14 Sep 2017
Queensland embedded network customers to have access to electricity retailers of choice
By Dan Howard, Catherine Phillips
Proposed legislative amendments will remove the barriers to the national embedded network retail competition regime for electricity customers in embedded networks in Queensland. This will enable full access to retailer of choice for embedded network customers in Queensland and allow retailers to sell electricity to those customers.
The AEMC's National Electricity Amendment (Embedded Networks) Rule 2015 (the Embedded Network Rule Change) updated the National Electricity Rules to enable access to retailer of choice for embedded network customers and changed the rights and obligations of embedded network operators and embedded network customers relating to the supply of electricity. However, in Queensland there remained the inability for embedded network customers to contract with a retailer of choice unless the customer was directly connected to the external distribution network.
The Electricity (Batteries and Premium Feed-in Tariff) and Other Legislation Amendment Bill 2017 (Qld) was introduced into the Queensland Parliament on 15 June 2017. The Bill proposes amendments to the Electricity Act 1994 (Qld) which will enable the effective implementation of access to retail competition in Queensland's embedded networks.
The amendments in the Bill if passed, will remove provisions that are inconsistent with the Embedded Network Rule Change. This will enable the effective commencement and implementation of the Embedded Network Rule Change on 1 December 2017.
Current electricity supply arrangements for embedded network customers in Queensland
The Electricity Act currently restricts embedded network customers from accessing offers from electricity retailers unless there is a direct connection with the electricity distribution network. As a result of this, most embedded network customers are only able to purchase electricity from the embedded network operator who acts as the on-seller of electricity having purchased that electricity in bulk from an electricity Retailer.
The proposed changes to the Electricity Act will mean that customers do not need to establish a separate, direct connection out of the embedded network to enable access to the contestable market.
What does this mean for Queensland embedded network operators?
Embedded network customers will have the ability to choose the products, services and provider of electricity retail products. Embedded network operators will continue to be able to sell electricity to embedded network customers, however will need to compete with electricity retailers.
When does the access to retail competition commence?
The Queensland access to retailer of choice regime aims to come into effect on 1 December 2017 and we will keep you updated when the Bill is passed in Parliament.
Next steps for embedded network operators
In June 2017, the Bill was referred to the Public Works and Utilities Committee for consideration. The Committee tabled its report in Parliament on 11 August 2017.
In its report, the Committee recommended that the Bill be passed and did not recommend for any amendments to be made to the Bill. The Bill is expected to be passed in the current sittings.
In the meantime, embedded network operators should consider:
- how access customers to retailer of choice will impact on their business;
- the terms and conditions of supply of electricity to embedded network customers; and
- what those terms and conditions of supply will look like.