Consultation on draft exempt embedded network guidelines (part one): embedded network managers take note

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On 17 November, the Australian Energy Regulator (AER) released the latest Draft Guideline – Exemption from Registration as a Network Service Provider (the Draft Guideline) and an accompanying Issues Paper[1]. AER is consulting on all aspects of the proposed amendments, and encourages submissions from stakeholders by 15 January 2018.

embedded network
Photo by ål nik on Unsplash
By Dr Drew Donnelly, Compliance Quarter.

Of the changes in the Draft Guideline, three relate to the Transmission Connection and Planning Arrangements final rule determination, and four relate to other matters necessary to update and clarify aspects of the guideline.

As the Embedded Network Manager (ENM) regulatory changes have just come into effect (1 December 2017), this article looks at two small changes in the draft Guideline that could have a direct impact on the ENM. In our next piece, part two on the Draft Guideline, we will look at the changes resulting from the Transmission Connection and Planning Arrangements final rule determination.

It is worth remembering that it is a regulatory requirement that ENMs be familiar with the Guideline- Exemption from Registration as a Network Service Provider[2].

First Change: Providing Embedded Network Information

A successful embedded network, both from a commercial and a compliance perspective, requires that a range of functions are performed in a co-ordinated manner. These functions include providing network services (‘Exempt Embedded Network Service Providers’[3]), selling electricity (‘Exempt Sellers’), and facilitating customers going on or off-market (ENMs). These functions could all be performed by distinct business entities or different parts of the one business. A crucial aspect of this co-operation is sharing information.

A change to the Draft Guideline (see 4.8.1.3) provides that the Exempt Embedded Network Service Provider (EENSP) must now specify in an embedded network customer’s bill:

  • ENM contact details
  • the parent NMI for the embedded network[4]

In addition, the parent NMI must be made available on request to:

  • the customer
  • the customer’s retailer
  • the ENM appointed to the embedded network.

This is aimed at ensuring that customers, ENMs and retailers have the information necessary to support the customer’s right of retail choice.

Second Change: Dispute Resolution

The Draft Guideline propose to amend part 4.1.6 of the Draft Guideline and add a condition (4.1.13) to harmonise the dispute resolution requirements with the requirements in the Draft Retail Exempt Selling Guideline.[5] This means that an EENSP needs to be a member, or subject to, an energy ombudsman scheme, where permitted to do so and notify residential customers of their right of access to such a scheme.

So how does this change impact on ENMs specifically? First, this means that businesses which provide several different embedded network functions can further align their dispute resolution policies and procedures as they will be subject to almost identical requirements for their exempt seller and EENSP functions. Second, a customer with a complaint or dispute may not always know who provides which embedded network functions, so it is important that ENMs knows the dispute resolution rules for all embedded network functions.

Remember, that these are simply proposed changes and AER welcomes your feedback by 15 January 2018.

AER also invites stakeholders to attend a forum on Thursday 14 December 2017 to discuss the proposed amendments. The forum is at 9.10am AEST and will be held via VCU in their Canberra, Sydney, Melbourne, Adelaide, Brisbane, Hobart and Townsville offices.

 

 

 

 

 

 

[1] See https://www.aer.gov.au/networks-pipelines/guidelines-schemes-models-reviews/review-of-network-service-provider-registration-exemption-guideline-2017-18.

[2] See http://www.aemo.com.au/-/media/Files/Electricity/NEM/Retail_and_Metering/Metering-Procedures/2017/Qualification-Procedure-MP-MDP-ENM.pdf, appendix A.

[3] Sometimes called ‘Embedded Network Operators’.

[4] The ‘Parent NMI’ is the National Metering Identifier at the parent connection point of the embedded network. This unique identifier is used in the Market Settlement and Transfer Solutions (MSATS) system to specify the ‘gate meter’ to the embedded network and accurately determine energy use in the embedded network.

[5] We discussed these proposed changes here https://compliancequarter.com.au/proposed-new-dispute-resolution-obligations-exempt-sellers/.

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