Hundreds of thousands of people are customers in embedded power networks like apartment buildings, shopping centres, retirement villages and caravan parks which are regulated differently to the national grid. The AEMC today released a comprehensive reform package to give the fast-rising number of people in these networks access to the same rights, protections and prices as everyone else.

AEMC Chief Executive Anne Pearson, says many of these customers are locked into uncompetitive arrangements and don’t have the same protections as customers who are connected directly to the national grid.

“We’re stepping in with a blueprint for new laws and regulations to get a better deal for customers in private networks,” said Mrs Pearson.

“Everyone should have equal access to consumer protections when it comes to disconnections, payment options, hardship support and notification of planned outages, no matter who they buy their electricity from.”

“We know that many embedded network customers hit a barrier when they try to change retailers because they don’t have a market-compliant meter or sit outside standard customer transfer and billing systems. This should be fixed so all customers can have choice.”

The AEMC is calling for stakeholder submissions on proposed changes to laws, rules and regulations which would give embedded network customers:

  • improved consumer protections in areas including disconnections, billing information, payment options and notification of planned outages
  • new protections for the first time including access to customer hardship programs and continuity of supply in the event of retailer failure
  • stronger regulation which enhances the ability of the Australian Energy Regulator to enforce compliance with obligations to provide protections
  • access to competitively priced market offers by making it possible for them to choose their retailer and requiring better industry financial and data transfer processes to help more retailers compete in embedded networks 
  • market-compliant meters that are registered with AEMO so it’s easier for customers to switch retailer and get better information about their usage and bills
  • the same rights as grid-connected customers when upgrading their connections eg when installing electric vehicle charging stations within apartment blocks
  • improved access to state government services such as concession schemes and emergency financial assistance, provide access to independent dispute resolution, and introduce reliability protections (these changes are recommended to state and territory governments).

Mrs Pearson said putting reforms into action would require a collaborative effort across governments and market bodies. 

“The COAG Energy Council, Australian Energy Regulator, Australian Energy Market Operator, and jurisdictional ombudsmen all have a role to play in delivering these important reforms when they are finalised following consultation with stakeholders,” said Mrs Pearson.

Stakeholder submissions are due by 14 March 2019.

Media: Bronwyn Rosser 0423 280 341 or DL (02) 8296 7847.

Background: Which embedded networks are affected by these recommendations?

Embedded networks are private electricity networks which serve multiple customers from a connection point to the national grid which is managed by an exempt network service provider. 

Generally, these exempt network service providers on-sell electricity to their customers in these off-market networks like shopping centres, retirement villages, apartment blocks and caravan parks. In recent years, installing and operating embedded networks has evolved into a new business model for parties whose core activity is supplying and selling energy, especially in high density apartment buildings, commercial districts and residential villages. 

This has placed the arrangements for embedded networks, which were originally designed for small networks such as caravan parks where the supply of energy was incidental to the main business activity, under stress. In late 2017, the AEMC found that these arrangements were no longer fit for purpose on our Review of regulatory arrangements for embedded networks. Today’s reform package delivers on the AEMC’s recommendations in that review.