Modernising Electricity Regulation: The AES Framework and Embedded Networks in Western Australia

Modernising Electricity Regulation: The AES Framework and Embedded Networks in Western Australia

Embedded Networks, WA Energy Compliance
Background The existing licensing framework overseeing the sale and supply of electricity in Western Australia (WA) has struggled to adapt to the rapid expansion of emerging and atypical electricity business models in recent years. To address this, in 2019, the then Minister for Energy commissioned Energy Policy WA to assess the regulatory framework in Western Australia. In 2020, Energy Policy WA initiated consultations on a proposed regulatory framework for various categories of 'alternative electricity services' called the Alternative Electricity Services (AES) registration framework. This framework aims to apply customer protection obligations to persons providing electricity services through atypical business models not covered by the existing licensing framework, or where the current framework is deemed inadequate. Legislative amendments to the Electricity Industry Act 2004 (WA) to give effect to the AES…
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The Victorian Renewable Energy Condition (embedded networks)

The Victorian Renewable Energy Condition (embedded networks)

Embedded Networks, Victorian Energy
In response to an enquiry into embedded networks in Victoria, the Victorian government gazetted the 2022 General Exemption Order with new requirements for residential embedded network. Chief among those was the 'Renewable Energy Condition' that applies to any entity operating under the VR2 exemption. Let's delve into the specifics of when this condition applies, how it operates, and the implications for compliance. Anyone who proposes to rely on the VR2 exemption must ensure that they obtain independent legal advice- noting that this article is a summary and is not intended to be an exhaustive review of relevant compliance obligations. Applicability of the Renewable Energy Condition The renewable energy condition applies to new embedded networks with 10 or more residential customers. An embedded network is a private electricity network that serves multiple premises and is…
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AER’s Comprehensive Review of the Exemptions Framework for Embedded Networks

AER’s Comprehensive Review of the Exemptions Framework for Embedded Networks

AU Energy Compliance, Embedded Networks
AER's Comprehensive Review of the Exemptions Framework for Embedded NetworksThe Australian Energy Regulator (AER) is undertaking an extensive review of the exemptions framework for embedded networks, as revealed in their recent issues paper dated November 2023. The review comes in the wake of rapid growth in embedded networks and mounting concerns about customer outcomes. This article delves into the details of the AER's review, presenting the key issues and proposed changes that could reshape the future of embedded networks in Australia. The AER has released a comprehensive issues paper signalling a deep dive into the regulatory exemptions for embedded networks. As the energy landscape evolves and embedded networks proliferate, the AER's review underscores the paramount importance of consumer protection and market transparency. Embedded Networks Under the Microscope Embedded networks are…
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AER Releases Annual Compliance and Enforcement Report: Focus on Supporting Vulnerable Customers and Efficient Energy Markets

AER Releases Annual Compliance and Enforcement Report: Focus on Supporting Vulnerable Customers and Efficient Energy Markets

AU Energy Compliance
The Australian Energy Regulator (AER) recently released its Annual Compliance and Enforcement Report for 2022–23, outlining its activities over the past year to monitor and enforce compliance with Australia’s national energy laws and rules. A key focus has been on supporting vulnerable customers, including those experiencing financial hardship. The AER has also acted to support the efficient operation of competitive energy markets through monitoring compliance of generators, gas pipelines and retailers. In the report the AER note that “Compliance with national energy laws gives consumers and energy market participants confidence that energy markets are working effectively and in their long-term interests.” The AER set five compliance priorities for 2022–23, focusing on consumers, wholesale electricity and gas markets. Supporting Consumers Experiencing Vulnerability A top priority was effective identification of residential customers…
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Key points from Executive Board Member Geoff Summerhayes’ speech to the Financial Services Assurance Forum- Lessons for Energy Sellers

Key points from Executive Board Member Geoff Summerhayes’ speech to the Financial Services Assurance Forum- Lessons for Energy Sellers

AU Energy Compliance
Cyber threats are accelerating and evolving rapidly. The COVID-19 pandemic has led to a surge in online activity and remote working, providing more opportunities for cyber criminals to attack. Boards and internal audit functions often lack understanding and expertise in cyber security, leaving organisations vulnerable. To address this, APRA has released a new Cyber Security Strategy for 2020 to 2024. It aims to: Establish a baseline of cyber controls including information sharing and incident response. The goal is to address basic cyber hygiene issues, foster collaboration, and ensure organisations are prepared for breaches. Enable boards and executives to properly oversee cyber risks. APRA will provide guidance and increase scrutiny of cyber governance. Boards need to understand cyber risks and take action. Internal audit functions also need to strengthen their cyber…
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<strong>Embedded Network Action Plan – New South Wales</strong>

Embedded Network Action Plan – New South Wales

AU Energy Compliance, Consultation
The Embedded Network Action Plan sets expectations for embedded network operators to better engage with their customers. This comes after reviews and inquiries found that some customers of embedded networks face poor outcomes due to gaps in the current regulatory framework. The NSW Government Embedded Network Action Plan aims to provide equitable consumer and price protections for customers of embedded networks. The plan outlines immediate and medium-term actions to improve outcomes for these customers. Immediate actions: Introduce a maximum price for energy sold to customers of hot and chilled water embedded networks and gas embedded networks to protect against unreasonably high prices. Release a Ministerial Statement of Expectations (see below) Medium-term actions: Implement policy updates to strengthen consumer protections for hot and chilled water embedded network users. Broaden the Energy…
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IPART review into Embedded Networks in NSW

IPART review into Embedded Networks in NSW

AU Energy Compliance, Embedded Networks
The Independent Pricing and Regulatory Tribunal (IPART) has been requested by the Hon. Victor Dominello MP, Minister for Customer Service, to investigate and report on embedded network issues in New South Wales (NSW). Embedded networks are private energy networks that serve multiple customers and are connected to another distribution or transmission system in the national grid. They are typically found in residential developments, shopping centers, caravan parks, and other lend lease communities. The investigation aims to address regulatory gaps in customer protection frameworks and ensure fair pricing for customers in embedded networks. Proposed Changes and Impact on Businesses: IPART will develop appropriate methodologies for setting maximum prices for hot and chilled water supplied through embedded networks. The possibility of prohibiting new embedded networks for hot and chilled water in NSW…
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Our submission to Ausgrid’s Draft Plan 2024-2029

Our submission to Ausgrid’s Draft Plan 2024-2029

AU Energy Compliance, Embedded Networks
NSW distributor Ausgrid is proposing, in its draft plan 2024-2029, to introduce new embedded network tariffs that would have the effect of increasing network costs by approximately 30%. The reasons that Ausgrid advance for the proposed EN Tariffs centre around the nebulous concepts of equity and fairness to other network users. When comparing the electricity market today to the electricity market in April or May 2022, we see that there are fewer market offers available for consumers, higher prices on most market offers, and fewer retailers (with 8 retailers entering the Retailer of Last Resort scheme since 1 May 2022). Against this background, a proposal to introduce EN Tariffs that would result in a ~30% increase in network charges (Ausgrid’s Pricing Directions Paper for 2024-2029 para 4.4.3), needs to be…
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