REVIEW OF ELECTRICITY (CONSUMER SAFETY) ACT 2004 ISSUES PAPER

Transcription

1 REVIEW OF ELECTRICITY (CONSUMER SAFETY) ACT 2004 ISSUES PAPER April 2010

2 HOW TO MAKE A SUBMISSION Written submissions are invited to this Issues Paper. Please send submissions by to: policy@services.nsw.gov.au If you do not have access to , submissions can be mailed to: Electricity (Consumer Safety) Act Review Fair Trading Policy Division Department of Services, Technology and Administration PO Box 972 PARRAMATTA NSW 2124 Submissions must be received by COB Monday 17 May Information from submissions may be made publicly available. If you do not want your personal details or any details of your submission released, please indicate this clearly in your submission. Additional copies of this Regulatory Impact Statement and the proposed Regulation can be downloaded from the Fair Trading website at The full text of the Electricity (Consumer Safety) Act 2004 and the Electricity (Consumer Safety) Regulation 2006 can be downloaded without charge from the NSW Government legislation website: State of New South Wales through NSW Fair Trading, a unit of the Department of Services, Technology and Administration, You may copy, distribute, display, download and otherwise freely deal with this information provided you attribute NSW Fair Trading as the owner. However, you must obtain permission from NSW Fair Trading if you wish to 1) modify, 2) charge others for access, 3) include in advertising or a product for sale, or 4) obtain profit, from the information. Important: For full details, see NSW Fair Trading s copyright policy at or publications@services.nsw.gov.au

3 1. Introduction 1.1 Purpose of the Review It is a requirement, established in Section 59 of the Electricity (Consumer Safety) Act 2004, that a review be undertaken after five years of the operation of the Act to determine whether its policy objectives remain valid and whether the terms of the Act remain appropriate for securing those objectives. This Issues Paper has been developed to meet this legislative requirement. 1.2 Focus of the Review The focus of the review will be explicitly on the obligation under section 59 of the Act that is, to determine that the original policy objectives of the legislation remain valid and that the terms of the legislation are appropriate for meeting these objectives. For this reason, any submissions to the review should address these specific issues and where changes or amendments are proposed these must be demonstrated to be consistent with the intent of the review. Further details of the Act, its policy objectives and purpose are contained in section 3.1 of this Paper. The NSW Government is a committed to reducing red tape. This requires that, where regulatory measures are being considered, there is an assessment of the impact on business and the community of the cost of these measures, and that these costs can be justified in terms of the benefits which will be provided. Well designed and properly targeted regulation helps deliver the community s economic, social and environmental goals. However, regulation can also impose administrative and compliance burdens on business, consumers, government and on the wider community. These burdens must be weighed against the benefits that the regulation generates. Guide to Better Regulation Better Regulation Office, NSW Department of Premier and Cabinet, 2008 The review and consideration of any proposals raised in the review process will be conducted so as to ensure that the NSW Government s commitment to cutting red tape is met. The regulation of electricity distribution and generation networks, including consumer protection arrangements and customer service standards for electricity consumers, and the energy efficiency of electrical appliances are not regulated under this Act and are therefore outside the scope of this review. These aspects of NSW s electrical system are regulated by the Electricity Supply Act 1995 and the Energy and Utilities Administration Act Review process This Issues Paper has been developed to assist the targeted consultation program for the review. The paper has been provided to industry, unions, community groups and other stakeholders. Interested parties are invited to make submissions to the review. The deadline for submissions to the Review is Monday 17 May Issues Paper - Review of the Electricity (Consumer Safety) Act Page 1 of 12

4 LONG-TERM TRENDS FOR ELECTRICAL SAFETY The regulation of electrical safety in NSW has seen a significant reduction in the rate for electrical deaths over the past 50 years. The NSW Government has enforced higher safety standards and actively encouraged improved safety awareness among industry, tradespeople and the general community. NSW ELECTRICAL DEATHS YEAR Trend electrical deaths per million of population NSW SOURCE: NSW Fair Trading Home Building Services prepared from NCIS and other government data sources. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 2 of 12

