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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Australian Local Power Agency Bill 2021
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Circulated by authority of Dr Helen Haines MP Member for Indi
Australian Local Power Agency Bill 2021
OUTLINE
This Bill establishes a new corporate Commonwealth entity, the Australian Local Power Agency
(ALPA), which is responsible for driving investment into community energy projects, and for
ensuring that regional communities share in the benefits of renewable energy.
ALPA has three primary functions: to provide financial assistance for the development of community
energy projects; to provide technical support to organisations developing community energy
projects; and to invest in community energy projects.
In addition, ALPA has supplementary functions including the collection and dissemination of research
and information regarding community energy projects, and providing advice to the Minister.
The Bill sets out a definition of community energy projects, which are renewable energy projects
(including energy storage and energy efficiency) mainly carried out by the local community, whose
main purpose is to benefit the community, and in which the community has a significant role in
decision-making.
The Bill establishes ALPA as a sister-body to ARENA and the CEFC. The Bill establishes the ALPA
Board and the offices of the ALPA CEO and CFO. The Bill ensures that the Board has requisite
knowledge of community energy, renewable energy, regional development, Indigenous
community development and natural resource management to properly execute its functions.
Operationally, ALPA's financial and technical support functions will be guided by a general strategy.
The Board is responsible for developing the general strategy and the Minister for approving it.
ALPA's investment function will be guided by an Investment Mandate. The Minister will be
responsible for developing the Investment Mandate, and the Board must be consulted in its
development. These arrangements mirror the operational design of ARENA's general financial
strategy, and the CEFC's Investment Mandate.
In addition, this Bill establishes a new requirement for large renewable energy projects to offer the
rights to at least 20% of the profits of a project to local individuals living within 30 kilometres of that
project. From 1 July 2023, renewable energy projects above 10MW will be required to receive
approval from the Minister. That approval may only be granted if the Minister is satisfied, on the
advice of ALPA, that locals have been offered a reasonable opportunity to invest the project. If the
relevant individuals opt not to invest in a project, once it receives approval from the Minister (on
advice of ALPA) it may proceed as usual and seek other investors.
RATIONALE
ARENA and the CEFC were established around a decade ago in order to develop and
commercialise renewable energy technologies. Under successive Governments, they have proven
remarkably successful and Australia now enjoys a high rate of deployment of renewable energy
technologies. Under current policy settings, the Government's official projections indicate this
trend of significant investment in renewables in regional Australia will continue.
However the benefits of this investment are not always apparent in regional communities. As we
position the nation for the next decade in the renewable energy transition, we must do more to
capture the benefits of renewables, ensuring they become a genuine driver of enduring prosperity.
ALPA empowers regional Australia to capture the benefits of this boom, through more local jobs,
new income streams, more local decision-making and a genuine stake in this booming industry.
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FINANCIAL IMPACT
This bill complies with the financial initiative rules for private members bills.
ALPA would only be able to begin operating if an appropriation from the Consolidated Revenue
Fund is made under an Act for payment for the purposes of the Australian Local Power Agency.
The Parliamentary Budget Office published an official costing for the Australian Local Power
Agency for the 2019-20 Budget.
The total departmental expenses for the forward estimates from the 2019-20 Budget would
decrease the underlying cash balance by $10.3 million. The total administered expenses would
decrease the underlying cash balance by $220.8 million over the forward estimates.
The official costing is available here.
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NOTES ON CLAUSES
Part 1 - Preliminary
Clause 1: Short Title
This clause specifies that the Act may be cited as the Australian Local Power Agency Bill
2021.
Clause 2: Commencement
This clause provides for the commencement of the Act on the day it receives Royal Assent.
Clause 3: Objects of this Act
This clause sets out the objects of the Bill, which are to support the development of
community energy projects in Australia, to increase the competitiveness of renewable
energy supplied by community energy projects and to ensure that regional communities
share in the benefits of renewable energy.
The objects specify that the aim of the Bill is to support community energy as defined in the
Act, and also to promote broader sharing of the benefits of the renewable energy industry
in regional Australia.
Clause 4: Definitions
This clause defines key terms used in the Bill.
Clause 5: Meaning of a community energy project
This clause defines a community energy project for the purpose of the Bill. It stipulates that
a project is a community energy project if it satisfies four criteria:
The main activity of the project is generating renewable energy, storing energy or
increasing energy efficiency;
The project is carried out mainly by the community or by community organisations;
The main purpose of the project is to benefit the community or community
organisations;
The community has a significant role in decision-making on the project.
The clause stipulates that the ALPA Board must make guidelines setting out the
circumstances, conditions or other matters to which it will have regard in satisfying itself
that a project is a community energy project, according to the four criteria outlined above.
The meaning of "benefit" is intended to refer to both economic benefits in terms of local
employment, skills, income sources, investment opportunities, and social benefits in terms
of community development, social cohesion, energy security, and local empowerment.
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The meaning of "community" is intended to refer to a group of people living in the same
place or region and sharing a common characteristic or sense of identity.
Clause 6: Financial Assistance
This clause specifies that the Minister may, by legislative instrument, designate any type of
assistance as financial assistance for the purposes of the Act.
Part 2 - Australian Local Power Agency
Division 1 - Establishment, functions, powers, etc
Clause 7: Establishment
This clause would establish ALPA as a body corporate. It must have a corporate seal, and
may sue and be sued. ALPA would be a 'Commonwealth authority' for the purposes of the
Public Governance, Performance and Accountability Act 2013.
