As part of the ‘Power of Choice’ reforms, on 1 December 2017, the life support notification obligations for embedded networks were updated. Life support notification obligations ensure that those capable of disconnecting electricity supply (i.e. retailers and distributors) are aware of customer life support needs (such as the connection of a kidney dialysis machine or a ventilator).

In today’s article, we explain what the life support obligations in embedded networks are and why it is essential that all businesses involved with an embedded network understand the obligations.

life support obligations
Photo by Hush Naidoo on Unsplash
By Dr Drew Donnelly, Compliance Quarter.

Background to Life Support Obligations

In an embedded network there may be only one entity directly involved in energy supply. That is, there might be one business which operates the embedded network (under a network exemption), sells energy to off-market customers (as an exempt seller or with a retail authorisation), and manages customers that wish to go ‘on’ and ‘off’ market (the embedded network manager). But, often there will be different actors performing each function, or contractors providing some of the services. Where many actors are involved, this can lead to confusion, for both businesses and customers, as to who is responsible for what, including life support obligations.

Furthermore, the ‘Power of Choice’ reforms, which are now fully in effect (as of 1 December 2017), could be seen as introducing new risks. First, it is possible that there will be more customers switching energy suppliers, increasing the amount of customer information transferred and perhaps increasing the risk that information gets lost. Second, the ‘Competition in Metering’ rule change means that, for the first time, retailers will be able to arrange for remote de-energisation through the Metering Co-ordinator[1]. Before December 1 2017, it was only the Local Network Service Provider for the embedded network as a whole, or the embedded network operator themselves that had the ability to disconnect an embedded network customer. This means that it is now crucial, that another market participant (the retailer of an embedded network customer), is aware of life support requirements.

Regulatory Response

When regulators were considering how to deal with life support requirements in light of the ‘Power of Choice’ reforms, it was determined that the embedded network operator would have notification obligations for life support customers (i.e. the obligation to inform retailers of the customer’s electricity-dependent life support needs). This responsibility was not placed on the embedded network manager (ENM), as not every embedded network necessarily has an ENM[2].  

As of 1 December 2017, condition 10 of the network exemption guideline specifies:

Where notified by a customer (‘life support customer’) of the existence of a requirement to maintain supply for life support equipment, the exempt embedded network service provider must, without undue delay, promptly notify the parent connection point retailer of the existence of a life support requirement in accordance with the reasonable requirements of the parent connection point retailer.

In addition, the exempt embedded network service provider must, without undue delay, promptly notify the child connection point retailer when they are informed of life support requirements at a child connection point[3].

In other words, on notification, an embedded network operator must inform their own retailer and the retailer of the customer (where the customer is ‘on-market’) of these requirements.

In addition to condition 10, condition 11 provides that:

An exempt embedded network service provider must not disconnect supply to a life support customer without making arrangements for the safety of a life support customer.

A similar requirement applies under the exempt selling guideline, condition 10:

An exempt person must not disconnect or cease energy supply to an exempt customer’s premises where a person residing at the exempt customer’s premises requires life support equipment that depends on energy for its operation.[4]

The life support obligations of retailers and distributors, including the rules relating to supply interruption and keeping a register of life support information are set out in Part 7 of the National Energy Retail Rules. Note, the Australian Energy Market Commission has recently consulted on a draft rule change that would strengthen life support protections by requiring distributors and retailers to implement life support protections more quickly.[5]

What does this mean for Embedded Network Managers?

While ENMs may not have the formal obligation for life support notification, it is essential that ENMs are familiar with these requirements for two reasons. First, familiarity with the exemption guidelines (including life support obligations) is a requirement of ENM accreditation. Second, customers may not always know who to talk to about life support requirements. In light of this, it is important that all ENMs have in place a procedure for ensuring that life support information they become aware of gets to the right parties.

If you think we could be of service in helping you meet any of your embedded network regulatory obligations, please get in touch.

 

 

[1] See p61, Rule Determination: National Electricity Amendment (Embedded Networks) Rule 2015

[2] See p40, Rule Determination: National Electricity Amendment (Embedded Networks) Rule 2015

[3] See the Electricity Network Service Provider Registration Exemption Guideline at https://www.aer.gov.au/system/files/AER%20electricity%20NSP%20Registration%20Exemption%20Guideline%20-%20Version%205%20-%201%20December%202016_1.pdf. Similar notification obligations are also contained in the Retail Exempt Selling Guideline, condition 16.

[4] See the Retail Exempt Selling Guideline at https://www.aer.gov.au/retail-markets/retail-guidelines-reviews/retail-exempt-selling-guideline-march-2016.

[5] To read more go to http://www.aemc.gov.au/Rule-Changes/Strengthening-protections-for-customers-requiring.

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