Victoria ‘makes good’ on its promise to ban embedded network, or does it?
Yesterday it was announced that the Victorian state government had ‘made good’ on its election promise to ban embedded networks. State minister for energy Lily D’Ambrosio said that from January 2023 embedded networks would be banned unless they ‘ran’ on 100% renewable energy.
2022-2023 Compliance and Enforcement Priorities of the ESC (Victoria)
On 11 July, the Essential Services Commission (ESC) published its energy compliance and enforcement priorities for 2022-23.
Impacts
It is our corporate mission to provide regulatory services that result in a more sustainable and just society. We are selective in who we work
Having regard to a customer’s capacity to pay: a Federal Court Decision
The decision of Australian Energy Regulator v Origin Energy Electricity Ltd (2020) FCA 802 should be reviewed by all energy retailers operating in NECF jurisdictions.
As the regulatory demands of energy sellers increase over time, there is an understandable move towards automation. When set up correctly, automation can be used to reduce regulatory burden and to improve customer’s experiences.
This decision serves as a timely reminder of the critical importance of compliance when it comes to automating such processes. A failure to properly build in compliance into automation can result in a large number of breaches occurring over a significant period of time and ultimately, significant civil penalties being paid.
Image created using OpenAI’s DALLE-2
The new Retail Exempt Selling Guideline
The new Retail Exempt Seller Guideline should be reviewed in detailed by all exempt sellers operating in NECF jurisdiction which includes NSW, QLD, ACT, TAS and SA. The Guideline was developed as part of the AER’s review into the Retail and Network Exemption Guidelines. The AER has decided to defer release of the draft Network Service Exemption Guideline (Version 7) while further changes are made to streamline and simplify the document. It is anticipated that the revised Network Service Provider Exemption Guideline will be published in August 2022. The new Retail Exempt Seller Guideline takes effect from 15 July 2022.
2022-2023 Compliance and Enforcement Priorities of the AER
The Australian Energy Regulator has published its 2022-2023 Compliance and Enforcement Priorities. The AER will continue to focus its compliance and enforcement activities on how retailers assist customers who are facing financial difficulties and those who are within embedded networks.
Who claims and who pays: the administered price cap (APC) compensation process
The APC compensation scheme allows certain entities to claim compensation via AEMO and the AEMC where their total costs exceed their total revenue from the spot market over an eligible period. Entities that may be entitled to claim include scheduled and non-scheduled generators, scheduled network service providers, market participants in respect of a scheduled load, demand response service providers and ancillary service providers.
NSW Energy Minister granted emergency powers to direct coal to fuel electricity generators
The NSW Energy Minister, Matt Kean, has been granted emergency powers under the Essential Services Act 1988 to direct coal companies to provide coal to generators. These powers were granted in response to the current energy market crisis.
We haven’t been publishing much about the current energy market crisis as we, like many in the industry, have been in the thick of it. However, from today, we will publish analysis of the regulatory responses of AEMO and state Governments. So, what do the powers allow the Minister to do and do they have any teeth?
Unaccounted for Energy (UFE) Rule Change: Global Settlement
The Australian Energy Market Commission (AEMC) has implemented a new rule which commenced (after delay) on 1 May 2022. The new rule relates to a change in the current market settlement framework. The rule changes the framework from the previous framework of ‘settlement by difference’ to a ‘global settlement’ framework.
Increase to cap on discounts for paying energy bills on time (Victoria)
The Essential Services Commission has increased the amount energy retailers can charge Victorian customers who do not make their payment on time to 5.71 per cent. The cap applies to ‘pay-on-time’ discounts that are conditional upon the customer paying a bill on or before the pay-by date.
EnergyAustralia ordered to pay a pecuniary penalty of 12 million dollars in respect of contraventions relating to customers who reside at premises where life support equipment is required.
