The Energy Coordination Act 1994 (the Act) governs the operation and regulation of the Western Australian gas industry.
The Act provides that a person must not in a supply area or part of a supply area -
(a) construct, alter or operate a distribution system; or
(b) transport gas through a distribution system,
except under the authority of a distribution licence granted by the Economic Regulation Authority that applies to that area or that part of that area.
Under section 11H of the Act, the Governor may exempt any person or class of persons from requiring a licence for such a purpose. Where granted, licence exemption orders are published in the Government Gazette. In some circumstances, a licence exemption may be conditional.
The Office of Energy administers exemptions from licensing as required under the Act.
View or download the Energy Coordination Act 1994 by visiting http://www.slp.wa.gov.au/statutes/av.nsf/ooe.
Under the Act, an applicant for a licence exemption is required to demonstrate that granting a licence exemption would not be contrary to the public interest on the following grounds:
(a) environmental considerations;
(b) social welfare and equity considerations, including community service obligations;
(c) economic and regional development, including employment and investment growth;
(d) the interests of gas customers generally or of a class of gas customers;
(e) the interests of any licensee, or applicant for a licence, in respect of the supply area or part of a supply area to which the order, if made, would
apply;
(f) the importance of competition in gas industry markets;
(g) the policy objectives of government in relation to the supply of gas; and
(h) any other matter that he or she considers relevant.
Other issues, such as safety and reliability, may be taken into account.
The Office of Energy considers licence exemptions on its own initiative.
The Office of Energy will consider proposed licence exemptions and provides the report linked below for public comment. Following a period for public comment, the Office of Energy has advised the Minister for Energy. The Governor may grant an exemption on advice from the Minister for Energy.
Link to Report on Gas Licence Exemptions
Licence exemptions under consideration will be made available on this page for public comment, unless otherwise agreed with the Office of Energy. Any person or organisation may make a submission. If aspects of the submission are considered confidential, those aspects should be clearly identified and the reasons for a claim of confidentiality noted in a covering letter.
Written (electronic or hard copy) public comments on licence exemptions under consideration should be provided by 5pm (WST) on 8 May 2008 to:
Gas Licence Exemptions Public Comment:
C/- Coordinator of Energy
Office of Energy
Level 9, Governor Stirling Tower
197 St Georges Terrace
Perth WA 6000
By email: licence-exemptions@energy.wa.gov.au
(Electronic submissions are strongly encouraged.)
Public comments will also be made available through the Office of Energy website.
General queries about making an application can be addressed to:
Office of Energy
Electricity Licence Exemptions
Level 9, Governor Stirling Tower
197 St Georges Terrace
Perth WA 6000
Or by email to: licence-exemptions@energy.wa.gov.au. Electronic queries are encouraged.
For more information, please contact Mr Leo Zaza at the Office of Energy on (08) 94205679
On-selling of Gas in Group Housing
The Secretariat of the Economic Regulation Authority wrote to the Office of Energy indicating that it has legal advice indicating that there may be an ambiguity within the Energy Coordination Act 1994, which relates to whether operators of multi unit residential developments (strata title management companies) and retirement villages need to be licensed for “on-selling” gas. Generally the on-selling of gas is far less prevalent than the on-selling of electricity.
The State Solicitor confirmed the ambiguity and indicated that on balance an exemption should be granted to clarify that no licence is necessary.
It is proposed that the exemption be a general unconditional exemption subject to those parties “on selling” gas only passing through the cost of the gas.
Alinta and the ERA Secretariat advised the Office of Energy that the Capricorn Village Joint Venture (CJV) was constructing a gas distribution system. CJV subsequently wrote to Office of Energy seeking an exemption. CJV was developing a major residential sub division near Yanchep. CJV decided to construct the gas reticulation system servicing its land subdivision (at the same time as constructing other required services) although connection to the nearest gas main was unlikely in the short term.
The cost of constructing a gas reticulation system at the same time as other services is 20% of the cost of construction a gas reticulation system later. In addition, retrofitting a subdivision with a gas distribution system is in most cases non commercial for the gas distributor.
The distribution system was being constructed to Alinta Networks standards and audited by the Office of Energy Safety. In the process of the audit Energy Safety raised the issue of the need for licence for construction.
The Economic Regulation Authority Secretariat was of the view that construction of a gas distribution system was required to be licensed under the Energy Coordination Act 1994. It was of the view that the Office of Energy should consider providing CJV with an exemption from the need to be licensed. .
The State Solicitor, confirmed that a land developer constructing a gas reticulation system (not immediately planned to be connected to the State’s gas distribution system and used to transport gas) requires a licence or licence exemption.
Unfortunately, the ERA licensing requirements are quite onerous and would act as an impediment to land developers servicing residential subdivisions with a gas reticulation system particularly in areas ahead of the development front.
The Office of Energy has been advised by consultants working for the property development industry and individual property developers that the CJV situation is unlikely to be a one off. Subsequently the Office of Energy became aware that other developers were in a similar situation as CJV.
It is Government Policy to encourage the development of gas reticulation systems.
Exemption under consideration |
Type of exemption or conditions |
Explanation |
Closing date for public comment |
Received public comment |
Draft Report |
Closing date for public comment on Draft Report |
Public comment on Draft Report |
Status |
Property Developers for the construction of gas reticulation systems in property sub divisions. |
Exemption from the need to hold a licence for the construction of gas distribution systems. Conditional on: 1.the gas distribution system being constructed to appropriate technical safety standards; and 2.appropriate arrangements with licensed gas distributors and retailers. |
Property developers have been constructing gas distribution systems at the same time as providing other services to property developments, in some cases well before the gas distribution system has been extended to the property development. It is Government Policy to encourage the construction of gas reticulation systems |
1 February 2008 |
No comments received. |
Prepared. |
6 May 2008. |
No comments received. |
Report provided to Minister. |
Exemption from the need to hold a licence for the construction of gas distribution systems. |
CJV Included in consideration of general exemption for property developers to construct gas distribution system. |
1 Feb 2008 |
No comments received. |
Prepared. |
6 May 2008. |
No comments received. |
Report provided to Minister. | |
General Exemption for the “On Selling” of gas |
A person is exempt if the gas is sold for consumption on premises under the control or management of the supplier. Consideration of a condition of no disadvantage to consumer. |
No comments received. |
Prepared. |
6 May 2008. |
No comments received. |
Report provided to Minister. |
