30 October 2018

On 1 October 2018, the Electricity (Amendment) Bill and the Gas (Amendment) Bill (collectively, “Bills”) were passed.

In his Second Reading Speech, Dr Tan Wu Meng, Second Parliamentary Secretary for Trade and Industry and Foreign Affairs, stated that the amendments proposed in the Bills were in response to how Singapore’s energy markets have evolved since the Electricity Act and the Gas Act were first enacted. He noted that the electricity sector has evolved with the increased proliferation of new technologies and business models whilst Singapore’s reliance on imported natural gas has grown.

The Bills seek to amend the Electricity Act and the Gas Act respectively in order to enable more effective regulation of the gas and electricity markets, enhance the security and reliability of gas and electricity supply, protect critical infrastructure and enhance competition in Singapore’s energy market.

In addition, the Bills enable the Energy Market Authority (“EMA”) to issue anti-competition guidelines in relation to the electricity sector and the gas sector.

Some key amendments proposed in the Bills are set out below.

Amendments to Electricity Act

The amendments to the Electricity Act are aimed at enhancing security and reliability of electricity supply, and protecting consumers’ interests. Key proposals include:

  • Mandating connections between the electricity transmission licensee’s and an electricity licensee’s equipment for electricity transmission purposes: This amendment is included to allow the EMA to direct the electricity transmission licensee and an electricity licensee to effect a connection between their respective electrical equipment, if necessary for network expansion in the public interest or to ensure the security and reliability of electricity supply to the public.
  • Enabling electricity licensees to apply for judicial management with the consent of the EMA: This amendment will allow licensees to apply for a judicial management order under Part VIIIA of the Companies Act once EMA’s consent is obtained.
  • Clarifying liability of parties responsible for damaging land-based electricity transmission infrastructure: This amendment rationalises the different offences currently provided in the relevant section of the Electricity Act. It further prescribes a maximum fine of S$1 million and/or imprisonment of up to five years for all offences under the relevant section, regardless of the type of electricity infrastructure involved and whether or not the damage is earthworks related. This is in line with the penalty in the corresponding Gas Act and will allow the courts broader scope to determine appropriate penalties for such offences by considering such matters as the seriousness of the damage and its effect, and the circumstances in which the offence was committed.
  • Expanding enforcement against electrical works carried out without valid electrical licence by firms: This amendment seeks to better protect the interests of consumers when they engage firms to carry out electrical works.

Amendments to Gas Act

The amendments to the Gas Act are intended to safeguard gas supply security and safety, as well as enhance the regulation-making powers of EMA for the conversion of the town gas pipeline network to convey natural gas. Key changes include:

  • Expanding EMA’s powers to deal with severe gas shortage situations: This amendment provides that in the event of an imminent or actual severe gas shortage, EMA, with the approval of the Minister for Trade and Industry, is empowered to issue directions to require any person to take measures specified by EMA to address or alleviate the severe gas shortage, or prevent it from occurring or continuing. These directions may include empowering EMA to reallocate gas from users who can use alternative fuels to those with no alternative fuel options. The term “severe gas shortage situation” is defined as when there is a shortage of natural gas imported into Singapore that results in gas importers being unable to fulfil the contractual obligations to end-users and where the extent, and likely duration or uncertainty of the duration, of the gas shortage is likely to threaten the security or stability of gas or electric supply in Singapore or result in a severe loss of industrial or economic output.
  • Enhancing safety regulation of gas-related activities: Presently, EMA’s regulatory functions under the Gas Act include “protecting the public from dangers arising from the production, processing, storage, conveyance, shipping, supply or use of gas”. The Gas (Amendment) Bill proposes to expand these regulatory functions to include protecting the public from dangers to health arising from such gas-related activities, including the import of gas, to strengthen regulation over a broader spectrum of activities and expanding EMA regulatory control.
  • Expanding the scope of “designated gas licensees” and special administration orders: This amendment will allow flexibility in the future designation of new gas licensees as the gas industry evolves. The Gas (Amendment) Bill also expands the scope of special administration orders, better enabling the EMA to deal with emergencies.
  • Clarifying liability of parties responsible for damaging land-based gas transmission infrastructure: This amendment rationalises the different offences provided in the relevant section of the Gas Act, including offences relating to damage to land-based gas transmission infrastructure. The penalty for offences under this section remains unchanged.

Reference materials

The following materials are available on the Singapore Parliament website www.parliament.gov.sg and MTI website www.mti.gov.sg:

 

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