PUO: Removal of generation licensing

WEM Information

Nov 23
PUO: Removal of generation licensing

During January and February 2016, the Public Utilities Office (PUO) consulted on a proposal to remove the obligation on electricity generators to hold a generation licence.  Being licensed requires the generator to deliver to agreed standards in service delivery, asset management and other business matters.

The PUO noted that generation licensing has the least number of associated compliance obligations, compared to other licence holders (such as for network and retail licensees).  Furthermore, generators have a good compliance record.  Proponents of the proposal argued that the cost of generators complying with licensing requirements now outweighed the benefits of having licensed generation.

Eleven submissions were received and the proposal was supported by an overwhelming majority of respondents and was subsequently endorsed by the Minister for Energy.

On 14 September 2016, the Licensing and Other Authorisations Amendment Bill 2016 was introduced in State Parliament to enact the changes required to the Electricity Industry Act 2004 to give effect to this proposal.  The bill has had its second reading but has not yet been passed.  Given that Parliament is now dissolved for 2016 and will be in caretaker mode when sitting resumes in early 2017, in preparation for the State Election on March 2017, this bill will not pass before the election.  Therefore, until the bill is passed it is necessary for generators to continue to comply with the generation licensing obligations.