Ring-fencing compliance
Release date

The AER has reviewed CitiPower and Powercor’s ring-fencing compliance report for the 2018 regulatory year, and the accompanying independent assessment of compliance undertaken by Deloitte. Deloitte’s reasonable assurance assessment confirmed that CitiPower and Powercor have by and large established appropriate compliance controls as required by clause 6.1 of the Electricity Distribution Ring-fencing Guideline. However, CitiPower and Powercor reported several breaches of the Guideline in 2018. While we agree with CitiPower and Powercor that some of these breaches may not be material, we can see some scope for harms that may impact the objectives of the Guideline and are investigating further.


The Ring-fencing Guideline requires DNSPs to separate their regulated business activities, costs and revenues from other unregulated services. In doing so, the Ring-fencing Guideline aims to promote competition and consumer choice in contestable markets for electricity services, and it aims to ensure efficient costs in the delivery of regulated network services by DNSPs. The Ring-fencing Guideline was first published on 30 November 2016 and updated in October 2017. All DNSPs were required to comply with obligations in the Ring-fencing Guideline by 1 January 2018.

Under the Ring-fencing Guideline, DNSPs are required to prepare an annual ring-fencing compliance report each regulatory year, accompanied by an assessment of compliance by a suitably qualified independent authority.

All DNSPs are required to submit ring-fencing compliance reports and accompanying independent assessments of compliance to the AER with four months following the end of the regulatory year to which the compliance report relates. As Victorian DNSPs’ regulatory year aligns with the calendar year, Victorian DNSPs submit their compliance reports by 30 April each year. All other DNSPs, whose regulatory years align with the financial year, must submit annual reports and accompanying independent assessments of compliance to the AER by 30 October each year.

Further information

Further information on DNSP compliance with the Guideline can be found in the AER’s recently published Annual Ring-fencing Compliance Report 2017-18. This report covers Victorian DNSP compliance as at 31 December 2017, and compliance by all other DNSPs up to 31 June 2018.