9)

Transmission pricing was regulated by the Independent Pricing and Regulatory Tribunal and distributors paid TransGrid directly for the use of the transmission system. (10)

On 14 December 1998 the Electricity Transmission Authority Act 1994 was repealed by the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998 (Act No.68, 1998). The later Act amended the Energy Services Corporations Act 1995 (Act No.95, 1995) constituting TransGrid as an energy services corporation and as a State owned corporation under the State Owned Corporations Act 1989. While the Electricity Transmission Authority was dissolved, TransGrid was taken for all purposes to be a continuation of, and the same legal entity as, the former Authority. (11)

The principal objectives of TransGrid as an energy transmission operator under section 6B of the Energy Services Corporations Act 1995, as amended, were:
(a) to be a successful business and, to this end:
(i) to operate at least as efficiently as any other comparable businesses,
(ii) to maximise the net worth of the State's investment in it,
(iii) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,
(b) to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,
(d) to operate efficient, safe and reliable facilities for the transmission of electricity and other forms of energy,
(e) to promote effective access to those transmission facilities.
Section 6B (2) provided that each of the principal objectives were of equal importance. (12)

TransGrid's functions as an energy transmission operator were:
(a) to establish, maintain and operate facilities for the transmission of electricity and other forms of energy, and
(b) to provide services for the transmission of electricity and other forms of energy in accordance with the relevant regulatory regime. (13)

The Electricity Network Assets (Authorised Transactions) Act 2015 (Act No.5, 2015) provided for the transfer of electricity network assets to the private sector or to any public sector agency. The meaning of electricity network assets was defined in the Act as the assets, rights and liabilities of an electricity network State Owned Corporation and associated electricity network land. The Act also provided for the transfer of network infrastructure assets that were wholly owned by an electricity network State Owned Corporation and formed part of or were used in connection with the operation of the distribution system, transmission system or street lighting system of the electricity network State Owned Corporation, meaning the electricity power lines and their supporting or protective structures and conduits; associated equipment; street lighting structures; buildings; plant and machinery (excluding motor vehicles); and, any freehold or leasehold interest in land. (14) Under the Act the transfer of electricity network assets to the private sector was to be by lease with an initial term not exceeding 99 years and the private sector interest in the State's electricity network assets was not to exceed 49%. (15) The asset value of TransGrid was determined to be $6,241.5 million. (16)

On 16 December 2015 the authorised transaction of TransGrid's electricity network assets was completed. (17) On 16 December 2015 following this transaction the electricity network State Owned Corporation known as TransGrid was converted into a corporation constituted as a Ministerial Holding Corporation with the name Electricity Transmission Ministerial Holding Corporation (ETMHC). (18) Immediately before the conversion TransGrid ceased to be a statutory State owned corporation for the purposes of the State Owned Corporations Act 1989. It also ceased to be an energy services corporation under the Energy Services Corporations Act 1995, unless the regulations provided otherwise, and its board of directors was dissolved. (19)

Endnotes
1. NSW Government Gazette No.162, 2 December 1994, p.7063.
2. NSW Government Gazette No.10, 1 February 1995, p.573.
3. TransGrid Annual Report, year ended 30 June 1996, introduction.
4. ibid.
5. NSW Government Gazette No. 79, 30 June 1995, p.3431.
6. NSW Government Gazette No.86, 14 July 1995, p.3679.
7. NSW Government Gazette No.160, 29 December 1995, p.8840.
8. NSW Government Gazette No. 26, 1 March 1996, p.831.
9. TransGrid Annual Report, year ended 30 June 1996.
10. ibid, p.6.
11. Energy Services Corporations Act 1995 (Act No.95, 1995), ss.6A and 13F as amended by the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998 (Act No.68, 1998), Sch. 1, cl.4; commencement NSW Government Gazette No.171, 11 December 1995, pp.9549-50.
12. Ibid., s.6B (1) and (2).
13. Ibid., s.6C.
14. Electricity Network Assets (Authorised Transactions) Act 2015 (Act No.5, 2015), ss.3-5.
15. Ibid., s.5 (1).
16. Ibid., s.6 (3) (d).
17. NSW Government Gazette No.114, 16 December 2015, p.4085 Completion order - TransGrid Authorised Transaction.
18. Ibid., Order under clause 6 (1) of Schedule 7.
19. Electricity Network Assets (Authorised Transactions) Act 2015, Schedule 7 cl.6 (a), (b) and (d).

References
NSW Government Directory 1993-96.