The Australian Energy Market Commission (AEMC) has released its final review on the arrangements for customers who purchase power from their embedded network provider instead of buying direct from electricity retailers.
The AEMC’s Review of regulatory arrangements for embedded networks final report recommended new rules and laws to give these electricity customers more access to retail competition and consumer protections.
The recommendations are part of the AEMC’s market-wide energy reform program called Power of choice, which is putting new arrangements in place to give people more choices in how they use electricity and manage their bills.
It follows the introduction of new rules made by the Commission so embedded network customers can choose their own electricity retailer if they want to.
Embedded networks are private electricity networks serving multiple premises.
There are now over 200,000 embedded network customers, and rising.
Embedded networks can provide benefits to consumers, provided they are appropriately regulated and customers are fully informed when they sign up to these deals which can last for many years.
These benefits can include innovative products and services to help manage energy costs such as on-site solar generation and demand management services.
The review found many embedded network customers are not receiving better prices and are less able to change supplier if they are unhappy.
In practice, embedded network customers receive fewer consumer protections than customers with standard supply arrangements.
Also, the Australian Energy Regulator does not have appropriate powers to monitor and enforce consumer protections for embedded network customers.
The AEMC will start work on detailed advice on implementing the framework which has been set out in the review’s final report in 2018.
This work will include stakeholder consultation on the necessary law changes and change requests for new rules.
The Commission has also made a number of recommendations that should be progressed by the COAG Energy Council, state and territory governments and the Australian Energy Regulator as a matter of priority.
These include improving monitoring and enforcement, access to ombudsman schemes and information provision.