Issue date

The Australian Energy Regulator (AER) has accepted a court enforceable undertaking from Icon Distribution Investments Limited and Jemena Networks (ACT) Pty Ltd (together trading as Evoenergy) to address concerns that Evoenergy breached its “ring-fencing” obligations. 

Ring-fencing obligations encourage competition in the electricity distribution sector and play an important role in providing a level playing field for third party operators in the sector, placing downward pressure on prices. 

In May 2023, Evoenergy self reported breaches of its ring-fencing obligations since 1 January 2018, by providing maintenance, operation and inspection services, to a customer in the Australian Capital Territory, in breach of clause 3.1(b) of the Electricity Distribution Ring-Fencing Guideline (the Guideline) and clause 6.17.1 of the National Electricity Rules. 

The Guideline requires Evoenergy and other electricity network businesses to provide only regulated electricity distribution and transmission services and not to provide any other services, thereby ensuring a level playing field for third party providers to compete in the sector. 

By providing other services, Evoenergy may have impacted competition by inadvertently extending its distribution network service monopoly into maintenance, operation and inspection services that are supposed to be subject to competition and thereby potentially discouraging third party providers from entering the market.

The court enforceable undertaking outlines the steps to be taken by Evoenergy to redesign systems and separate assets so that maintenance, operation and inspection services may be provided by another business and it may cease to provide the services. The court enforceable undertaking also requires regular reporting of progress to the AER as well as to the customer.

The AER has also granted a waiver to Evoenergy to provide the maintenance, operation and inspection services to the customer for 24 months, ensuring continued electricity supply to the customer while Evoenergy transitions away from providing the services and undertakes the steps outlined in the court enforceable undertaking such that it may cease to provide these services.

AER Board Member Mr Justin Oliver said that Distributed Network Service Providers have a serious responsibility to comply with ring-fencing requirements and maintain market competition.

“Since its introduction in 2016, the Electricity Distribution Ring-Fencing Guideline has promoted competition in the provision of electricity services by providing a level playing field for third party providers.

“It’s critically important that Distributed Network Service Providers are aware of, and continue to abide by, their obligations in the Guideline and do not unfairly favour their own services in contestable markets,” said Mr Oliver. 

Note to editors


Jemena Networks (ACT) Pty Ltd and Icon Distribution Investments Ltd form the ActewAGL Distribution partnership which trades as Evoenergy. Evoenergy owns and operates the electricity distribution network in the ACT.

Electricity distribution ring-fencing

Ring-fencing refers to the separation of regulated and competitive business activities of an electricity network service provider.

The purpose of this mechanism is to prevent regulated businesses from:

  • favouring their own competitive activities to the disadvantage of other competitors operating in the market
  • using revenue earned from regulated services to cross-subsidise their contestable services.

In November 2016, the AER’s Electricity Distribution Ring-Fencing Guideline was introduced to provide a level playing field for third party providers in new and existing markets for contestable services, in order to promote competition in the provision of electricity services.

For existing services, Distributed Network Service Providers were required to comply with the Guideline’s obligations as soon as practicably possible, but not later than January 2018. 

Our ring-fencing framework sets out the specific obligations applicable to network businesses in line with ring-fencing rules including regular reporting of compliance. 

Learn more about ring-fencing

Court enforceable undertakings

The AER can accept a court enforceable undertaking from a regulated business or from AEMO in relation to any of our areas of responsibility under the national energy laws. An enforceable undertaking might include commitments to rectify the breach, undertake an audit to ensure that the business has identified the root cause of the breach and the risk of future breaches is mitigated, or could contain commitments that relate to consumer redress (for example, debt waivers).


The Guideline recognises that strict adherence to the ring-fencing obligations might result in outcomes that are not in the best interest of consumers in some circumstances. The Guideline makes provisions for ring-fencing waivers which provides the flexibility of allowing exemptions in certain circumstances, subject to the AER’s approval.