Clause 8: ALPA's functions
This clause sets out the functions of ALPA. ALPA has three primary functions:
Its financial assistance function, which is to provide financial assistance for research
into community energy projects; the development, commercialisation or
deployment of community energy projects; or the storage and sharing of
information or knowledge about community energy projects (as detailed in Division
2, Clause 15)
Its investment function, which is to invest, directly and indirectly, in community
energy projects (as detailed in Division 3, Clause 20)
Its technical expertise function, which is to provide technical expertise (including to
governments, community organisations and the public) for the purposes of
developing community energy projects. Such technical expertise refers to, inter alia,
engineering, financial, legal, policy, stakeholder engagement and other types of
expertise relevant to community energy projects.
In addition to its primary functions, ALPA has a number of additional functions, including:
to enter into agreements for the purpose of performing its financial assistance
function and to administer such agreements;
to collect, analyse, interpret and disseminate information and knowledge relating to
community energy projects;
to provide advice to the Minister relating to community energy projects;
to liaise with relevant persons and bodies, including the Australian Renewable
Energy Agency, the Clean Energy Finance Corporation, the Clean Energy Regulator,
other Commonwealth agencies and State and Territory governments;
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any other functions that are prescribed by the regulations;
any other functions conferred on ALPA by this Act or any other Commonwealth law;
to do anything incidental to, or conducive to, the performance of the above
functions.
Clause 9: General rules about performance of functions
This clause provides that, in performing its functions, ALPA must act in a proper, efficient
and effective manner and if appropriate to act collaboratively with other agencies and to
promote the sharing of information and knowledge about community energy projects.
Clause 10: Minister may direct ALPA to provide advice
This clause specifies that the Minister would be able to direct ALPA to provide, in writing,
advice in relation to community energy projects, including the things specifically mentioned
in clause 8(g), those being:
increasing the number of community energy projects in Australia;
increasing the competitiveness of renewable energy supplied by community energy
projects in Australia;
ensuring that regional communities share in the benefits of renewable energy.
Clause 11: Constitutional limits
This clause ensures that ALPA will only be able to perform its functions within the limits on
Commonwealth power imposed by the Constitution of Australia.
Generally speaking, ALPA would be likely to exercise its power to provide financial
assistance in relation to either the corporations power (that is, it would provide financial
assistance to or otherwise for the benefit of a foreign, trading or financial corporation), or in
order to give effect to Australia's obligations under the Climate Change Convention (that is,
it would provide financial assistance in a way which will assist Australia to meet its
obligations under the Climate Change Convention).
Specific mention is made in clause 14(f) of the provision of financial assistance to the
Commonwealth. This recognises that ALPA may on occasion fund a Commonwealth agency
in relation to an activity or project consistent with ALPA's functions.
Clause 12: Powers
This clause would give ALPA the power to do all things necessary or convenient to be done
for or in connection with the performance of its functions. This includes the power to enter
into contracts, the power to acquire, hold and dispose of real and personal property and the
power to accept, otherwise than on trust, gifts, devises, bequests or other payments of
money. ALPA will not have the power to be a trustee.
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Clause 13: ALPA does not have privileges and immunities of the Crown
This clause would make clear that ALPA does not enjoy the privileges and immunities of the
Crown in right of the Commonwealth, other than those provided by legislation or the
Constitution.
Clause 14: Taxation
This clause specifies that ALPA is not subject to taxation under a law of the Commonwealth
or a State or Territory.
Clause 15: ALPA's financial assistance function
This clause outlines the purposes for which ALPA can provide financial assistance under its
financial assistance functions. These are:
research into community energy projects;
the development, commercialisation or deployment of community energy projects;
the storage and sharing of information and knowledge about community energy
projects.
Clause 16: General rule about performance of financial assistance function
This clause stipulates that in performing its financial assistance function, ALPA must ensure
that decisions about the provision of financial assistance are based on merit.
Clause 17: Provision of financial assistance to be in accordance with general strategy
This clause stipulates that ALPA can only provide financial assistance in accordance with the
general strategy that is in force under Subdivision A of Division 2 of Part 3 at the time when
the agreement is entered into.
Clause 18: Minister may request ALPA to consider funding for specified projects
This clause stipulates that the Minister may request ALPA to consider providing financial
assistance for a particular project, and that ALPA must consider that request.
Clause 19: Ministerial approval where grants exceed $50 million
This clause stipulates that ALPA can only make grants totalling more than $50 million for a
particular project with the written approval of the Minister. The purpose of this clause is to
provide an additional layer of oversight for the administration of grants involving significant
sums of money. This mirrors a similar provision in the ARENA Act.
Division 3 - ALPA's investment function
Subdivision A - ALPA's investment function
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Clause 20: Investment function
This clause describes ALPA's investment function. It stipulates that ALPA's investment
function is to invest, directly and indirectly, in community energy projects.
Subclause 20(2) stipulates that ALPA may invest in businesses or projects for the
development or commercialisation of community energy projects, or in businesses that
supply goods or services needed to develop or commercialise community energy projects.
Clause 21: Complying investments
This clause stipulates that ALPA may only make investments that are complying
investments, and defines complying investments as:
in community energy projects, as per the definition in section 5 of the Bill;
solely or mainly Australian based, as per the definition in section 22 of the Bill;
not in a prohibited technology, as per the definition in section 23 of the Bill.
Subclauses 21(3-7) outlines the steps the Board must take if it becomes aware than an
investment made under the investment function is not a complying investment, and
subsequently the steps the Minister must take if informed by the Board of an investment
that is not a complying investment.
