New Consultation Seeks Input on Energy Price Regulation for Embedded Networks

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The New South Wales Independent Pricing and Regulatory Tribunal (IPART) has released an industry consultation paper as part of its review into regulating energy prices in embedded networks across the state.

Embedded networks refer to private energy networks that serve multiple customers, like apartment buildings or retirement communities. They currently face little regulation on pricing compared to standard energy customers.

The paper notes there are two key issues up for discussion:

  • What is the right level of customer protection? IPART’s preliminary view is that maximum prices should be lower than the regulated Default Market Offer that caps prices for standard energy deals. This recognizes that embedded network customers can’t shop around for better rates.
  • How should maximum prices be set? IPART has proposed 7 criteria for assessing pricing approaches, like ensuring costs are recovered and incentivizing efficiency. Stakeholders are invited to suggest methodologies and provide input on specific considerations like metering, customer types, and enforcement.

The consultation is part of a broader review following concerning findings from a NSW Parliamentary Inquiry last year. The Inquiry revealed cases of exorbitant bills for embedded network customers up to $9,700 over 14 months.

IPART Chair Peter Boxall said “There are currently few limits on [embedded networks’] prices, and it is difficult for individual customers in embedded networks to switch retailers if they are unhappy with their supplier.”

The paper also seeks feedback on whether new hot water and chilled water embedded networks should be banned altogether, though notes they may enable innovation.

Finally, embedded network operators, retailers, and other stakeholders are asked to provide details to inform the review, such as current customer numbers, prices, costs and metering arrangements.

Submissions are open until September 11, 2023. IPART encourages consumers and industry members to have their say to shape the outcomes of this important review.

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