Yesterday, the Gas (Information Disclosure and Penalties) Amendment Bill (Bill) was introduced, which would empower regulations to be made to introduce mandatory information disclosure requirements for the gas market.
The Bill follows gas supply disruptions in 2018, which contributed to high electricity spot market prices. Some electricity industry participants made complaints to the Electricity Authority, which (among other things) raised concerns about whether gas supply outages were being fully disclosed to the market. It was apparent that, while electricity industry participants are subject to a mandatory continuous disclosure regime under the Electricity Industry Participant Code, gas producers are not. MBIE therefore consulted on options to improve information disclosure by participants in the gas sector and potential changes to the penalties regime for industry participants and consumers.
The Bill does not make substantive changes in and of itself, but amends the framework to expand the scope of regulation-making powers. If enacted, the Bill would clarify that gas governance regulations could;
- specifically provide for arrangements relating to outages and other security of supply contingencies in relation to any markets for gas; and
- require data and information to be provided and disclosed by any industry participant or consumer.
The Gas Industry Company is currently consulting on a proposed new regime for information disclosure in the wholesale gas sector, and the Bill will expressly legitimise the work that was started in advance of the Act being passed.
The Bill would also make a number of changes to provisions relating to enforcement and penalties, including to increase the maximum penalty able to be imposed by the Gas Rulings Panel from $20,000 to $200,000, to better align with equivalent penalties in the electricity sector.
The amendments proposed in the Bill can also be traced to a recommendation in the Electricity Price Review that the Government should amend the law (if needed) to strengthen the powers of the Electricity Authority and the Gas Industry Company to regulate information disclosure. The Review combined the two on the basis that gas supply shortages affect electricity generation. The Electricity Authority's updated 2019/20 work programme specifically includes:
- identifying gaps in the Authority's power to require further information disclosure; and
- strengthening disclosure rules to include information on the availability of generation fuel.
The Electricity Authority's first phase of disclosure review (focussed on thermal fuels) is expected to be completed by Q2 2020/21. The work programme indicates that this is sequenced to commence once the disclosure work in the gas industry has sufficiently progressed.
MBIE's consultation on amending the Gas Act can be found here, and a full text of the Bill can be found here.