Clause 22: Australia-based investments
This clause stipulates that the Board must set out guidelines outlining the circumstances in
which it will regard an investment as Australia-based, and stipulates an investment is
considered to be Australia-based if the Board is satisfied it meets those guidelines.
Clause 23: Prohibited technology
This clause stipulates that an investment made under the investment function is in a
prohibited technology if it is an investment in a project involving:
carbon capture and storage;
nuclear technology;
nuclear power;
coal or gas power.
The purpose of ALPA is to drive investment in community energy projects utilising
renewable energy, storage technologies or energy efficiency. Clause 23 makes clear that
ALPA cannot be used to drive investment in fossil fuel or nuclear technologies.
This clause is intended to prohibit investments in projects utilising carbon capture and
storage indirectly, including blue hydrogen projects employing processes including, but not
limited to, coal gasification or steam methane reforming.
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Subdivision B - Performance of investment function
Clause 24: Financial assets
This clause stipulates that ALPA and its subsidiaries may only make investments through the
acquisition of financial assets.
Subclause 24(2) outlines that a financial asset is defined as either:
an asset that in accordance with GFS Australia is treated as a financial asset for the
purpose of the GFS system; or.
an asset specified in regulations made for the purpose of the ALPA Bill.
GFS refers to Government Finance Statistics, an accrual financial measurement and
reporting system designed to support economic analysis of the public sector. It can be
accessed on the Department of Finance website.
Clause 25: Investment Mandate
This clause stipulates that the Minister may give the Board an Investment Mandate which
sets out the policies to be pursued by ALPA in regard to, among other factors:
matters of risk and return;
technologies, projects and businesses that are eligible for investment;
the allocation of investments between various classes of community energy projects.
The Investment Mandate is a legislative instrument. The Minister is required to give at least
one such direction to the Board.
Clause 26: Limits on Investment Mandate
This clause stipulates that the Minister must not give a direction under section 25(1) that is
either inconsistent with this Act, or which may require the Board to make or not make a
particular investment.
Clause 27: Board to be consulted on Investment Mandate
This clause requires that before giving the Board a direction under section 25(1), the
Minister must send a draft of the direction to the Board, invite the Board to make a
submission on the draft direction within a reasonable time limit, and consider that
submission from the Board.
Subclause 27(2) stipulates that if the Board makes a submission to the responsible Ministers
on the draft direction within the specified time limit, then the submission must be tabled in
each House of Parliament with the direction.
Clause 28: Compliance with Investment Mandate
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This clause stipulates that the Board must take all reasonable steps to ensure that ALPA and
its subsidiaries comply with the Investment Mandate, and outlines the steps it must take if it
becomes aware that either ALPA or one of its subsidiaries has failed to comply with the
Investment Mandate.
Clause 29: Derivatives
This clause stipulates that ALPA may only acquire a derivative under certain conditions.
Division 4 - Community investment in large renewable energy projects
Clause 30: Community investment in large renewable energy projects
This clause stipulates that from 1 July 2023, any new large renewable energy project will
require approval from the Minister, and sets out the conditions in which that approval may
be granted.
Subclause 30(1a) stipulates that such a scheme must cover projects involving the
construction, modification or expansion of a large renewable energy facility in Australia.
Subclause 30(1b) stipulates that such approval must be granted if, and only if, the Minister
is satisfied that on the basis of advice given to the Minister by ALPA, that all individuals
living within 30 kilometres of the facility have been given a reasonable opportunity to invest
in the project in accordance with subclause 30(3).
Subclause 30(2) stipulates that a large renewable energy project is defined as a renewable
energy generation facility that has a maximum capacity of 10 MW or more.
Subclause 30(3) stipulates that, for the purposes of the subclause 30(1b), the opportunity to
invest must involve rights to at least 20% of the profits of the project being offered to locals.
That opportunity must afford locals reasonable opportunity to consider and respond to the
offer, which must be made in regard to the market value of the rights, and must be
structured in such a way that it is intended to ensure the rights are acquired by a large
number of locals, rather than just a few individuals.
Subclause 30(4) outlines that once the rights mentioned in subclause 30(3) have been
offered and that offer then closes, those rights may be offered to anyone else, to the extent
that the locals do not accept the offer. This means that once the community investment
opportunity has been completed, the project may seek other investors as normal.
Subclause 30(5) outlines matters on which additional regulations may be made:
the matters that ALPA must take into account in giving advice to the Minister on
whether a community has been given reasonable opportunity to invest in a large
renewable energy project;
delegation of the Minister's power to approve a project;
review of the decision not to approve a project;
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penalties, not exceeding 1000 penalty units, for offences against regulations made
for the purposes of subclause 30(1);
pecuniary penalties, not exceeding 10,000 penalty units, for contravening civil
penalty provisions in regulations made for the purpose of subclause 30(1).
This subclause allows the Government to impose penalties for failing to offer a community
investment opportunity in accordance with the provisions of this section.
1000 penalty units is currently the equivalent of $222,000. 10,000 penalty units is the
equivalent of $2,220,000.
Subclause 30(6) stipulates that this section - and therefore the requirement to offer a
community investment opportunity - applies to a project if the project starts to be carried
out on or after 1 July 2023. This means the requirement will not be retrospective, and will
only apply to new projects that begin on or after 1 July 2023.
Subclause 30(7) stipulates that the first regulations establishing a scheme for the purpose of
subclause 30(1) must be made on or before 1 July 2022.
