On 21 May 2015, the Australian Energy Market Commission (AEMC) began consultation on a rule change request from the Australian Energy Market Operator (AEMO) on the regulatory arrangements for embedded networks.
The objective of the Rule change is to support customers in embedded networks having improved access to retail competition. The AER assisted AEMO in the development of the rule change proposal to introduce improved metering arrangements in embedded networks. The intention is that metering in embedded networks should be capable of integration into the broader market systems.
On 26 June 2015 we provided a submission in response to the consultation paper. We support the AEMO rule change proposal as a solution that would enable this objective to be attained.
The AEMC released a draft Rule concerning Embedded Networks. The origin of this draft rule is the AEMC’s Power of Choice Review, which led COAG asking AEMO to develop a draft rule change to make access to retail competition possible in all embedded networks.
This draft rule aims to make it possible for all customers in embedded networks (e.g. shopping centres, apartments, retirement villages, etc.) to access retail competition in those jurisdictions which allow competition in embedded networks.
The AER participated in the development of the AEMO rule change proposal. In making the draft rule the AEMC has required that we amend the AER’s NSP exemption guideline and the ring-fencing guideline for distribution.
The draft rule will also require that we consult on the scope of the application of the new requirement to appoint an ‘embedded network manager’. This role has been proposed to manage the requirement for metering systems that conform to the normal market standards. This is essential for customers to be able to access retail competition.
Our submission confirms we support the rule being made as proposed by the AEMC. We will incorporate the AEMC’s requirements into our planned consultations on each guideline.