August 21, 2019

Business Services

WHO NEEDS TO READ THIS? 

CARAVAN PARK OPERATORS, BODY CORPORATE MANAGERS, MARINAS, TRANSPORTABLE HOME PARK, RETIREMENT LIVING OPERATORS & PROFESSIONALS ADVISING THESE BUSINESSES. 

Since 2012 business such as caravan parks, holiday rentals or marinas (and others) that supply an electricity connection and/or on-sell electricity to their customers have been required to either comply with the requirements of the Electricity Law and Retail Law, or ensure that their business holds an exemption.

The AEMC has recently made changes to its Guidelines and proposed changes to the Frameworks. These changes are likely to impact on your business to some degree and you should make sure that you are aware of how the changes will affect your business.

What are the laws? 

Please follow this link to see our previous article about on-selling electricity under the Electricity Law and Retail Law. 

Guide 

There are many terms used in this article that may be confusing. Please follow this link to see a table of definitions.

Choice or retailer.

Non-exempt businesses must now inform customers that they have an option to choose their electricity energy provider. This is regardless of whether your business operates an Embedded Network or not.

Although it may not be cost or time effective for customers to choose their own energy provider, they must be afforded the choice. 

Fewer exemptions

The AEMC has proposed to significantly reduce the number of parties eligible for exemptions by proposing that:

  • ENSP’s will be required to register with AEMO and will be subject to many of the existing regulatory requirements placed on ENSP’s.
  • Off-market Retailers will be required to obtain an authorisation from the AER and will be subject to most of the requirements that existing authorised retailers are subject to.
  • Individual Exemptions may only be granted where the AER is satisfied that special circumstances warrant the grant of an exemption and customer-focused conditions will be imposed.

More red tape!

Some (but not all) of the proposed additional requirements to be met by non-exempt businesses include:

  • comply with rules regarding charges and recovery of costs;
  • develop complaints and dispute resolution procedures;
  • offer customers a payment plan where they have experienced financial difficulty while not charging the customer late payment fees or a security deposit;
  • not disconnect customers for failure to pay electricity bills until they have provided sufficient and significant warning notices to the customer;
  • notify each affected customer before any planned interruptions to electricity supply and immediately notify customers after confirmation of any unplanned interruptions to electrical supply; and
  • not refuse to sell energy to a customer where the customer owes money to a business.

The transition.

There are still a number of legislative processes to be completed before the Frameworks proposed by the AEMC can be implemented. 

Under the proposed transitional arrangements, businesses that currently hold Deemed Exemptions or Individual Exemptions will initially retain their exemptions. However depending on the age of the Embedded Network:

  • exemptions may be fully ‘grandfathered’;
  • may be subject to a transitional period; and/or
  • works undertaken on an Embedded Network after relevant dates may affect an existing exemption.

Below is our easy guide to transitional arrangements for common exemptions that businesses such as caravan parks, marinas and holiday rentals often qualify for.

CLASS

DATE NETWORK ESTABLISHED OR MODIFIED

 

 

Prior to 1 Dec. 2017

 

1 Dec 2017 - 31 Dec 2019

1 Jan 2020 - Effective date

From Effective Date 

Deemed Exemption 3

Grandfathered and subject to framework under legacy retail exemption.

Grandfathered and subject to framework under legacy retail exemption.

Grandfathered and subject to framework under legacy retail exemption.

Registrable exemption

Registrable Exemption 1

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 2 years after the Effective Date.

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 2 years after the Effective Date.

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 9 months after the Effective Date.

Authorisation as a retailer required (off-market).

Registrable Exemption 6

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 2 years after the Effective Date.

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 2 years after the Effective Date.

Exempt sellers in these networks must obtain authorisation as off-market sellers by no later than 9 months after the Effective Date.

Authorisation as a retailer required (off-market).

Don’t get zapped by doing NOTHING

The laws and the proposed Frameworks can be confusing and your business may or may not fit within one of the proposed Deemed Exemptions.

If your business doesn’t qualify for a Deemed Exemption then it may be faced with significant costs in order to comply with the AEMC’s proposed changes. Of course, if your business doesn’t comply where required, you will run the risk of being fined.

You should contact Tim Smith on (07 3231 0628 or by email to tsmith@mcw.com.au) as soon as possible to discuss what your business needs to do to comply or whether your business qualifies for an exemption.