This timeframe allows more than two years for the Government to fully design and
implement a scheme that gives effect to this section, with a requirement to begin at least
one year before the scheme comes into effect.
Part 3 - Board of ALPA
Division 1 - Establishment and functions
Clause 32: Establishment
This clause establishes the Board of ALPA.
Clause 33: Functions of the Board
This clause outlines the functions of the ALPA Board. These functions are:
the functions of the Board under Division 2 of the Bill, relating to making general
strategies, guidelines, work plans and investment policies;
to decide the other strategies, objectives and policies to be followed by ALPA; and
to ensure that ALPA complies with the ALPA Bill.
Sub-clause 33(2) stipulates that the Board has the power to do all things necessary or
convenient to be done for or in connection with the performance of its functions.
Sub-clause 33(3) would provide that anything done in the name of, or on behalf of, ALPA by
the Board, or with the authority of the Board, is taken to have been done by ALPA.
Division 2 - General strategy, guidelines and work plans
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Subdivision A - General strategy
Clause 34: General strategy
This clause would require the Board to develop a general strategy for each financial year
starting with 2021-22. The general strategy must state ALPA's principal objectives and
priorities for:
the provision of financial assistance (Clause 8A)
the collection, analysis, interpretation and dissemination of information and
knowledgerelating to community energy projects by ALPA (Clause 8F)
the provision of technical expertise (Clause 8D)
anything else prescribed the regulations (Clause 8I)
The general strategy must cover the period of the financial year for which it is developed,
and for the next two financial years. In other words, each year there will be a new general
strategy, which will relate to a three-year period ahead.
The general strategy must not require ALPA to give financial assistance to a particular
person or for a particular project.
As an example, the general strategy could describe how ALPA will allocate and prioritise the
provision of financial and technical assistance for the support of research, development,
demonstration and commercialisation of community energy projects to achieve its aims and
objectives. Such a description might include information on:
the challenges and barriers that financial and technical assistance is intended to
overcome and a strategic overview of how this assistance will assist in overcoming
those challenges and barriers;
the broad principles to be adopted in selecting projects and providing assistance to
support community energy;
the model through which ALPA proposes to provide technical assistance, for instance
through local hubs in regional cities and towns.
Clause 35: Approval of general strategy
This clause stipulates that the general strategy requires the approval of the Minister. The
Board must, as soon as practicable after developing a general strategy, provide a copy of the
strategy to the Minister for approval.
Sub-clause 35(2) stipulates that the general strategy is a legislative instrument made by the
Minister on the day on which it is approved by the Minister, but it would exempt the
strategy from the operation of section 42 of the Legislation Act 2003, relating to
disallowance. That is, it would not be a disallowable instrument.
It is considered that the requirement for each general strategy to be approved by the
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Minister will ensure sufficient accountability in the preparation of these instruments. The
exemption is consistent with the position of Ministerial directions to any person or body,
which are legislative instruments not subject to disallowance by virtue of item 2 of the table
in Section 9 of the Legislation (Exemptions and Other Matters) Regulation 2015.
This exemption is also consistent with the ARENA Act which stipulates that general funding
strategies approved under that Act are legislative instruments exempt from disallowance.
Clause 36: When a general strategy for a year is in force
This clause provides that a general strategy for a financial year comes into force at the later
of two possible times, being either the start of the financial year (if the Minister approved
the strategy before the end of the previous financial year), or the time when the Minister
approves the strategy (if the Minister approved the strategy after the beginning of the new
financial year).
A general strategy would cease to be in force when the strategy for the next financial year
comes into force. That is, although general strategies would each cover a three-year period,
they would be replaced every year.
Clause 37: Variation of a general strategy
This clause stipulates that Board must regularly review the general strategy during a
financial year,and that Board has the power to vary a general strategy that is in force.
However, any such variation would require approval by the Minister.
Sub-clause 37(6) provides that a variation of a general strategy is a legislative instrument
made by the Minister on the day on which it is approved by the Minister, but it would be
exempt the variation from the operation of section 42 of the Legislation Act 2003, relating to
disallowance.
This exemption is included for the same reasons given in relation to ALPA's general
strategies (see the discussion of clause 35, above).
Clause 38: General strategy to be published on ALPA's website
This clause would require the Board to ensure that the general funding strategy that is in
force from time to time is published on ALPA's website.
Subdivision B - Guidelines
Clause 39: Guidelines
This clause stipulates that the Board has the power to develop written guidelines in relation
to the provision of financial assistance under this Bill, and to vary or revoke such guidelines.
This clause mirrors a similar provision in the ARENA Act.
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Guidelines would be required for a grant program if, under the program, the total of all
grants for a particular project could exceed $15 million. However, it is the intent of the Bill
that ALPA develops guidelines for all grant programs.
In some cases, guidelines or a variation or revocation of guidelines would require approval
by the Minister under clause 40.
Sub-clause 39(5) would provide that guidelines developed by the Board, and any variation or
revocation of such guidelines, are not legislative instruments. This provision is included to
assist readers. Guidelines, variations and revocations would not be legislative instruments as
they are not legislative in character, and therefore not within the meaning of Section 8 of
the Legislation Act 2003.
Clause 40: Approval of guidelines for financial assistance in excess of $15 million
This clause stipulates that guidelines developed by the Board will require approval by the
Minister if the guidelines are for a grant program under which individual grants, or multiple
grants for the same project, could exceed $15 million.
Sub-clause 40(1) would require the Board to give such guidelines to the Minister, for his or
her approval. This requirement would also apply to any variation of such guidelines, (unless
the variation is of a minor nature) and would apply to any revocation of such guidelines.
