protecting consumers in a changing energy world · australian energy market operator as a network...
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Participation in the market Any party that engages in an electricity transmission or distribution activity must either be registered with Australian Energy Market Operator as a network service provider (NSP) or gain an exemption from the Australian Energy Regulator (AER).
NER Chapter 2
Anyone selling energy to customers requires a retail authorisation or an exemption from the requirement to have a retail authorisation.
Energy retailers must apply to AER for an authorisation.
NERL Part 5 s88
A person who owns, controls or operates an embedded network may apply for a network exemption from the AER.
NERL Part 5, Division 6
Exempt Network Service Providers are required to comply with conditions attached to their exemption.
Electricity Network Service Provider Registration Exemption Guideline Version 5
Exempt persons are required to comply with conditions attached to their exemption. Specific obligations vary and will depend on whether the class relates to residential or commercial/retail customers.
AER Retail Exempt Selling Guideline – Version 4
No authorisation/licensing requirement
Right to connect/right of supply Distributors must offer customer connection services to retail customers connected to their distribution network.
Retailers must have a standing offer to sell electricity.
NERL s22
An exempt person cannot refuse to sell energy to a customer who meets the criteria for the exemption class except in accordance with relevant disconnection provisions.
Condition 1.1, Appendix A-2:
No statutory right to be offered sale and supply from retailers or distributors.
NERL s66 Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Contractual arrangement with microgrid operator.
Information Provision A retailer must publish on its website a summary of the rights, entitlements and obligations of small customers, including: (a) the retailer’s standard complaints and dispute resolution procedure; and (b) the contact details for the relevant energy ombudsman.
NERR cl 56
Information that must be provided to the exempt customer at the start of their agreement in relation to the following:
• Applicable energy price plans
• All associated fees and charges applicable to the sale of energy
• Right to elect a retailer of choice
• Billing and payment arrangements
• Timing and contents of bills
• Setting and amending of customer price plans
• Overcharging
• circumstances when disconnection can occur
• Reconnection
• Concessions and rebates
Condition 2.1, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
No statutory obligations on information that must be provided to microgrid customers.
Choice of retailer NER includes regulatory obligations between distributors and retailers to facilitate a customer’s
NER includes regulatory obligations between distributors and retailers to facilitate a customer’s
Where an exempt customer is eligible to purchase energy from a seller of their choice the exempt person must not do anything to discourage or
No statutory right to choice of retailer.
capacity to switch retailer.
NER Chapter 6B
capacity to switch retailer.
NER Chapter 6B
prevent them from exercising this choice.
Condition 13, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Pricing and charging - generation N/A Large scale electricity generation is sold into wholesale market and is purchased by the customer’s retailer in the wholesale market.
NER Chapter 2
N/A
Contractual arrangements with microgrid operator.
Pricing and charging - distribution Network services are price regulated to prevent monopolist behaviour in the prices charged to customers.
NEL
NER Chapter 6
N/A N/A No price regulation.
Pricing and charging – usage of electricity
N/A Retailers must have a standing offer to sell electricity.
NERL s22
AER has powers to ensure that customers of exempt sellers can obtain basic consumer protections including pricing requirements.
NERL Division 6 ss109-116
No regulatory requirement as to how retail price is determined or
Retailers are required to publish standing offer price on their website
NERL s23
Retailers can offer “market offers” to customers. Regulation as to how market offer prices are presented – in accordance with the AER Retail Pricing Information Guidelines.
NERL s37
An exempt person must not charge the exempt customer prices higher than the standing offer price that would be charged by the relevant local area retailer for new connections, if the local area retailer were to supply that quantity, or estimated quantity, of energy directly to the premises of the exempt customer.
Condition 7.1, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
presented to the customer.
Terms and conditions of electricity supply
N/A Right to a standing offer/standard contract. Basic contract provisions.
NERL Division 3 ss 21-32
Market retail contracts are required to include minimum protections but are intended to allow more flexibility as to terms.
NERL Division 4 ss33-37
Appendix A2 of AER Retail Exempt Selling Guidelines sets out core conditions for exempt sellers.
Appendix A-2: Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
No obligation to comply with requirements for a standing offer contract.
Service standards – reliability and quality of supply
Distribution network connection to the transmission network
N/A May be required to meet minimum requirements to ensure they do not
Service standards and reliability/quality of supply that forms part
must meet technical requirements.
Distribution networks also have reliability standards set out in NSW licence conditions.
NER Chapters 4, 5 and 7
interfere with the operation of the power system.
of contractual arrangement.
Consumer guarantee provisions in the ACL may apply.
