An independent review into embedded electricity networks, commissioned by the Legislative Assembly in 2022 and tabled in June 2023, recommended that they continue to be allowed in the ACT. The ACT Government today published its response to the review’s recommendations.
Embedded networks are private utility networks that operate within a building or a self-contained site, and are managed by private companies, which buy energy from the main power grid and sell it to consumers. They are most often found in apartment blocks, retirement villages, caravan parks, and shopping centres.
There are around 56 electricity embedded networks in the ACT, including commercial and residential. Whilst this represents only a small percentage of energy consumers, this number will grow as Canberra densifies, the ACT Government predicts.
The ACT will make sure that consumers are charged fair prices and have strong consumer protections, Shane Rattenbury, Minister for Water, Energy and Emissions Reduction, said.
“With the rapid rise of embedded electricity networks, the ACT Government commissioned a comprehensive independent review in 2022 to make sure Canberrans are getting a fair deal. It’s important that people living in apartment blocks are getting the fair prices and the same consumer protections as other customers.
“The review made 21 recommendations, the majority of which the ACT Government agrees with in principle. The review does not recommend banning embedded networks in the Territory, due to the significant benefits that embedded networks can offer customers.
“The review found no evidence of price gouging in the Territory, and in fact found there were potential benefits offered to consumers by embedded networks such as lower network costs and bulk-purchase electricity arrangements.
The review recommends improving customer access to renewable energy and innovation. Mr Rattenbury said the government is already delivering programs to support this, including a partnership with the Australian Government to deliver a $3.6 million dollar solar installation program in multi-unit apartments that will benefit more than 2,100 Canberra households.
To better regulate embedded networks, the review recommended replacing the current exemption for networks in some building classes from the Utilities Act 2000 with a new exemption framework, ensuring that customers in an embedded network being served by an authorised retailer would receive similar same price protections to customers in the open market. It also recommended improving information disclosure requirements for embedded networks, including for property transactions and for Unit Plans.
“We acknowledge there is a case for better regulation and consumer protections, and will investigate and implement options for making improvements through the existing framework,” Mr Rattenbury said. “Any required legislative amendments will only be made through extensive consultation with the ACT community and stakeholders.”
The review recommended that the Independent Competition and Regulatory Commission (ICRC) impose a reference price and allowable price adjustments for embedded networks, requiring operators to offer pricing plans that do not surpass the reference price set by the ICRC, and that all price adjustments be lower than the limit set by the ICRC.
The ACT Government does not agree with these recommendations, Mr Rattenbury said. “The existing ACT reference price already applies to the majority of embedded network operators, and we will look to extend this to cover all operators.”
“Some of the recommended reforms are complex and will take time to achieve. We will undertake a thorough investigation of these recommendations and present detailed options for how they are implemented.
“As an immediate first step, we have developed a dedicated web page on the Everyday Climate Choices site to help community members to understand how embedded networks work, the implications for consumers, and how to make sure you are getting a fair price.”