If a grant program which is not subject to this clause were to be varied so that it became a
program to which subclause 39(2) applies, then ALPA would be required to develop
guidelines for the program.
Sub-clause 40(2) would require the Board to inform the Minister of any variation of such
guidelines that is of a minor nature. Subclause 40(3) specifies the commencement time for
guidelines, variations and revocations.
Clause 41: Guidelines to be published on ALPA's website
This clause would require the Board to ensure that any guidelines that are in force from
time to time are published on ALPA's website.
Subdivision C - Work plans
Clause 42: Work plan
This clause would require the Board to develop a work plan for each financial year, setting
out details of:
how ALPA's general strategy for the financial year is proposed to be
implemented during the year; and,
the main activities proposed to be undertaken by ALPA and the Board during the
year and how they are proposed to be undertaken.
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The Board may vary a work plan in writing.
Sub-clause 42(4) stipulates that the work plan must not deal with carrying out ALPA's
investment function. This is because the investment function will be guided by the
Investment Mandate (Clause 25).
A work plan or variation of a work plan will not require the Minister's approval, but the
Board will be required to give the Minister a draft of each work plan or variation, and
have regard to any comments or requests made by the Minister in relation to the draft
(sub-clause 42(6)). The Board will also be required to give a copy of each finalised work
plan to the Minister (sub-clause 42(1)).
Sub-clause 42(8) would provide that a work plan developed by the Board is not a legislative
instrument. This provision is included to assist readers. A work plan would not be a
legislative instrument as it is not legislative in character, and therefore not within the
meaning of section 8 of the Legislation Act 2003.
Clause 43: Work plan to be taken into account
This clause would require the Board and the CEO, when performing functions and
exercising powers in a financial year, to take into account the work plan for the
financial year.
However, subclause 43(2) stipulates that this requirement does not apply for ALPA's
investment function. This is because the investment function is guided by the
Investment Mandate (Clause 25). This clause is included for clarity.
Clause 44: Investment policies
This clause stipulates that the Board must formulate written policies in relation to ALPA's
investment strategy, benchmarks and standards for assessing the performance of ALPA's
investments, and risk management.
Subclause 44(2) stipulates that the Board must ensure that the investment policies are
consistent with the Investment Mandate.
The Board must ensure that the investment policies are published on the ALPA website, and
that the first policies should be published as soon as practicable and no later than 1 July
2022.
If there is a change in the Investment Mandate, the Board must review any affected
policies. The Board must also conduct periodic reviews of the policies.
Subclause 44(9) stipulates that policy formulated under this clause is not a legislative
instrument as it is not legislative in character, and therefore not within the meaning of
Section 8 of the Legislation Act 2003.
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Division 3 - Board members
Clause 45: Membership
This clause stipulates that the Board will consist of up to 6 appointed members and the
Secretary of the Department.
Clause 46: Appointment of Board members
This clause stipulates that Board members (other than the Secretary) are to be appointed by
the Minister by written instrument, on a part-time basis.
Subclause 46(2) stipulates that in appointing the Board members, the Minister must ensure
that the Board, taken as a whole, has experience or knowledge of the following:
community energy projects;
regional development;
Indigenous community development;
development or commercialisation of renewable energy businesses;
environmental and natural resource management.
This is intended to ensure that the Board, as a whole, has the requisite experience and
knowledge to effectively execute its full range of functions.
Clause 47: Chair
This clause would require the Minister to appoint one Board member to be the Chair of the
Board, by written instrument.
Clause 48: Term of appointment
This clause would limit the maximum term of appointment of each Board member
appointed under clause 46 to a period of 2 years, and the maximum continuous period for
which each may hold office to 6 years.
Clause 49: Acting appointments
This clause outlines the provisions for the appointment of acting Board members.
Clause 50: Remuneration
This clause details the system for the remuneration of Board members appointed under
Clause 46. It would have effect subject to the Remuneration Tribunal Act 1973.
Sub-clause 50(1) stipulates that Board members appointed under clause 46 are to be paid
the remuneration that is determined by the Remuneration Tribunal, provided that there is
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an applicable determination in operation. Otherwise, such Board members are to be paid
the remuneration that is prescribed by the regulations.
Clause 51: Leave of absence
This clause deals with the granting of leave of absence to Board members who are
appointed under Clause 46.
Clause 52: Disclosure of interests to the Minister
This clause stipulates that Board members must give written notice to the Minister under
the Public Governance, Performance and Accountability Act 2013. If a Board member does
not make relevant disclosures to Minister under Clause 52(1), they are taken not to have
complied with section 29 of the Public Governance, Performance and Accountability Act
2013.
Clause 53: Resignation of appointed members
This clause deals with the resignation of appointed Board members.
Clause 54: Termination of appointment of appointed members
This clause outlines circumstances under which the Minister may terminate the
appointment of an appointed Board member.
Clause 55: Other terms and conditions of appointed members
This clause would provide for the Minister to determine any other terms and conditions, not
covered by the Bill, on which appointed members are to hold office.
Division 4 - Meetings of the Board
Clause 56: Convening meetings
This clause would require the Board to hold the meetings that are necessary for the efficient
performance of its functions, and provides for the meetings to be held at the times and
places that the Board determines.
The Chair would be required to convene at least six meetings of the Board in each calendar
year, and would be required to convene a meeting if requested in writing by three or more
other Board members or the Minister.