On 3 June 2022, the Honourable Justice Colvin of the Federal Court of Australia published reasons for judgment in proceedings commenced by the Australian Energy Regulator against EnergyAustralia alleging numerous contraventions of provisions in the National Energy Retail Rules concerned with procedures to protect customers who depend upon electricity supply for the operation of life support equipment. All energy retailers and exempt sellers should carefully review the reasons given by Justice Colvin and ensure that they will not repeat the mistakes made by EnergyAustralia.
Unprecedented wholesale prices: what should we do about it?
Wholesale energy prices have risen, quickly and relentlessly. Wholesale prices are those paid by energy retailers for energy consumed by individuals and businesses. Traditionally, they represent around 30% of an energy bill. Not any more.
The largest penalty ever imposed under Australia’s National Energy Retail Law.
On 1 June 2022, the Federal Court ordered EnergyAustralia to pay a pecuniary penalty of $12m. They were also ordered to pay $300,000 towards the AER’s legal costs. The penalty is the largest ever imposed under Australia’s National Energy Retail Law.
Updating the Distributed Energy Resource (DER) Register
The Australian Energy Market Operator (AEMO) is required by law to keep a register of distributed energy resources (DER). The Register is designed to assist AEMO in relation to grid security and stability. DER installers and electricity network service providers (NSPs) are responsible for providing the relevant information to AEMO via the register.
The WA Electricity Retail Market
The WA electricity industry operates differently to the NEM number of respects. Customers that operate within the South West Interconnected System (SWIS) – the biggest electricity network in Western Australia – are split into two categories: Non-contestable and Contestable customers.
Review of the Authorisation and Exemption Framework
The Australian Energy Regulator has published a consultation issue paper titled Retail Authorisation and Exemption Review. Broadly, the Issues Paper considers the changing nature of the energy market, the risks posed by new products and services, and asks whether changes are needed to the Retail Authorisation and Exemption Framework. This is a major consultation that will have long-lasting ramifications for the energy market and consumers. It builds on the work of the Energy Security Board, the Australian Energy Market Commission (particularly in relation to embedded network regulation) and prior work by the AER.
When can an energy retailer change prices for Victorian small energy customers?
Clause 94 of the Energy Retail Code of Practice aims to provide small customers with certainty that tariffs payable under a market retail contract can only be increased by a retailer on a network tariff change date or otherwise as permitted by Clause 94.
Managing the compliance of contractors
In many industries, a principal will be liable for any non-compliance by their contractors. What are some of the steps you can take to manage contractors?
When should you hire a compliance manager?
If you’re wondering if it’s time to hire a compliance manager, ask yourself how often you think about regulatory compliance and whether your business is across all regulatory obligations with appropriate controls in place. If the answer to the last question is not enough or no, it may be time to take on such an employee.
The AER’s Better Bills Guideline
On 31 March 2022, the Australian energy Regulator published the Better Bills Guideline. The Guideline creates binding and enforceable obligations on energy retailers in respect of their preparation and issuance of energy bills for small customers. This article summarises some of the key obligations of the Guidelines. For detailed instructions on how to implement and comply with the Guidelines, please get in touch.
Australian Energy Regulator Releases the Results of its Latest Compliance Audits Under the National Energy Retail Law
The Australian Energy Regulator has published results of its audits into Alinta Energy, Simply Energy, ReAmped Energy and Powershop with a focus on compliance with hardship and disconnection obligations. The audit results provide important information to all energy retailers as to what is expected when it comes to compliance in these key areas.
The enforcement and penalty regime for energy sellers in Victoria
Changes have recently been made to the enforcement and penalty regime for non-compliance with energy laws in Victoria. In this article we explain some of those key changes and their implications for energy sellers.
Victorian Energy Retail Code of Practice (formerly the Energy Retail Code)
On 1 March 2022, the Victorian Energy Retail Code of Practice took effect.