5 2. Background 2.1 NSW market The electricity industry in NSW is a significant and dynamic industry which forms an important part of the NSW economy. There are over three million electricity customers and approximately three and a half million electrical installations. There are over 280,000 kilometres of poles and wires in the NSW electricity network. The electrical trades contribute significantly to employment in NSW. There are currently 56,791 1 licence holders in the various categories of electrician trade licences. 2.2 NSW regulatory framework The Electricity (Consumer Safety) Act 2004 The Electricity (Consumer Safety) Act requires, encourages and promotes the supply of safe electrical articles (consumer appliances and electrical equipment) and safe practices for electrical wiring work in residential, commercial, industrial and agricultural environments. The Act: provides the statutory basis for determining the electrical equipment to which the legislation applies sets the criteria that must be met before electrical articles may be sold prohibits the sale of electrical articles which do not meet specified criteria sets minimum standards for work on electrical installations which convey electricity at above extra low voltage sets out the responsibilities of owners and occupiers of places in relation to electrical installations provides inspection, investigation and reporting powers in relation to the Act. The full text of the Act and Electricity (Consumer Safety) Regulation 2006 can be downloaded from the NSW Government website at: Electricity Supply Act 1995 The Electricity Supply Act 1995 is the principal statute governing electricity networks in NSW. It establishes the legislative framework under which electricity is distributed to customers. The Electricity Supply Act seeks to safeguard consumers and the network by providing a regulatory framework for the safe and efficient provision of network related services to consumers. In particular, it establishes a process of accreditation by which only competent persons may connect or disconnect a customer s installation from the network. 1 As at 1 February this includes 28,882 electrical contractors and 27,909 qualified supervisors and other trades certificate licence classes. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 3 of 12

6 The sectors of the electricity industry in NSW which are regulated by the Electricity Supply Act are: electricity generators companies which own or control generating systems. These companies operate in a competitive national market (the National Electricity Market) retail electricity suppliers companies which purchase electricity from generators and sell it to customers transmission operators companies which own or control transmission systems distribution network service providers (DNSPs) companies which own or control distribution systems. A distribution network is the electricity power lines and associated equipment and structures that are used to convey electricity from the transmission network to a customer. DNSPs are monopoly operators with a franchise licence issued by the NSW Government to serve a defined area of NSW. There are currently three DNSPs in NSW: Country Energy, EnergyAustralia and Integral Energy. Matters regulated by the Electricity Supply Act are not within the scope of this review. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 4 of 12

7 3. The Electricity (Consumer Safety) Act 3.1 Purpose of the Electricity (Consumer Safety) Act The essential policy objective of the Act is to provide for the safe use of electricity by consumers in NSW that is, to ensure that electricity is used in a manner which is safe and poses no unnecessary risk to life and property. Electricity is essential to our society, but poorly manufactured electrical articles and sub-standard wiring work present hazards to life and property. Electricity can kill and injure individuals and cause the destruction of property. The Act s policy objective is achieved by the following: providing a mechanism for prescribing and enforcing appropriate minimum safety standards for electrical articles (electrical appliances and equipment) and electrical wiring. For certain high risk items, the enforcing of minimum safety standards is further enhanced by a requirement for these items to be tested, approved and marked before they may be made available to the public. These goods are high risk because consumers and people with no specialist electrical training have high levels of exposure to them. This includes items such as household appliances, mobile phone chargers, electric lawn mowers, extension cords and safety switches, which we take for granted are safe to use providing powers to inspectors to check electrical articles supplied by retailers and wholesalers to ensure compliance with the mandated safety standard requirements creating a power for the Director-General to compel the supplier (retailer or wholesaler) of an electrical article to provide evidence that the item is safe creating a power for the Director-General to prohibit the sale of certain unsafe electrical articles mandating the reporting of accidents involving electrical items and installations and providing appropriate investigation powers for government inspectors. These powers ensure that potential dangers are identified specifying that installation owners have an obligation to maintain their installations in a safe condition. This includes installations connected to a network as well as so-called stand-alone installations which are not connected to a network. 3.2 Brief description of the Electricity (Consumer Safety) Act Regulation of electrical article safety Part Two of the Act is concerned with the regulation of consumer electrical articles electrical appliances and equipment. An electrical article is defined in the Act as any appliance, wire, fitting, cable, conduit, meter, insulator, apparatus, material or other electrical equipment intended or designed for use in, or for the purposes of, or for connection to, any electrical installation. The provisions of Part Two seek to ensure that electrical articles are safe for purchase and hire and that the inherent information asymmetry is balanced in favour of consumer safety. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 5 of 12