Clause 57: Secretary may nominate alternate to attend Board meetings
This clause would permit the Secretary to nominate a Senior Executive Service (SES)
employee or acting SES employee in the Department to attend a particular meeting, or all
meetings of the Board at which the Secretary is not present. The person concerned would
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be taken to be a Board member at those meetings.
Clause 58: Presiding at meetings
This clause stipulates that the Chair must preside at all meetings at which he or she is
present, and if the Chair is not present, Board members must appoint one of themselves to
preside.
Clause 59: Quorum
This clause stipulates that a quorum at a meeting of the Board is generally constituted by a
majority of the current Board members.
Subclause 59(2) stipulates that if a Board member has to recuse themselves from a decision
under rules made for the purposes of the Public Governance, Performance and
Accountability Act 2013, and if when the member leaves the meeting for that purpose there
is no longer a quorum present, then the remaining members will be considered to
constitute a quorum for the purpose of any deliberation or decision at that meeting with
respect to that matter.
Clause 60: Voting at meetings
This clause would provide that questions arising at Board meetings are to be determined by
a majority of Board members present and voting. In the event of an equality of votes, the
person presiding at the meeting would have both a deliberative vote and a casting vote.
Clause 61: Conduct of meetings
This clause stipulates that the Board may regulate proceedings at its meetings as it
considers appropriate.
Clause 62: Minutes
This clause stipulates that the Board must keep minutes of its meetings.
Clause 63: Decisions without meetings
This clause outlines circumstances in which the Board may make decisions without meeting.
Division 5 - Committees
Clause 64: Committees
This clause would provide for the Board to establish committees to advise or assist in the
performance of ALPA's functions or the Board's functions. Such committees may be
constituted by Board members and/or other persons.
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The Board would have the power to determine the terms of reference of each committee,
the procedures to be followed by each committee and the terms and conditions of
appointment of committee members.
Clause 65: Remuneration
This clause deals with the remuneration of members of committee established by the Board
underclause 64. It would have effect subject to the Remuneration Tribunal Act 1973.
Sub-clause 64(2) would provide that committee members are to be paid the remuneration
that is determined by the Remuneration Tribunal, provided that there is an applicable
determination in operation. Otherwise, committee members are to be paid the
remuneration that is prescribed bythe regulations.
Sub-clause 64(3) would provide that committee members are to be paid the allowances that
are prescribed by the regulations.
Part 4 - Chief Executive Officer, staff and consultants
Division 1 - Chief Executive Officer of ALPA
Clause 66: Establishment
This clause establishes the office of the CEO of ALPA.
Clause 67: Role
The CEO would be responsible for the day-to-day administration of ALPA, and would have
the power to do all things necessary or convenient to be done for or in connection with the
performance of his or her duties.
The CEO would be required to act in accordance with any policies and written directions
given by the Board in relation to the performance of the CEO's responsibilities.
Sub-clause 67(6) would make clear that a direction given by the Board under sub-clause
67(4) is not a legislative instrument. This provision is included to assist readers. Such a
direction would not be a legislative instrument as it is not considered legislative in character
and therefore not within the meaning of Section 8 of the Legislation Act 2003.
Clause 68: Appointment
This clause outlines the process for the appointment of the CEO.
The CEO would be appointed by the Minister on the recommendation of the Board. The
appointment is to be in writing and the CEO will hold office on a full-time basis.
The period of the CEO's appointment will be as specified in the instrument of appointment.
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While each appointment must not exceed three years, the note to sub-clause 68(3) would
make clear that the Minister is able to reappoint the CEO at the end of each term.
Sub-clause 68(4) would prevent the Minister appointing a Board member (whether an
appointed member or the Secretary) as the CEO.
Clause 69: Acting appointments
This clause would provide that the Minister may appoint an acting CEO during a vacancy in
the office of CEO, or while the CEO is absent or unavailable.
This clause would make clear that the Minister may appoint a Board member (other than
the Secretary) as acting CEO. However, if the Minister appoints a Board member to act as
CEO, it must be on a part-time basis.
The note to this clause refers readers to the rules about acting appointments set out in ss
33AB and 33A of the Acts Interpretation Act 1901.
Clause 70: Outside employment
This clause would provide that the CEO must not engage in paid employment outside the
duties of the CEO's office without the Minister's approval.
Clause 71: Remuneration
This clause sets out the remuneration arrangements for the office of CEO.
Sub-clause 71(1) would provide that the CEO is to be paid such remuneration as is
determined by the Remuneration Tribunal or, if no determination of that remuneration is in
operation, the CEO is to be paid such remuneration as is prescribed in the regulations.
Sub-clause 71(2) would provide that the CEO is to be paid such allowances as are prescribed
in the regulations.
Sub-clause 71(3) would make clear that clause 55 is intended to have effect subject to the
Remuneration Tribunal Act 1973.
Clause 72: Leave
This clause would provide for the leave entitlements of the CEO.
Sub-clause 72(1) would provide that the recreation leave entitlements for the CEO would be
as determined by the Remuneration Tribunal. The Remuneration Tribunal Act 1973 provides
for the Remuneration Tribunal to conduct inquiries into and to determine the recreation
leave entitlements of certain full-time office holders.
Sub-clause 72(2) would provide for the Minister to grant the CEO other forms of leave of
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absence (that is, other than recreation leave) on such terms and conditions as to
remuneration or otherwise as the Minister determines.
Clause 73: Disclosure of interests to the Minister
This clause stipulates that the CEO must give written notice to the Minister under the Public
Governance, Performance and Accountability Act 2013. If the CEO does not make relevant
disclosures to Minister under Clause 52(1), they are taken not to have complied with Section
29 of the Public Governance, Performance and Accountability Act 2013.