The rules previously existed in a different iteration (Energy Retail Code), however in December 2021, Victorian legislative changes deemed existing energy codes as ‘codes of practice’. To fully implement the new enforcement framework and effect the conversion, the Essential Services Commission (ESC) undertook a 6 month review and consultation process, which culminated in the final version of the Energy Retail Code of Practice being published.
The 2022-23 Victorian Default Offer review
Recently we wrote an article about the draft AER 2022-23 Default Market Offer. A parallel process is taking place in Victoria, and on 15 March 2022 the Essential Services Commission (ESC) released their draft decision about the Victorian Default Offer (VDO).
Submissions are open until 12 April 2022 with the release of the final decision in May, and decision to take effect from 1 July 2022. The ESC will hold a public (online) forum for those interested on 31 March 2022.
Draft Retail Exempt Selling Guideline (Version 6) March 2022
What’s Changed? On 9 March 2022 the AER published its draft Retail Exempt Selling Guideline (Version 6). The AER have invited stakeholder’s submissions which closes
ESC: Compliance and Performance Reporting Guidelines Version 7
Transitional Period Guide and Summary of Amended Provisions On 16 February 2022, the Essential Services Commission of Victoria (ESC) amended its Compliance and Performance Reporting
Embedded Network Operators can now join EWOQ
On 28 February 2022, the Energy and Water Ombudsman (Prescribed Energy Entities) Amendment Regulation 2021 (EWO-AR) came into effect. The amendments insert two new sections into the Energy and Water Act 2006 (Queensland) (the ‘Act’).
A New Exempt Seller Guideline (for NECF)
The proposed changes to the Retail Guidelines will result in greater certainty for embedded network operators and consist of sensible and balanced mechanisms designed to introduce additional consumer protections into a growing market.
Extreme Weather and Natural Disaster- Responses by Energy Retailers
treme weather events as we are seeing in NSW and QLD should be front of mind for energy sellers in the context of the provision of essential services. In this post, we set out what energy retailers must and should do in response to such events.
Overlooked Embedded Network Regulatory Obligations
Embedded networks are privately owned electricity networks that serve multiple customers with a single connection point to the wider distribution network. The regulatory framework that applies to embedded networks is complex and it can be difficult for embedded network operators to understand and comply with their regulatory obligations.
Here we examine some of the regulatory obligations, in those jurisdictions that have adopted the National Energy Customer Framework, that are commonly ‘overlooked.’
The Sumo Fines: Important lesson for all electricity sellers
the negative PR they received) should serve as a warning and reminder to all electricity retailers, not just in Victoria, about the most cost-effective way of dealing with customers who are struggling with their electricity bills.
AER mid-year compliance and enforcement update
On 18 January 2022, the AER released their six-monthly enforcement and compliance update, to summarise and report on their activities from July to December 2021.
The 2022-23 Default Market Offer
The Australian Energy Regulator has published its draft Default Market Offer (DMO) 2022 to 2023 determination. Submissions on the draft DMO are open until 17 March 2022. The final decision will be published in May with changes to apply from 1 July 2022.
The draft DMO reflects key structural changes occurring in the energy market with wholesale prices expected to increase in the short to medium term, coming off successive decreases in the DMO, and representative of risk of the changing market to energy retailers.
Investigating Regulatory Breaches
For an executive within an energy business, identifying a regulatory breach can be a gut-wrenching experience. Being told that your business has inadvertently breached the law, understandably raises concerns about the impact of the breach on your customers, stakeholders, and reputation.
In this post we look at the steps involved in identifying and reporting on a potential regulatory breach.
Price Comparisons under the Electricity Retail Code
On 12 January 2022, the Australian Competition and Consumer Commission (ACCC) announced that energy retailer CovaU Pty Ltd had paid $33,300 in penalties arising from three infringement notices issued for alleged contraventions of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 (the Code).
