AER Review of Exempt Network Guideline

by Energy Action | Sep 14, 2016
The AER has commenced its review of the Exempt Network Guideline. Under the National Electricity Rules all network operators must either register with AEMO or obtain an exemption from the AER. The exemption alternative is designed to allow the operators of embedded networks to carry on their business without the need to meet the same regulatory requirements as those placed on large network operators such as Ausgrid, Energex, South Australia Power Networks and CitiPower.

The AER’s review has been prompted by a change to the National Electricity Rules to establish the new position of the Embedded Network Manager. This position will assist embedded network customers who are seeking to take supply from a national retailer rather than from the owner of the embedded network to which they are connected. This process is known as “opting out” of the embedded network and it relates to commercial arrangements only, not to any change in the electrical connection between the customer and the embedded network which will continue unaffected.

As part of this review the AER will provide guidelines as to which embedded networks will be required to appoint an Embedded Network Manager and which will not. Whilst there are some exceptions the current proposal is that the majority of embedded networks will be required to appoint an Embedded Network Manager if they have 30 or more customers connected to the network. This will capture the majority of embedded networks.

Once the Embedded Network Manager has been appointed it will be his responsibility to liaise with national retailers wishing to take over from the network operator the commercial arrangements for supplying electricity to the customer. This will involve things such as making sure that the customer’s meter is correctly registered with AEMO.

Currently some embedded network operators are acting to hinder opting out by embedded network customers even though this is not permitted. By making these changes the AER is hoping to make it easier for customers of embedded networks wishing to obtain their supply through commercial arrangements with a national retailer.

The AER’s review is expected to be complete by this December.

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