Upcoming Mallesons seminarsLarge energy using businesses corporations in the mining, resource processing, manufacturing, transport and commercial sectors.
What do you need to do?Corporate groups that used more than 0.5 petajoules (PJ) of energy in 2005 2006 will have to register under the Act by 31 March 2007.
Stephen Davis
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David O'Donnell
Debra Townsend
Melbourne
Stephen Davis
Perth
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Brisbane
David Bell
Canberra
Chris Wheeler
Following the introduction of the Energy Efficiency Opportunities Act 2006 (Cth), corporate groups that used more than 0.5 petajoules (PJ) of energy in 2005-2006 have to register under the Act by 31 March 2007.
What does it mean for you?
This Act sets up a program to encourage large energy using businesses to be more energy efficient.
The program is likely to apply to corporations in the mining, resource processing, manufacturing, transport and commercial sectors. Any electricity or gas generation, transmission or distribution components of a business are generally exempt from the program for three years.
Following registration, participants in the program are required to assess their energy use and report publicly on the results of their assessment. Registration and assessment is compulsory once the threshold of 0.5 PJ of energy per year is exceeded. Assessment involves identifying energy saving opportunities and implementing them in accordance with the plan submitted to the Department of Industry, Tourism and Resources.
What is the issue?
The program requires a “whole of business” approach to assessing energy use and energy savings opportunities. Businesses that use more than 0.5 PJ of energy in a year must register under the Act. This threshold is likely to be reached by a business with an annual energy bill of more than:
- $1.5 million for gas
- $5-10 million for electricity
- $11 million for diesel fuel, or
- $13 million for unleaded petrol (depending on prices).
0.5 PJ approximately equals 139,000 MWh, 13 ML diesel, 9000 tonnes of LNG or 10,000 tonnes of LPG.
What is a “corporate grouping”?
The “corporate grouping” rules are key to assessing whether a business has to participate. First, the controlling corporation must be identified. Second, a decision needs to be made about which subsidiaries, joint ventures or partnerships have to be included. Third, it will then be possible to calculate whether the combined energy of the corporate group exceeded 0.5 PJ in the trigger year (2005-2006 is the first possible trigger year). If so, the corporation has to register and participate in the program.
A controlling corporation is a constitutional corporation that does not have a holding company incorporated in Australia. Controlling corporations may be a single corporation, have subsidiaries and/or have a foreign holding company.
After registration, the next deadline is 31 December 2007. By that date, businesses required to register will need to have their assessment and reporting schedule prepared and submitted for approval by the Department, covering a five year assessment cycle.