The Australian Energy Regulator (AER) has granted a class waiver under its Electricity distribution ring-fencing guideline to distribution network service providers (DNSPs).
The class waiver enables DNSPs to lease batteries funded though the Commonwealth Government’s Community Batteries for Household Solar Program. This follows the Australian Government’s commitment to fund up to 400 new community batteries.
Following consultation, the AER considers the design of the class, criteria and controls that a DNSP must meet to be eligible for this class waiver are sufficiently rigorous to mitigate the potential risk of cross-subsidisation and discrimination that could arise from DNSPs leasing community batteries.
More information on the application of this waiver is available in our final decision and our Guidance note.
The AER is the regulator for electricity and gas networks in every state and territory in Australia except Western Australia.
Ring-fencing, in relation to DNSPs, refers to the separation of distribution services provided by a DNSP from the provision of unregulated or contestable services by a DNSP, or an affiliated entity.
Ring-fencing operates to separate regulated activities from competitive business activities to support competitive markets. The electricity distribution ring-fencing guideline prevents DNSPs from discriminating in contestable markets in favour of themselves or affiliated entities. It also prevents DNSPs from using revenue earned from regulated services to cross-subsidise unregulated or contestable services.