Embedded Network Managers in Queensland: What’s the Deal?

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Embedded Network Managers in Queensland: What’s the Deal? In a previous post, we looked at the Electricity and Other Legislation (Batteries and Premium Feed-in Tariff) Amendment Bill 2018 (the ‘Bill’). Today we want to update you on the progress of the Bill and answer the key question: Do consumers in QLD have power of choice?

Embedded Network Managers in Queensland

Photo by Samuel Scrimshaw on Unsplash

By Connor James, Compliance Quarter. 

In our previous post, we discussed the Bill and noted that:

The accepted view is that the effect of this provision (section 23 (2)) prevents residents in embedded networks from fitting the definition of ‘customer’. Therefore, the current law leaves it unclear as to whether embedded network customers in Queensland have the power to change to a retailer of their choice under the National Electricity Law.

Section 23 (2) states:

“[A] receiver [of electricity] is only a customer if the receiver’s premises has an electrical installation that, to the reasonable satisfaction of the distribution entity whose distribution area includes the premises, is capable of receiving supply directly from a distribution entity’s supply network”.

The Bill proposes the removal of s 23(2) from the Act, leaving no room for argument that Queensland embedded network residents are not ‘customers’ for the purposes of the National Law. Provided that the Bill is passed, this will remove any doubt about the ability of embedded network customers in Queensland to switch to their desired retailer.

The above view is supported by the explanatory note which states that an objective of the Bill is to “enable the effective implementation of a new national regulatory framework for retail competition in embedded electricity networks which commenced on 1 December 2017.” and further “amendments to Queensland legislation are required to avoid any conflict with the implementation of this major national reform in Queensland.

The Bill is currently being considered by the State Development, Natural Resources and Agricultural Industry Development Committee. The Committee is due to report back to parliament next week. 

The view of the Department and the AER

Since the publication of our prior post, the QLD Department of Natural Resources, Mines and Energy has released a number of factsheets on embedded networks. The factsheets indicate that the obligation to appoint an embedded network manager is in effect in QLD.

Also of relevance, is the AER’s website tool that helps determine when an embedded network manager needs to be appointed. It appears that this tool was updated to specifically reference the need in SE QLD as well as other in other states that have adopted the National Energy Consumer Framework.

Obviously, it is in the interest of the department to take this interpretation of the legislation. They wouldn’t want to be seen as the only NECF State restricting the rights of their residents to choose a retailer.

So, is an ENM required or Not?

So, do QLD consumers have power of choice (POC) and should embedded networks in QLD be appointing an Embedded Network Manager.

It is our view that Section 23(2) of the QLD Electricity Act may be read as conflicting with the POC reforms, however, the view of the Department of Natural Resources, Mines and Energy and AER is clearly that POC exists in QLD.

Consequently, embedded network operators in QLD should ensure that they appoint an Embedded Network Manager before the expiry of the transitional compliance period (i.e. Before 31 March 2018).

Embedded Network Managers in Queensland

If you would like assistance in understanding the obligations, appointing an Embedded Network Manager contact me today via email by clicking here.

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