Access to retailer of choice for Queensland embedded networks ‒ what now?

Embedded network operators and customers in Queensland face further uncertainty about their obligations relating to access to retail competition.

As the Queensland state election has now been called, the Queensland Parliament has been dissolved and all bills that had been introduced but not yet passed have lapsed, including the Electricity (Batteries and Premium Feed-in Tariff) and Other Legislation Amendment Bill 2017 (Qld).

The Bill proposed amendments to the Electricity Act 1994 (Qld) to enable the effective implementation of access to retail competition in Queensland's embedded networks.

The key amendment contained in the Bill was the proposed removal of section 23(2) from the Electricity Act.

The current section 23(2) of the Electricity Act says that:

"…[A] receiver [of electricity] is only a customer if the receiver’s premises has an electrical installation that, to the reasonable satisfaction of the distribution entity whose distribution area includes the premises, is capable of receiving supply directly from a distribution entity’s supply network."

This provision has long been regarded as the barrier to embedded network customers accessing a retailer of choice in Queensland - the receiver of an on-supply of electricity in an embedded network could not be a customer because they did not receive electricity supply directly from a distribution entity network (ie. directly from the Energy Queensland network). This interpretation is supported by explanatory commentary published when section 23(2) of the Electricity Act was first introduced in 2006:

"A receiver will not be a 'customer' and therefore unable to choose their retail supplier unless they first arrange for bypass of the on-supply network"

and also by the Explanatory Notes to the recent Bill:

"Section 23(2) restricts the circumstances in which a receiver will be considered a customer for the purposes of the Electricity Act. Omission of this restriction is needed to ensure consistency with the National Energy Retail Law (Queensland) and to remove the barrier that prevents embedded network customers from cost effectively purchasing electricity from a chosen retailer."

Under the self-executing provisions of the National Electricity Rules (the Embedded Network Rule Change) which commence on 1 December 2017, the rules that relate to Embedded Network Managers come into force. These rules require the appointment of Embedded Network Managers by embedded network owners, controller or operators in certain circumstances and are designed to facilitate the management and transfer of embedded network customers for their retailer of choice. However, the issue in Queensland is that while these network management provisions may soon commence, the uncertainty remains over whether the embedded network customers are in fact the class of customers that are permitted to access retailer of choice.

 What now?

The Australian Energy Regulator has provided a transitional period for the appointment of the Embedded Network Manager until 31 March 2018, provided active steps are being taken to achieve that appointment, and Queensland embedded network owners and operators should take active steps to meet the appointment requirements within this timeframe.

In addition there remains a strong need for Queensland industry to be provided with clarity on the ability of embedded network customers to access retailer of choice post-1 December 2017. 

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