"Retailer of Choice" reform now powered on in Queensland!

Following the assent of the Electricity and Other Legislation (Batteries and Feed-in Tariff) Amendment Act 2018 on 28 September 2018, customers within an embedded network can now purchase electricity from a retailer of their choice, increasing availability of competitive electricity supply in embedded electricity networks in Queensland.

In addition to increasing competition of electricity supply in embedded networks, amendments have been made to the Electricity Act 1994 (Qld), the Energy and Water Ombudsman Act 2006 (Qld) and the National Energy Retail Law (Queensland) Act 2014 (Qld) with the purpose of:

• prescribing circumstances in which recipients will lose their feed-in tariff under the Solar Bonus Scheme; and
• removing the non-reversion policy as it relates to former Ergon Retail regional small customers.

Embedded networks

Customers ordinarily purchase electricity directly from authorised energy retailers. In certain cases, a site (eg. shopping centres, retirement villages or apartment complexes) may be physically wired in a way where the site owner distributes electricity to multiple premises via a "parent" connection point to the external electricity market. The electricity network at the site is called an embedded network. The embedded network owner/operator can on-sell the electricity to the different premises within their site (eg. to commercial tenants or residential tenants) provided that it holds the necessary exemptions.

In Queensland, those electricity consumers within an embedded network have previously had the only option of purchasing electricity from the embedded network owner/operator. Specifically, in Queensland, customers were previously restricted from accessing offers made by electricity retailers unless there was a direct connection to the electricity distribution network. This was a result of the way in which these embedded consumers were defined in the Electricity Act where they were defined to be receivers and not customers (to whom the retail competition applied). This meant that consumers within embedded networks where the only connection to the external network was via the embedded network "parent" connection, have been unable to choose their own electricity retailer.

Removing the Qld Roadblock

With effect from 1 December 2017, the National Electricity Rules were amended by the "Embedded Networks Rule" (ENR) to increase retail competition in embedded networks. Whilst this was passed as law in Queensland, the jurisdictional block remained in the Queensland Electricity Act and needed to be removed in order for competition to be available in embedded networks in Queensland.

The Act does this by omitting section 23(2) of the Electricity Act 1994 (Qld). Section 23(2) currently limits who can buy electricity from authorised retailers to those "capable of receiving supply directly from a distribution entity's supply network". Removing this limitation removes the restriction on embedded network customers which has prevented them from contracting with their retailer of choice.

Customers within embedded networks will now be able to receive electricity from their retailer of choice via the "child" connection point. Customers that chose their supply from an electricity retailer and not from the embedded network owner/operator may receive an energy bill from their retailer and a network bill from their embedded network owner/operator who is responsible for the total network connection and access for the parent connection.  

Small customers' ability to access dispute resolution services

The Act amends the Energy and Water Ombudsman Act 2006 (Qld) in a way that now provides small customers who are located within an embedded network and purchasing electricity from a Retailer of their choice to access the dispute resolution services of the Queensland Energy and Water Ombudsman. Previously, consumers of electricity within an embedded network were excluded from accessing the dispute resolution services of the Queensland Energy and Water Ombudsman.

It is worth noting that:

• In Queensland the small customer consumption must be less than 100MW per annum, whereas in other jurisdictions such as South Australia, a small customer must have a consumption of less than 160 MW per annum. To maintain a uniform National Energy Customer Framework, the Energy and Water Ombudsman Act 2006 in Queensland applies the dispute resolution services of the Queensland Energy and Water Ombudsman to the sector of large commercial customers that fall within the 100MW per annum to 160MW per annum consumption band.
• In circumstances where small Queensland customers or those large Queensland customers with consumption between 100MW per annum and 160 MW per annum are purchasing electricity from an on-supplier then they are excluded from accessing the dispute resolution services of the Queensland Energy and Water Ombudsman.

Solar Bonus Scheme

Amendments to the Electricity Act 1994 (Qld) prescribe three circumstances in which recipients will lose their eligibility to receive the 44c/kWh feed-in tariff under the Queensland Government's Solar Bonus Scheme. The tariff was available to small customers who export excess electricity (beyond their normal consumption), created by their Scheme-qualifying generator, into the grid.

The tariff will not apply to customers who either:

• add additional generation capacity causing the total to exceed the inverter rated output, including by way of replacement;
• install storage devices which either supply electricity at the same time as the Scheme-qualifying generator or export electricity to the grid; or
• install additional generators which either supply electricity at the same time as the Scheme-qualifying generator or export electricity to the grid.

These changes take effect from 15 February 2018.

Non-reversion policy

The Act amends the National Energy Retail Law (Queensland) Act 2014 (Qld) to remove the non-reversion policy as it relates to small customers. Regional residential and small business customers where the property had changed to a private retailer from the government-owned Ergon Retail will now be able to revert back to Ergon if they wish and thereby accessing the Ergon retail set tariffs. The Parliament also made amendments, prior to the assent, that prevent retailers from charging any new types of fees and charges under standing offers for small customers in South East Queensland within four years of deregulation (until 30 June 2020).

Next steps

For owners and operators of embedded networks in Queensland, it is time to prepare for customers seeking to move to a retailer of their choice. Competition for consumers in embedded networks in Queensland will become available for the first time in Queensland, allowing retailers to seek to access consumers currently unavailable to them.

For consumers in embedded electricity networks in Queensland, it is time to assess the available range of suppliers. In doing so they should ensure that they carefully review the terms of supply offered to them and ensure that they are comparing the electricity offers properly and in particular ensuring they are correctly comparing the energy and network components.

Related Insights

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