Final Report on Updating the Regulatory Framework for Embedded Networks

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook

The Australian Energy Market Commission (AEMC) has just released its final report on the embedded networks update. This is a quick update on the core proposals, changes since the draft report and the new implementation timeline.

To learn more, sign up for our free webinar on the changes on Friday 28th June at 3pm.

By Dr Drew Donnelly, Compliance Quarter

Key changes for new embedded networks

  • Most exempt embedded network operators will need to be registered as a new class of network service provider, an ‘Embedded Network Service Provider’. Note, however: Class exemptions will still exist for a small group of ‘Exempt Network Operators’, including operators of some temporary accommodation. These exemptions will require registration. Exemptions for individuals will still be available in special circumstances.
  • Most on-sellers will require authorisation as a new class of ‘off-market retailer’. The obligations for these retailers will be similar to the obligations for regular ‘market retailers’.
    Improved consumer access to retail market competition.
  • A metering coordinator will be required to be appointed for connection points in the embedded network to enable customers to switch retailers more easily. All customers will have Network Metering Identifiers (NMIs) and be visible in the Australian Energy Market Operator’s market systems by other retailers. This is intended to enable better access to competitive retail offers.

Changes since Draft Report

There have been some changes and additions since the draft report released on 31 January 2019 , including:

  • Transition arrangements for legacy networks;
  • Additional analysis of gas embedded networks;
  • Introduction of a new connection framework for registered participants, including performance standards;
  • Reintroduction of individual exemptions;
  • Dropping the requirement for registration of off-market retailers with the Australian Energy Market Operator (AEMO).

Implementation Timeline

These AEMC proposals require approval by the Council of Australian Governments (COAG) and must go through the South Australian law and rule change processes. In addition, a range of new Australian Energy Regulator (AER) amendments to existing guidelines, and jurisdictional regulatory changes are required.
There is no fixed date for the above processes to be complete, but AEMC estimates that these changes could occur by mid-2020. Once passed, new embedded networks would be subject to the changes 12 months later (i.e. on projected timelines, in mid-2021). This date is known as the ‘effective date’.

Legacy Networks

The changes proposed and the implementation timeline set out above apply to new embedded networks. For legacy embedded networks, the following is proposed:

  • Those currently operating under deemed or individual exemptions will not be required to comply with the new changes;
  • Existing embedded networks, operating under a registrable exemption, established prior to 1 December 2017, will be subject to a ‘partial transition’. Retailer authorisation will be required, within two years of the ‘effective date’, but registration as an ENSP will not.
  • Embedded networks, operating under a registrable exemption, established on or after 1 December 2017 up to 31 December 2019 will be subject to a ‘full transition’ and will need to fully comply with the new requirements within 2 years of the effective date of the new framework;
  • Embedded Networks established between 1 January 2020 and the effective date, will need to fully comply with the new requirements within 9 months of the effective date.

For more information on the Final Report see https://www.aemc.gov.au/market-reviews-advice/updating-regulatory-frameworks-embedded-networks.

More to explorer

Technicians installing photovoltaic solar panels on roof of house.

Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

On 11 April 2024, Compliance Quarter put forward its submission on proposed changes to the AER Compliance Procedures and Guidelines. The AER is reviewing its Compliance procedures and guidelines, which set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law must submit compliance information and data to the AER. We argue that there should be consideration of measures to incentivise early reporting of potential breaches. These may, for example, take the

person wearing foo dog costume

Obligations of Energy Retailers Regarding Best Offer Information

Energy retailers in Victoria have specific obligations under the Energy Retail Code of Practice to provide clear information to customers about their ‘best offer’ – that is, the plan that would minimize the customer‘s energy costs based on their usage history. The objective is to ensure small customers can easily understand whether they are on the retailer‘s best plan for them and how to access the retailer‘s best offer if not. One of the significant challenges in the energy sector (as in banking and elsewhere) is that customers

low angle photo of sydney opera house australia

Guide to the National Energy Retail Rules

The National Energy Retail Rules (NERR) are a set of rules that govern the sale and supply of electricity and gas by retailers to consumers in Australia, alongside the related National Energy Retail Law (NERL). The NERR came into effect on 1 July 2012 in Tasmania, the Australian Capital Territory, and the Commonwealth. South Australia followed on 1 February 2013, New South Wales on 1 July 2013, and Queensland on 1 July 2015. The NERR do not yet apply in

Leave a Reply

Your email address will not be published. Required fields are marked *