AEMO Draft 2022 Integrated System Plan review
On 10 December 2021, the Australian Energy Market Operator (AEMO) published the Draft 2022 Integrated System Plan (ISP) (Draft ISP). This was subject to a ‘transparency review’ by the Australian Energy Regulator (AER), released 7 January 2022. The Draft ISP is now in the consultation stages, prior to final publication in June 2022.
The Essential Services Commission (Vic) Minimum Feed-In Tariff review 2022/23
On 2 December 2021, the Essential Services Commission (ESC) released its draft decision for minimum feed-in tariffs for solar exporters. It is anticipated that the
Refresher: the Australian Energy Regulator’s (AER) Exempt Selling Guidelines
NB: The most recent guidelines for exempt energy sellers are contained in the AER (Retail) Exempt Selling Guideline dated March 2018. In February 2021, the
ACCC Report: Prices, Profits, and Margins in the Supply of Electricity in the NEM
The Australian Competition and Consumer Commission (ACCC) has published its sixth report as part of its inquiry into the prices, profits and margins in the
Victorian Essential Services Commission Annual Report 2020-21 – Summary
On 17 November 2021, the Victorian Essential Services Commission (ESC) released its Annual Report for 2020-21 (the Report). The purpose of the Report is to provide an overview of the previous financial year (ending 20 June 2021), including what they did, how they performed on key goals, and what they plan to do in the future.
AER Calls for Energy Retailers to Focus on Support for Customers in Hardship
stralian Energy Regulator (AER) has called on energy retailers to provide “better” support to customers in hardship. The AER released its Annual Retail Markets Report 2020/21 on 30 November (2021) and noted that despite the fall in retail energy prices for households for the year 20/21, energy debt had risen by 12%, and the amount of the debt of customers entering the various retailer’s hardship programs had risen by 21%.
Electricity and Embedded Networks within Residential Parks in NSW
The New South Wales Government is currently reviewing laws that apply to residential and land lease communities. The Government notes that more than 35,000 people live in over 500 residential and these communities across New South Wales.
The Ongoing Viability of Big Batteries
On 2 December 2021, the AEMC published its final decision on its website, under the heading “Incentives for more batteries to enter the market”.
Time to understand “Ring-fencing”
On 3 November 2021, The Australian Energy Regulator (AER) concluded and published a revision of the Ring-fencing Guideline. Parties are expected to be fully compliant
Standardised Models for Regulated Metering Services
The Australian Energy Regulator (AER) is developing a standardised metering services model to use in the future across all jurisdictions. The AER intends to standardise
Simply Energy pays penalty for alleged wrongful disconnection
On 13 August 2021, the Essential Services Commission (Victoria) served a penalty notice on IPower 2 Pty Limited and IPower Pty Limited (trading as Simply Energy). The Penalty notice can be viewed here.
Getting Serious: The Peak Demand Reduction Scheme
The First PDR Initiatives:
– There will be incentives (rebates) for households to purchase and install energy efficient air conditioners (rebates for businesses ACs have been available for some time via other schemes);
– Businesses with EV fleets will be able to export power from their parked vehicles back in to the grid at peak times.
The two initiatives above were cited as examples in the press release on 28 September 2021. There is very little information available as to what other initiatives will be forthcoming.
Alinta Energy improves systems and waives more than $1 million in customer debt following an AER investigation.
On 8 October 2021, the Australian Energy Regulator (AER) announced that, in response to an investigation, Alinta Energy have substantially improved its systems and was
An Alternative to Compliance by Coercion
Alternatives to penalties are provided by the behavioural sciences, including command and control and economic instruments such as ‘nudging.’ The underlying concept is to create an environment in which individuals make choices based on nudges towards the desired state. This area is well-developed thanks to the advertising industry and, in the context of compliance, is considered to be ‘at the forefront of regulatory policy and governance.’
AER Life Support Registration Guide – A Good Reminder
On 1 August 2021, the new obligations regarding life support came into effect. These obligations were made pursuant to a rule change published by the