The Victorian Government is currently undertaking a review of embedded networks, following its election commitment to ban embedded networks in new residential apartment buildings.

The Department of Environment, Land, Water and Planning (DEWLP) recently published its Expert Panel’s Embedded Networks Review Draft Recommendations Report for consultation.

AGL made a formal submission in response, a copy of which is available here.

AGL’s view

AGL is generally supportive of the Draft Report and consider the recommendations will support the Victorian Government’s commitment to improving outcomes for customers living in embedded networks.

To ensure Victorian consumers receive the full benefits of the proposed reforms as soon as possible whilst also supporting the continued development of renewable and clean energy technologies, we believe the Victorian Government should:

• Immediately establish the proposed Local Energy Service licensing framework (LES Framework) to commence by June 2022, rather than progressing amendments to the General Exemption Order (GEO) followed by subsequent legislative reform; and
• Progress a more ambitious transitional timeframe to facilitate the application of the proposed reforms to legacy embedded network customers, requiring that legacy embedded networks transition to the LES Framework by 2024 at the latest.               

We also recommend DEWLP consider the following:

• Extend the application of the LES Framework to small business customers, and consider further the potential for application to commercial, industrial, and business sites.
• Support the implementation of the AEMC Reform Package 1 to ensuring access to retail market competition, including by facilitating improved visibility on MSATS and appropriate B2B arrangements to support on-market retailers providing services to embedded network customers.
• To further advance access to retail market competition, require that all legacy embedded network metering and internal infrastructure be upgraded to market grade by 2024 by mandating that embedded network operators submit upgrade programs to the Essential Services Commission (ESC) for approval.
• In establishing supportive planning and building requirements, require that relevant information also be provided to body corporate managers to support their ongoing engagement with owners.
• Clearly define bundled services as applying to electricity and gas services only, to avoid duplication and regulatory complexity in the provision of these services.
• Establish provider of last resort arrangements to reflect the established retailer of last resort arrangements and consider further financial and information disclosure safeguards to deal with circumstances of financial failure/ insolvency.
• Leverage existing consumer representative expertise to develop insights in the experience of private network consumers to inform policy and regulatory change into the future.