Safety and technical standards Safety regulation applies to the three main NSW distribution systems.
These obligations are the responsibility of local NSW laws, which require the three distributors to hold a licence. There are conditions imposed on distributors through their licence which set minimum reliability and performance standards which the distributors are expected to meet.
Electricity Supply Act 1995
Electricity (Consumer Safety) Act 2004
N/A Safety and technical regulation of NSW distribution systems where the operator is exempt from holding a licence may apply as part of network safety requirements or as a customer installation.
NSW Fair Trading has responsibility for the safety and technical regulation of customer electrical installations.
Electricity Supply Act 1995
Electricity (Consumer Safety) Act 2004
Electricity (Consumer Safety) Regulations 2015
Likely to be considered an ‘electrical installation’ for regulatory purposes.
Electricity (Consumer Safety) Act 2004
Electricity (Consumer Safety) Regulations 2015
Product safety provisions in the ACL may apply to some goods and services.
Electricity (Consumer Safety) Regulations 2015
Electricity Network Assets (Authorised Transactions) Act 2015
Bushfire Management Electricity Supply Act 1995 Division 2A ss 53A-53I
Electricity Supply (Safety and Network Management) Regulation 2014 Part 2 Division 1 Clause 7
N/A N/A NSW Bushfire management regulatory regime would apply.
Vulnerable customers – financial hardship
N/A Retailers must have a published hardship policy approved by the AER and published on its website.
NERL Division 6 ss43-49
Requirements set out for exempt sellers when a customer is unable to pay energy bills due to financial hardship.
Condition 9(1), Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Exempt seller must provide the customer with information about the forms of assistance available if customer is unable to pay energy bills due to financial difficulty as well as the process to follow to seek assistance.
No specific protections unless set out in contract.
Condition 2 (1) (f), Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
An exempt person must offer flexible payment options to a customer who has identified themselves as being in financial difficulty.
Condition 3(2), Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Life support Retailers and distributors have regulatory obligations to manage small customers who are registered as having life support equipment on their premises.
NERR Part 7 s125
Retailers and distributors have regulatory obligations to manage small customers who are registered as having life support equipment on their premises.
NERR Part 7 s124
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.
Condition 10(1)(a), Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Prescribed actions that the exempt seller must take in communicating to the distributor and retailer that there is a customer on life support in the embedded network.
Condition 16, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
No specific obligations unless set out in contract.
Energy social programs – rebates N/A Energy rebates are available in NSW:
(Low Income Household Rebate; Life Support Rebate; Medical Energy Rebate; Family Energy Rebate; Energy Accounts Payment Assistance Scheme, Appliance Offer)
Obligation on exempt seller to use best endeavours to make a claim for an energy rebate, concession or assistance under a relief scheme on behalf of an eligible customer.
Condition 12, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
NSW energy concessions are not available to customers not supplied directly by a retailer.
Disconnection of supply for failure to pay bill
N/A Protections which ensure that retailers cannot de-energise a small customer’s premises for not paying a bill without a procedure being followed.
NERR Part 6
Exempt person must not disconnect energy supply to an exempt customer without a procedure being followed.
Conditions 9 and 10, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
Microgrid operators are not subject to regulatory requirements regarding disconnection.
Dispute resolution Distributors have obligations to provide customers with information about their complaints and dispute resolution procedures.
Distributors must be members of the Electricity and water ombudsman (EWON) scheme.
Authorised retailers have obligations to provide customers with information about their complaints and dispute resolution procedures.
Retailers must be members of EWON scheme.
NERL Part 4 ss79-87
In the event of a dispute the exempt person must make reasonable endeavours to resolve the dispute and advise the exempt customer of any right to access the EWON scheme.
Condition 15, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
No recourse to EWON.
ACL applies as the customers of the microgrid are consumers.
Under the ACL, dispute resolution occurs through Office of Fair Trading.
NERL Part 4 ss79-87
Review is free of charge to small customers.
Electricity Supply Act Part 8 ss96A-96D
Electricity Supply Act Part 8 ss96A-96D
There is currently no obligation for exempt sellers to be members of EWON.
Financial failure N/A All grid connected retail customers are able to be transferred to a Retailer of last resort where an authorised retailer fails.
NERL Part 6 (ss 121-175)
An exempt seller must notify exempt customers and the AER if they are disconnected, or there is any likelihood that they will be unable to continue selling energy.
Condition 17, Appendix A-2:
Core exemption conditions AER Retail Exempt Selling Guideline – Version 4
If a stand-alone microgrid operator fails its customers would be subject to the general law and rules of bankruptcy as creditors.