8 The Act creates additional requirements for those articles which have been assessed as presenting a higher risk to consumers. These are classified in the legislation as declared articles. While there is a general requirement for all electrical articles supplied in NSW to be safe, declared articles must be tested and certified as safe (approved) by an accredited third party certification body. The term for these bodies in the Act is recognised external approval schemes Regulation of electrical installation safety Part Three of the Act sets out the obligations for all parties in relation to the standard of electrical work and the maintenance of electrical installations. This includes obligations on the owners of electrical installations. People who own and use electrical installations have a responsibility to themselves, their families, neighbours and the wider community to ensure, to the best of their knowledge and ability, that the installation is safe. Part Three of the Act establishes this obligation. An electrical installation is defined in the legislation as any fixed appliances, wires, fittings, apparatus or other electrical equipment used for (or for purposes incidental to) the conveyance, control and use of electricity [supplied from a network] in a particular place. Excluded from the installations regulated under the legislation is any electrical equipment used for the generation, transmission or distribution of electricity that is owned by an electricity network or situated in a location owned or occupied by a network. Also excluded is electrical equipment in or about a mine. Such equipment is separately regulated under industry-specific legislation. The legislation also allows for other electrical equipment to be excluded from the legislation by the regulations, where appropriate Other Matters The Act also provides for: definitions used in the legislation (section 3) reporting of electrical accidents (Part 4) enforcement by government (Part 5) other miscellaneous provisions (Part 6). The full text of the Electricity (Consumer Safety) Act 2004 and the Electricity (Consumer Safety) Regulation 2006 can be downloaded without charge from the NSW Government legislation website: Issues Paper - Review of the Electricity (Consumer Safety) Act Page 6 of 12

9 4. Targeted analysis current legislative requirements Comment is invited on all aspects of the current legislation, however a number of matters have already been raised with NSW Fair Trading by industry or consumers as issues which should be specifically reviewed. This section discusses each of these, providing background information and specific questions to which stakeholders may wish to respond. 4.1 Issues relating to the regulation of electrical articles Definition of electrical article Electrical article means any appliance, wire, fitting, cable, conduit, meter, insulator, apparatus, material or other electrical equipment intended or designed for use in, or for the purposes of, or for connection to, any electrical installation. The wording of the definition for electrical article must be carefully balanced. It is important to ensure that the definition contained in the legislation is flexible enough to include all items which the legislation is intended to address while still being precise enough to exclude those which it has been determined should not be covered. For example, the current definition excludes electrical articles not intended for connection to an electrical installation such as battery operated appliances. Technological innovation means that the design and use of electrical articles supplied to the marketplace continues to change. This may mean that the definition of electrical article used in the legislation needs updating. Q: How could the current definition of electrical article be improved to address any technological or other changes to items supplied in the Australian marketplace? Q: What articles currently not regulated by the legislation should be included? Q: Should the different regulation of declared and non-declared articles be retained? Sale of second-hand electrical appliances Currently, the wording of the legislation does not distinguish between the supply of second-hand electrical articles and those which are new that is, being supplied to the market for the first time. This means that used or second-hand electrical articles supplied in NSW must meet all the minimum safety standards mandated by the legislation, and in the case of declared articles, have a current approval. The definition of electrical articles includes both electrical appliances and electrical equipment. Electrical equipment includes wires, fittings, cables, meters and other apparatus, such as light switches used in electrical installations. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 7 of 12

