The AEMC has commenced a review of regulatory arrangements for embedded networks under the National Energy Retail Law (NERL) and National Energy Retail Rules (NERR). The Terms of Reference were received from the COAG Energy Council in December 2016.
The purpose of the review is to identify and assess any issues for embedded network customers under the NERL and NERR and identify appropriate solutions. This will be informed by the experiences of embedded network customers.
The review will determine whether current regulatory arrangements under the NERL and NERR for embedded network customers remain appropriate. The AEMC will consider:
regulatory arrangements for exempt network service providers and exempt retailers
customer protections for embedded network customers
barriers to embedded network customers accessing competitive retail energy offers.
The review will also consider broader issues related to embedded networks in the National Electricity Law, National Electricity Rules, National Gas Law, National Gas Rules and jurisdictional instruments.
The AEMC will recommend to the COAG Energy Council any further work required, if necessary, including any changes to the NERL and NERR.
The AEMC will consult with stakeholders throughout the review process and welcomes stakeholders to contact the project team at any time. A consultation paper will be published in April 2017, which will outline key issues and questions for stakeholders and call for written submissions.
The COAG Energy Council’s request to the AEMC to undertake this review arose out of the Embedded networks rule change, completed in December 2015.
A number of substantial retail market issues were raised during the AEMC’s work on the rule change. Due to the limited scope of the rule change request, the Commission did not have the power to make changes to the NERR. The Commission also considered that further analysis and consultation was required on the retail market issues raised by embedded networks, including potential NERL changes.
In the Final Rule Determination, the AEMC recommended that the COAG Energy Council request the Commission to undertake a review of the NERL and NERR to identify and assess the issues regarding the arrangements for embedded network customers. The Commission also recommended that the COAG Energy Council consider whether this review should consider broader embedded network issues.