With only the first month of the year gone there have already been a range of regulatory initiatives announced that affect businesses in the energy industry. In our first monthly update on energy regulation and compliance for the year we identify the regulatory and compliance announcements that you should be aware of, including renewable energy targets.
The GEMS Act Review
On 19 January, the first independent review of the Greenhouse and Energy Minimum Standards Act 2012 (GEMS Act) was announced. The GEMS Act is the legislation that allows the Government to set mandatory minimum efficiency requirements for appliances and products and national labelling requirements.
This five-year independent review is mandated by the Act and will report to the Minister by mid-2018. The terms of reference specify that the review will be carried out shortly (for more information see https://www.energy.gov.au/publications/greenhouse-and-energy-minimum-standards-review-act).
A 2015 GEMS review identified early signs that the GEMS Act regime was performing better than the previous regime where manufacturers and suppliers had to meet different standards depending on the state or territory (see http://energyrating.gov.au/news/gems-review-released).
Renewable Energy Target in sight
On 23 January the Clean Energy Regulator announced that there will be sufficient renewable energy projects built over the next three years to meet the Renewable Energy Target in 2020 (see http://www.cleanenergyregulator.gov.au/Infohub/Media-Centre/Pages/Media%20updates/NewsItem.aspx?ListId=19b4efbb-6f5d-4637-94c4-121c1f96fcfe&ItemId=468).
Milestones are being reached ahead of schedule in light of a record level of investment in renewable energy in 2017. One of the major shifts has been a surge in large-scale solar projects. It is expected that this extra supply will lead to a reduction in wholesale electricity prices over the next three years.
It remains to be seen how the Government will integrate the Renewable Energy Target with the National Energy Guarantee scheme which is still in development (for further information see https://compliancequarter.com.au/national_energy_guarantee_part_2/).
Federal Court confirms Australian Energy Regulator (AER) revenue decision
On 18 January the full Federal Court confirmed the AER October 2015 revenue decision for SA Power Networks (SAPN) (see https://www.aer.gov.au/news-release/consumers-win-as-full-federal-court-confirms-aer-revenue-decision-for-sa-power-networks). SAPN had proposed recovering $4.5 billion from consumers over the five-year regulatory period commencing on 1 July 2015. AER had determined that only $3.8 billion was required for SAPN to meet its obligations.
Note that the Government’s abolition of Limited Merits Review process last year means that distributors will no longer be able to challenge AER decisions in this way. For further information on that law change see https://compliancequarter.com.au/merits-review/.
AER consultation on Draft Retail Performance Reporting Procedures & Guidelines
These draft Guidelines were released for consultation in late December but submissions can be made up until 19 February (https://www.aer.gov.au/communication/aer-invites-submissions-on-draft-amendments-to-aer-retail-law-performance-reporting-procedures-and-guidelines). The draft Guidelines concern the retail market performance reporting obligations of the AER and how it is to collate information from retailers in order to meet those obligations. Key amendments in the draft Guidelines include requiring energy retailers to provide:
- information on the rollout of smart meters;
- further information about customers experiencing payment difficulties;
- further detail about customer contracts.
Other amendments concern timeframes for reporting and the manner in which information must be submitted.