Clause 74: Resignation
This clause stipulates that the CEO may resign by giving written notice to the Minister.
The resignation would take effect on the day the notice is received by the Minister, or on a
later day specified in the notice.
Clause 75: Termination of appointment
This clause outlines the circumstances in which, and the process through which, the
appointment of the CEO may be terminated.
Sub-clauses 75(1) and (2) would provide that the Minister may terminate the CEO's
appointment for misbehaviour or physical or mental incapacity only after the Minister has
consulted the Board.
Sub-clause 75(3) sets out other circumstances where the Minister may terminate the CEO's
appointment. Consultation with the Board would not be required in these circumstances.
However, it would be open to the Minister to consult the Board if the Minister wished.
Clause 76: Other terms and conditions
This clause would provide for the Minister to determine other terms and conditions for the
office of CEO in relation to matters not covered by the Bill.
Division 2 - Staff and consultants
Clause 77: Chief Financial Officer
This clause would provide for the employment of a person to perform Chief Financial Officer
functions in ALPA (a CFO). The terms and conditions of employment for the CFO will be as
determined by ALPA.
Clause 78: Other staff
This clause stipulates that other than the CEO and the CFO, ALPA may not directly employ
staff of its own. Instead, other staff necessary to assist ALPA are to be engaged under the
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Public Service Act 1999 as employees of the Department, and made available to ALPA by the
Secretary.
The intention is that the Secretary would delegate relevant employer powers under the
Public Service Act 1999 to the CEO to enable the CEO to effectively manage those
Departmental staff who are performing work for the CEO and ALPA. It is also intended that
the Secretary would direct those staff who are made available to assist ALPA under this
clause to comply with any reasonable directions given by the CEO.
The Secretary would also delegate relevant powers under the Financial Management and
Accountability Act 1997 to the CEO to enable the CEO to effectively manage the department
money and resources required for the performance of ALPA functions by Department staff.
While performing work for ALPA, staff would remain APS employees so would continue to
be fully bound by the APS Values and Code of Conduct set out in the Public Service Act 1999.
The CEO and CFO would also be bound by the Code of Conduct as 'statutory office holders'
in relation to the exercise of their direct or indirect supervisory duties in relation to APS
employees performing work for ALPA (see section 14 of the Public Service Act 1999 and
regulation 2.2 of the Public Service Regulations 1999).
This model follows the precedent established by ARENA in the ARENA Act 2011.
Clause 79: Consultants
This clause would permit ALPA to engage consultants to provide technical and specialist
advisory services. However, ALPA will not be able to engage consultants to perform
operational or administrative duties of a kind that are performed, or are capable of being
performed, by Departmental staff who are made available to ALPA under clause 78.
The intention is that ALPA should not be able to engage consultants to perform work that
could be done by Departmental staff. However, where particular work calls for technical or
specialist skills, ALPA may engaged consultants to perform that work.
The terms and conditions for persons engaged as consultants will be as determined by ALPA.
Part 5 - Miscellaneous
Clause 80: Matters relating to subsidiaries
This clause stipulates that ALPA must not incorporate or otherwise form a subsidiary except
for the purpose of its investment function. It must not form a subsidiary in a place other
than Australia.
Subclause 80(2) stipulates that a subsidiary of ALPA must only make complying investments,
take all reasonable steps to comply with the Investment Mandate, comply with investment
policies formulated by the Board under section 44 and only acquire derivatives for a
purpose for which ALPA may do so under section 29.
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The purpose of this clause is to ensure, to the extent practicable, that subsidiaries of ALPA
are bound by the same requirements and functions as ALPA itself.
Clause 81: Publication of investment reports
This clause outlines the requirements for ALPA to publish investment reports at the end of
each quarter.
Clause 82: Publication of reports etc.
This clause stipulates that responsible Ministers may publish reports given to them, and the
conditions under which those reports may be published.
Clause 83: Extra matters to be included in annual report
This clause outlines matters than must be included in annual reports prepared by the Board
and given to the Minister under section 46 of the Public Governance, Performance and
Accountability Act 2013.
Clause 84: Delegation by ALPA
This clause would provide for delegation by ALPA of its powers or functions under the Bill.
With a view to ensuring that ALPA operates efficiently, ALPA would be able to delegate all or
any of its powers or functions under the Bill to a member of the Board or the CEO.
Such a delegation must be made in writing and under ALPA's corporate seal.
Sub-clause 84(2) would provide that a delegate must comply with any directions of ALPA
when exercising any power or performing any function under a delegation.
Clause 85: Delegation by Board
This clause provides for delegation by the Board of the Board's powers or functions under
the Bill.
Sub-clause 85(1) stipulates that the Board is able to delegate its powers or functions under
the Bill to a member of the Board or the CEO, except the Board's powers or functions under
Subdivision A of Division 2 of Part 3 of the Bill, which relates to development of the general
strategy.
A delegation by the Board must be in writing, and may be revoked by the Board.
Clause 86: Subdelegation by CEO
This clause would provide that the CEO may subdelegate a power or function that has been
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delegated to the CEO by ALPA or the Board under sub-clause 84(1) or 85(1).
The CEO may only subdelegate a power or function to the CFO, or to a substantive or acting
SES employee, or a substantive or acting Executive Level 2 employee (or equivalent) in the
Department (subclause 84(1)).
A subdelegation by the CEO must be in writing.