10 While there is little trading in second-hand electrical equipment there is a significant trade in second-hand or used electrical appliances. It is in respect of second-hand appliances in particular that questions have been raised about how the legislative requirements should operate. There are arguments for both including and exempting the supply of second-hand electrical appliances from the requirements of the legislation. Both new and used articles are capable of posing a danger to the consumer and therefore there is a strong case for the supply of both new and used appliances to be regulated under the legislation. Indeed, as electrical appliances age, they generally deteriorate and older, second-hand appliances may pose a greater safety risk than new appliances. On the other hand, most consumers are well aware of the risks posed by second-hand appliances, whether sold privately or by traders. Already aware that the item may not be of a same quality as a new appliance, most consumers can make their own decision whether to purchase or not purchase the item, and as to what is an appropriate price. NSW Fair Trading has previously considered providing a general exemption under the legislation for sales of second-hand electrical appliances by private individuals that is, non-business sales. For businesses which trade in second-hand electrical appliances and equipment, it has been previously proposed that an exemption be provided to allow for the sale of second-hand appliances if each item has been tested and tagged compliant with Australian Standard AS Q: What would be appropriate conditions for commercial sales of second-hand electrical appliances under the legislation? Q: What safety concerns would there be in exempting private sales of second-hand electrical appliances under the legislation? Q: Should the legislation provide regulatory arrangements for the sale of second-hand appliances different than those provide for the sale of new electrical articles? External government and non-government certifiers Fundamental to the enforcing of safety standards for electrical articles is the requirement for certain specified articles (declared articles) to be certified as safe before being supplied to the market. To support this, the legislation includes requirements for non-government bodies seeking to undertake the certification of articles to demonstrate their capacity to do this work. Bodies which operate these recognised external approval schemes are required to demonstrate that they meet a range of specific criteria, including obtaining accreditation from the Joint Accreditation System of Australia and New Zealand (JAS-ANZ). On the other hand, external government certification bodies (government entities in other States who offer certification services) are not required to demonstrate a capacity to undertake this activity. Additionally, while the certification activities of non-government certification bodies are subject to overview and conditions by NSW Fair Trading, this is not currently the case for government certification bodies. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 8 of 12

11 The legislation does not explicitly state that non-government certifiers have the power to extend, renew, suspend or cancel an approval. There is a question as to whether the Act should be amended to clarify that this is the case. Q: What would be an appropriate arrangement for the regulation of government and non-government certification bodies? Q: Should the Act state that non-government certification bodies can also extend, renew, suspend or cancel an approval? 4.2 Issues relating to the regulation of electrical installations Definition of electrical installation Electrical installation means any fixed appliances, wires, fittings, apparatus or other electrical equipment used for (or for purposes incidental to) the conveyance, control and use of electricity in a particular place, but does not include: (a) any electrical equipment used, or intended for use, in the generation, transmission or distribution of electricity that is owned or used by an electricity supply authority, or located in a place that is owned or occupied by such an authority, (b) any electrical article connected to, and extending or situated beyond, any electrical outlet socket, (c) any electrical equipment in or about a mine, (d) any electrical equipment operating at not more than 50 volts alternating current or 120 volts ripple-free direct current, (e) any other electrical equipment, or class of electrical equipment, prescribed by the regulations. It is important to ensure that the definition for electrical installation contained in the legislation, including any exclusions, is flexible enough to ensure that all matters intended to be addressed by the legislation are included while still being precise enough to exclude those which are not. Technological innovation in this area also means that the definition should be reviewed regularly to determine that it is still adequate. Q: What changes are required to the current definition of electrical installation used in the legislation? Q: What technological or other changes mean that the current definition needs to be amended? Definition of electrical installation work Electrical wiring work means the actual physical work of installing, repairing, altering, removing or adding to an electrical installation or the supervising of that work. Issues Paper - Review of the Electricity (Consumer Safety) Act Page 9 of 12

12 The current definition of electrical installation work is important for determining when various mandatory measures in the legislation come into effect. The definition is deliberately inclusive, with few exceptions. It is a requirement in NSW that all electrical wiring work is undertaken by suitably qualified electrical tradespeople. Q: Are there any concerns regarding the current definition of electrical installation work used in the legislation? Q: What types of electrical wiring work, if any, should be exempted from the legislation and why? Requirements for compliance certificates The Minister has recognised the Certificate of Compliance Electrical Work (CCEW), published by the National Electrical and Communications Association (NECA) NSW, as the mandatory compliance certificate for the legislation. It is the document to be used to meet the obligations contained in the legislation for certifying the safety of electrical installation work. The CCEW is a pre-printed form which is produced in books of 50 forms with four carbon copies. Each form must be completed by hand. Various industry participants have raised practical problems with the CCEW, including: difficulty in reading carbon copies not being sure what to do with damaged or spoilt forms duplication of effort as information from business records has to be reproduced in the form by hand. A number of electrical contractors have obtained permission to use an electronically generated form of the CCEW. Additionally, it has been suggested to NSW Fair Trading that some electrical contractors are uncertain of when a CCEW should be issued and that the legislation should provide more detail on when the CCEW should be issued. Industry members have reported to NSW Fair Trading a degree of uncertainty regarding when compliance certificates should be lodged with an electricity network and who can lodge the certificate. Comment is sought in respect of any uncertainty within the legislation regarding this issue. Q: What changes should be made to the design of the mandated form of the compliance certificate? Q: What advantages would there be for electrical contractors, electricity networks, consumers and government in moving to an online or electronic compliance certificate? Q: What changes should be made to the legislation to address any uncertainty for electrical contractors on when the compliance certificate should be issued? Q: What changes should be made to the legislation to address any uncertainty as to who should lodge a compliance certificate? Issues Paper - Review of the Electricity (Consumer Safety) Act Page 10 of 12

