Page 4260 - Week 12 - Tuesday, 24 October 2017

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These safeguards on the exemption-making power are very important and involve a detailed consideration of the individual circumstances of a class of utility services and the appropriateness of other legislation that applies to it. The safeguards ensure that there can be no arbitrary exercise of the exemption-making power and that it is subject to detailed consideration by the minister and advice from the regulatory expert before an exemption regulation can be made. These safeguards are necessary limitations and ensure that any decision to exempt a class of utility services must be based on supporting evidence.

I now move to discuss the first use of the exemption power. Clauses 6 and 8 of the bill provide regulations that exempt embedded networks from each act. An embedded network is an electricity distribution system which involves multiple customers who are aggregated through a single connection point to the electricity network. Embedded networks are in operation in other states and are becoming popular as an incentive to new buyers in apartment buildings as there is the potential for lower prices offered by the embedded network operator compared to the standard market rate. Embedded networks offer potential cost savings for customers due to their aggregation of customers and the combined buying power which results. Embedded networks are also commonly operated in caravan parks, shopping centres and retirement villages.

Because the embedded network by definition involves the distribution of electricity through its network, the regulatory regimes under the Utilities Act and the Utilities (Technical Regulation) Act are enlivened. This means that while the embedded network is not too dissimilar to the standard electrical wiring in an apartment building and only contains an extra electricity meter and some additional wiring, it is required to hold a licence under the Utilities Act and an operating certificate under the Utilities (Technical Regulation) Act. This is a heavy regulatory requirement that is not commensurate with the risk posed by the embedded network.

The bill includes specific regulations which exempt embedded networks. I am satisfied that this class of utility services meets the criteria in clauses 4 and 7 of the bill. The retail relationship component of embedded networks is appropriately regulated by operation of sections 75(b) and (c) of the Utilities Act and the application of protections under national electricity laws.

Those operators who sell electricity are regulated under the National Energy Retail Law (ACT), also known as the NERL, and must either be authorised NERL retailers or NERL exempt sellers. Sections 75(b) and (c) of the Utilities Act operate to make a certain part of the act apply to NERL retailers and NERL exempt sellers as if they were licensed utilities under the act.

For our purposes today this means that part 12 of the Utilities Act allowing for customers to complain to the ACT Civil and Administrative Tribunal, or ACAT, about utilities applies to embedded network operators and installs basic protections for customers. These basic protections include the right of a customer to apply to ACAT to maintain the provision of utility services where the failure to provide services or the withdrawal of services would cause substantial hardship on the customer.


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