Converting an existing site into an embedded or exempt network is a complex process that requires careful consideration of the relevant regulations and requirements. This guide outlines the steps required to convert a site into an embedded network in those states that have adopted the National Energy Customer Framework (NECF).
Step 1: Prior to Lodging an Application
Before lodging an application for approval with the Australian Energy Regulator (AER), the prospective Exempt Network Operator must inform the relevant registered distributor in writing of the proposed conversion.
Step 2: Provision of Retrofit Information
The prospective Exempt Network Operator must provide notice, by letter, to all tenants at the retrofit location, of the plan to install an embedded or exempt network at the site. The prospective Exempt Network Operator must provide each tenant/resident with the following information (inter alia) regarding the installation of the embedded or exempt network:
- A written notice which provides the tenant/resident with information concerning:
- The tenant/resident’s right to choose their own retailer, even within an embedded or exempt network
- The tenant/resident’s ability to enter into an energy only contract with an authorised electricity retailer
- The obligations regarding electricity offer matching, as set out in conditions 4.9.3 and 4.9.4
- The obligations regarding duplication of network fees, as set out in condition 4.9.5
- A copy of the electricity sales agreement to be offered by the exempt person
- The contact details of a representative of the prospective Exempt Network Operator who will address any concerns and queries relating to the planned retrofit
The prospective Exempt Network Operator must ensure that information regarding the proposed retrofit is clearly, fully and adequately disclosed, and that it has regard to a person’s capacity to provide consent.
The prospective Exempt Network Operator must meet with occupants, answer questions and resolve complaints and keep records of all activities it has undertaken.
Step 3: Apply for approval
An application can only be lodged if the required number of tenants consent to the conversion. It is important to note that consent to convert is not the same as consent to be supplied with electricity.
Step 4: Appointment of an Embedded Network Manager
Subject to the further requirements specified in section 4.7, an Embedded Network Manager (ENM) must be appointed and an appointment maintained if the trigger conditions specified in condition 4.4.2 are met. It should be noted that if the requirements specified in condition 4.7.2 for reversion to no ENM have been met, this condition will not apply.
Recommendations
When converting a site into an embedded network, it is important to ensure that all relevant regulations and requirements are met. To ensure a successful conversion, it is recommended that:
- All tenants at the retrofit location are provided with the necessary information regarding the installation of the embedded or exempt network
- The prospective Exempt Network Operator has regard to a person’s capacity to provide consent
- An Embedded Network Manager is appointed and an appointment maintained if the trigger conditions specified in condition 4.4.2 are met
- The requirements specified in condition 4.7.2 for reversion to no ENM are met
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