Victorian Embedded Networks Review

In October 2018, the Victorian Government announced an election commitment to ban embedded networks in new residential apartment buildings, with appropriate exemptions for buildings that use renewable energy microgrids to deliver low-cost renewable energy to apartment buildings. 

The Government’s election commitment to ban embedded networks in new residential apartment buildings was made in response to ongoing concerns that customers living in embedded networks pay higher prices and do not have access to the same level of customer protections as those who live outside of embedded networks. 

An Expert Panel (Panel) leading an Embedded Networks Review (Review) is developing recommendations to Government on how best to implement the ban. The Panel is also tasked with providing recommendations to government on how to ensure that, to the fullest extent practicable, embedded network customers in existing residential settings can access the same competitive retail offers and consumer protections as on-market customers.

AGL recently responded to the Panel’s Issues Paper.

AGL’s view

AGL supports the Victorian Government’s commitment to improving outcomes for customers living in embedded networks.

We believe the most appropriate approach to fulfilling the Victoria’s Government’s policy intent (i.e. reduce energy costs for consumers in embedded networks) is to proceed with implementing the Australian Energy Market Commission’s (AEMC) Reform Package that was recommended in 2019. 

We consider the AEMC Reform Package provides a range of improvements to address the core issues of the Victorian review, including customer protections, access to competition and information disclosure.

Implementing a ban through an alternative framework would entail substantial legislative and regulatory complexity, given the need to establish equivalent outcomes whilst accommodating existing physical embedded networks arrangements. A Victorian framework that is not aligned with the AEMC Reform Package also risks imposing increasing regulatory and compliance cost on industry and in turn embedded network consumers.

We elaborate our views and provide key recommendations in our formal submission, a copy of which is available here.