Verrall AyeshaGAS (INFORMATION DISCLOSURE AND PENALTIES) AMENDMENT BILLSecond ReadingHon Dr AYESHA VERRALL (Minister for Food Safety) on behalf of the Minister of Energy and Resources: I present a legislative statement on the Gas (Information Disclosure and Penalties) Amendment Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon Dr AYESHA VERRALL: I move That the Gas (Information Disclosure and Penalties) Amendment Bill be now read a second time. Ensuring we get our regulatory settings right for our energy markets is a key focus for the Minister's energy work programme as Minister of Energy and Resources. As a country we are currently experiencing drier than average hydrological conditions which of course affects our ability to generate hydro power. These conditions highlight the importance of ensuring our markets are well informed about the potential security of supply risks and matters that may affect the wider energy market. This is why we have been focused on increasing information disclosure about thermal fuels in both the electricity and gas markets in recent years. New Zealand has experienced prolonged outages and now a production decline at Pohokura gasfield which provides approximately 40 percent of the national natural gas supply. And if you want to know how serious it is when you run out of gas you need to look no further than the contribution from Simon Court recently that ran out of gas halfway through his presentation. It was a shame because we were hopeful that there would have been a roaring supply of gas that would have powered him through a full 10 minutes.A wide range of parties have highlighted their concerns with the current level of information being disclosed by the gas market participants particularly if the information could help minimise significant downstream impacts including impacts for the electricity market for which gas currently plays a small but important role. Current dry year conditions also further highlight the importance of the Government's work on addressing a dry year problem through the New Zealand Battery Project. This project will help address our reliance on fossil fuels to cover our dry year risk. I want to thank the Economic Development Science and Innovation Committee for their work in consideration of this bill. I also want to thank those who took the time to submit and provide their feedback. This bill amends the Gas Act 1992 which is the principal piece of legislation for the governance of the New Zealand gas industry. This bill is important for ensuring the appropriate regulatory requirements can be put in place for supporting security of supply and to improve outcomes for energy consumers. The bill expands the scope of regulatory-making powers to enable gas governance arrangements to be made that provide for the disclosure of information about matters that may have a significant downstream impact or may contribute to the risk of critical gas shortages. The bill's changes are consistent with the co-regulatory approach of the sector where the Government must first receive a recommendation from the industry co-regulator the gas industry company before regulations can be made. The bill's transitional provisions ensure that the work of the gas industry company is currently undertaking around information disclosure will be considered as part of the process for forming a recommendation for a new gas governance arrangement should they be needed. The bill also makes changes to the Gas Act's penalty regime. The bill amends that penalty regime for industry participants by increasing the maximum civil pecuniary penalty available to be imposed by the Gas Rulings Panel for breaches of gas governance regulations from $20000 to $200000. This addresses concerns about the low level of pecuniary penalty able to be currently issued by the Gas Rulings Panel particularly for situations where a wide range of consumers may be affected by a potential breach. This new penalty limit will apply across all gas governance regulations. The bill also creates a new penalty for consumers who are not industry participants who will now be subject to a civil pecuniary penalty instead of a criminal penalty if they breach gas governance arrangements. This will ensure equitable treatment between industry participant consumers and non - industry participant consumers. It will be used to deter breaches of regulations by these consumers which include some of the larger consumers of natural gas. This penalty will also have a maximum of $200000 and will not apply to residential consumers. The bill also makes a number of supporting changes to enforcement provisions in the Act and clarifies current practices around these. During the course of consideration by the Economic Development Science and Innovation Committee an important change to the bill was made to address issues raised by a submitter. The recommended change will ensure that a failure of an industry participant to follow a Gas Rulings Panel order will continue to carry a criminal penalty. This will help to ensure that the appropriate incentives are in place for the industry to comply with orders from the Gas Rulings Panel. The bill represents a step forward in improving how information that may highlight risks of critical gas shortages or the potential for significant price impacts is released to the market which should improve the management of situations where critical gas shortages may occur. I commend this bill to the House.ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.