Embedded Networks – Power of Choice Update
Late last year we wrote about the imminent changes to how embedded networks are proposed to be regulated which can be reviewed here. To recap, the changes are relevant to Bodies Corporate located in QLD who operate an embedded electricity network. For example – The Body Corporate purchases electricity in bulk and then on-sell to individual unit occupants.
What has changed and what do Bodies Corporate need to do?
Legislative Changes in Queensland
Our regulatory partners Compliance Quarter have advised that on 15 February 2018, the Electricity and Other Legislation (Batteries and Premium Feed-in Tariff) Amendment Bill 2018 was re-introduced to the Queensland Parliament following the lapse of the 2017 bill. The result was to refer the bill to the State Development, Natural Resources and Agricultural Industry Development Committee with a response due last week. Provided the Committee does not identify any areas of concern such as proposed changes that may have unintended consequences or can be improved, the bill will likely become law upon the next reading scheduled for the next sitting of parliament from 20 to 22 March 2018 and be given Royal Assent.
The key area of change for embedded networks within the bill is the removal of s23(2) from the Electricity Act which states:
“[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”.
Upon removal of this section, it will allow residents in QLD embedded networks to make their own choice about who they want to supply their electricity.
The QLD government has already published information for stakeholders on how to proceed with changing retailers before the legislation is amended which may be found here:
https://www.dews.qld.gov.au/electricity/embedded-networks
The pertinent point made in this information issued by the QLD government is that an Embedded Network Manager must be appointed by 31 March 2018, in conflict with the current QLD law. None the less, these are the facts to date.
Still following? Now for the part explaining what your Body Corporate needs to do:
Embedded Network Manager (ENM) Appointment
We previously wrote about how you may have already received a notice from your billing agent, strata manager or one of the newly accredited Embedded Network Manager service providers urging you to sign an agreement for their services. Now is the time for an appointment of an ENM to be made in readiness for the pending legislative changes or 31 March 2018, whichever comes first (or last depending on your view point).
But first – a recap on what the ENM is for. The ENM is a position that has been created to process customers switching between electricity suppliers from the Body Corporate to authorised retailers and back if they choose to return.
The Embedded Network Manager’s role may only be completed once the service provider is accredited to do so as the duties are technical processes involving the management of transactions on the electricity market system.
There are 2 key areas that must be completed for the embedded network operator (The Body Corporate) in readiness for any customers choosing to switch electricity suppliers. These key areas are the preparation of a Wiring Diagram and Meter Register to the required standards which must be in place to process supplier change requests within 2 days of notice. For more information on these regulatory requirements, please contact either your ENM or our office for a detailed explanation.
Action Required by 31 March 2018 – According to QLD Government Publications
Carefully review any ENM service agreement offered to your Body Corporate and do not be pressured with looming deadlines into signing up for services or extending current services such as strata management or billing services rolled into a single agreement. Extended original or unrelated service agreement terms in addition to the ENM service should be considered as a separate matter and certainly not a requirement by 31 March 2018.
The Body Corporate should also seek advice about approval requirements before signing any new agreements terms as the service providers may not consider what you need to do on your side to act with authority.
Note: Agreements for more than 1 year are classified as a service contract under the Body Corporate and Community Management Act meaning that Committees do not hold authority to enter into the agreement without a General Meeting Resolution first. A shorter term agreement (less than 1 year) is not a restricted matter allowing the Committee to approve the service subject to cost consideration.
Lastly, you will need to check that the service provider is accredited to provide the ENM service. A register of accredited ENM’s can be found here:
If you have not been approached by a provider yet to fulfil your ENM requirements, we suggest you make contact and seek a proposal from a provider available from the above list.
This Article was contributed by Adam Ford of ARC Utilities Management.
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What can be done if your Committee has entered into an agreement for more than one year and it has not been put to the owners at an AGM for approval?
Hi Rosemarie, Unfortunately you have a dispute when a decision is made without authority to do so. The first step is to notify the committee of your view and establish their position on how they propose to remedy any non compliance matters. You may wish to seek advice depending on the outcome from the office of the commissioner via their Information Service Team on 1800 060 119 or if you require a written response contact them via: http://www.qld.gov.au/bodycorporatequestion .
All the best