13 4.2.4 Requirements for moveable and mobile dwellings Currently, the legislation does not separately regulate electrical installations and articles within transportable structures (moveable and mobile dwellings, such as caravans). Australian Standard AS/NZS 3001:2008 provides for specific requirements for transportable structures and vehicles separate from the general requirements for electrical installations contained in general Wiring Rules (Australian Standard AS/NZS 3000). It has been suggested to NSW Fair Trading that electrical installations within moveable and mobile dwellings should be treated as a special class within the legislation. Q: What specific requirements should be included in the legislation in respect of moveable and mobile dwellings? 4.3 General Safety Issues Reporting of serious electrical accidents The legislation includes a legal requirement for various parties to report to the government on serious electrical incidents. Penalties are provided where this is not done. A serious electrical accident is defined as one in which an electrical article or electrical installation is involved and where a person: dies or suffers permanent disability is hospitalised receives treatment from a health care professional is unable to attend work for any period of time. It has been suggested to NSW Fair Trading that that this obligation is not generally well understood. Comment is sought on the need to amend the system used by installation owners to notify government of these incidents. Q: What are the issues for members of the public, electrical tradespeople and others with the current arrangements for notifying of serious electrical accidents? Q: What problems arise from the inclusive nature of the current definition of serious electrical accident? Q: What is the appropriate penalty for failing to notify of a serious electrical accident? Administrative arrangements for the legislation NSW Fair Trading, part of the Department of Services, Technology and Administration, is currently responsible for administration of the legislation. As part of the review, comments are welcome on how the agency could better undertake this Issues Paper - Review of the Electricity (Consumer Safety) Act Page 11 of 12

14 task, for example, in relation to the provision of information about the Act and its requirements and exemptions. One administrative issue is the requirement for the issuing of evidentiary certificates that an article is not approved. Currently, the Director-General has sole responsibility for this task. However, articles are also approved under the Act by recognised external approval schemes and government regulators in other jurisdictions. There is a question about whether or not those bodies also be authorised to issue evidentiary certificates under the Act. Q: Should the arrangements for issuing of evidentiary certificates be amended? Q: Do you have any other suggestions for improvements to NSW Fair Trading s role in administering the legislation? Penalties and enforcement and investigative powers Fundamental to the enforcing of safety standards for electrical articles is the penalty provisions for supplying either an unmarked or an unapproved article. Currently, the penalty for either breach is the same. It might be more consistent with the relative seriousness of the two breaches to increase the penalty for supplying an unapproved article as this potentially poses a higher risk to consumers and the general public. Other legislation administered by NSW Fair Trading provides authorised officers with express powers to take photographs of suspect premises and articles. Also, in the course of an investigation, officers can seize and copy documents, if they are returned within a reasonable period. It can be argued that such powers already exist, however it would greatly clarify the powers of investigating officers if this was included as an express power under the legislation. Most of business regulation legislation administered by NSW Fair Trading, such as the Fair Trading Act 1987 and the Home Building Act 1989, allow a prosecution to commence up to three years after the offence was committed. There appears to be no reason why this Act should not provide for a similar timeframe for commencing proceedings. Q: Should the penalty for supplying an unapproved appliance be increased? Q: Should the investigation powers of authorised officers be enhanced? Q: Should the period for commencing proceedings be extended to three years after the date of the offence, consistent with other legislation administered by NSW Fair Trading? Other Issues The matters identified in Part 4 of this Paper are those which have already been raised by stakeholders. These are not intended to be exhaustive and comments on other issues related to the Act and its effectiveness in achieving its policy objectives, and the validity of those objectives are welcomed. Q: How could the content and application of the Electricity (Consumer Safety) Act 2004 be made more effective in achieving its policy objectives? Issues Paper - Review of the Electricity (Consumer Safety) Act Page 12 of 12