Sub-clause 86(2) would provide that a subdelegate must comply with any directions of the
CEO when exercising any power or performing any function under a subdelegation.
Sub-clause 86(3) would provide for the rules about delegations set out in sections 34AA,
34AB and34A of the Acts Interpretation Act 1901 to apply to subdelegations made under this
clause.
Clause 87: Disclosure of information to Australian Renewable Energy Agency or Clean
Energy Finance Corporation
This clause stipulates that ALPA may disclose information to ARENA or the CEFC if the
disclosure will enable or assist ARENA or the CEFC to perform or exercise any of its functions
or powers.
Clause 88: Review of operation of Act
This clause stipulates that the Minister must arrange for an independent review of the
operation of the Act to be undertaken as soon as practicable after 1 July 2025.
The independent review must:
include a review of the effectiveness of ALPA in facilitating increased flows of finance
into the community energy sector;
be conducted by an appropriately qualified person or persons; and,
make provision for public consultation.
The review must be provided to the Minister in written form, and be tabled in each House of
the Parliament within 15 sitting days of the day the report is given to the nominated
Minister.
Clause 89: Regulations
This clause outlines a provision for additional regulations to be made in relation to the Bill.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
This Australian Local Power Agency Bill 2021 is compatible with the human rights and
freedoms recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the bill
The bill will establish the Australian Local Power Agency to provide support for community
energy projects and ensure that regional communities share in the benefits of renewable
energy. ALPA will have three primary functions: to provide financial support to, to provide
technical support to, and to invest in community energy projects.
Human rights implications
This Bill engages the following rights:
the right to an adequate standard of living in Article 11(1) of the International
Covenant on Economic Social and Cultural Rights (ICESCR) and Article 27(1) of the
Convention on the Rights of the Child (CRC);
the right to enjoy the highest attainable standard of physical and mental health in
Article 12(2) of the ICESCR and Article 24(1) of the CRC;
the right to self-determination in Article 1(1) of the International Covenant on
Economic, Social and Cultural Rights.
Right to an adequate standard of living
Article 11(1) of the International Covenant on Economic Social and Cultural Rights provides
that everyone is entitled to an adequate standard of living and the continuous improvement
of living conditions. The Australian Government Attorney-General's Department notes that
policy-makers must consider the right an adequate standard of living when working on
legislation, policies and programs that deal with economic and resource issues that could
have an impact on the realisation of the right to an adequate standard of living.
The supply of accessible, reliable, low-cost electricity is critical to the realisation of an
adequate standard of living. Currently, isolated communities in bushfire-prone locations are
particularly vulnerable to electricity insecurity due to a reliance on centralised fossil fuel
electricity generation, as was demonstrated in the Black Summer fires in locations such as
Corryong and Mallacoota.
The Australian Energy Market Operator has persuasively demonstrated that renewable
electricity is the lowest-cost form of electricity in Australia. By promoting greater access to
locally-situated, renewable electricity and storage, this Bill promotes energy security and
energy access, which is essential to the realisation of the right to an adequate standard of
living.
Right to the highest attainable standard of physical and mental health
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Article 12(2) of the International Covenant on Economic Social and Cultural Rights and
Article 24(1)of the Convention on the Rights of the Child provide that everyone is entitled to
the right to enjoy the highest attainable standard of physical and mental health. The
Australian Government Attorney-General's Department notes that the right must be
understood as a right to the enjoyment of a variety of facilities, goods, services and
conditions necessary for the individual to realise his or her highest attainable standard of
health.
The generation of electricity through fossil fuels, and the combustion of fossil fuels for energy
more generally, are empirically-demonstrated harms to human health both directly through
toxic air pollution, and indirectly through the many harms to human health associated with
a disrupted climate. These indirect climate-related harms include but are not limited to:
heat-related morbidity and mortality, increased air pollution from bushfires, increased
geographical spread of zoonotic diseases, and mental health impacts of natural disasters
including drought, bushfires, floods and extreme weather events.
By supporting the greater rollout of renewable electricity, this Bill contributes to the
lessening of both the direct and the indirect harms of fossil fuel combustion. Greater
reliance on renewable electricity directly reduces the emissions of gases known to be
deleterious to human health, and mitigates the extent of dangerous climatic disruption and
its associated harms to health through natural disasters and changed weather patterns. In
promoting locally-owned renewable electricity, this Bill therefore contributes to the
progressive realisation of the highest attainable standard of physical and mental health.
Right to self-determination
Article 1(1) of the International Covenant on Economic, Social and Cultural Rights and article
1(1) of the International Covenant on Civil and Political Rights provide that all peoples have
the right of self-determination and that by virtue of that right they freely determine their
political status and freely pursue their economic, social and cultural development.
It is generally understood that the right to self-determination accrues to 'peoples', not
individuals. The Australian Government Attorney-General's Department notes that the
Australian Government believes that individuals and groups, particularly Aboriginal and
Torres Strait Islander peoples, should be consulted about decisions likely to impact on them.
This includes ensuring that they have the opportunity to participate in the making of such
decisions through the processes of democratic government, and are able to exercise
meaningful control over their affairs.
This Bill promotes self-determination for Australians in general and Indigenous Australians
in particular by promoting and supporting models of energy generation and storage that
privilege local ownership and local decision-making. Currently, communities in Australia are
largely not active participants in the energy system. This Bill aims to promote self-
determination by creating the conditions for communities to develop their own energy
systems, participate in the decisions that affect their supply of energy, and in some
circumstances achieve local energy independence.
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