Australia: Changes to the Electricity Industry Act set to streamline regulation for renewable and alternative energy sellers in Victoria

Recent amendments to the General Exemption Order (GEO)1 made under the Electricity Industry Act 2000 (Vic) (Act) will modify the regulatory framework to reflect market activity, including opening up opportunities for government agencies and community energy projects.

In 2015, the Victorian Government commenced a review of the GEO to examine whether the existing regulatory arrangements – which apply to the small-scale generation, distribution and resale of energy to customers within embedded networks – were adequate.

A key objective of this review was to identify how the GEO could better address alternative energy sellers, innovative purchasing arrangements and precinct scale projects. In its final position paper2, the Department of Environment, Land, Water and Planning (Department) recommended that the GEO:

  • establish registrable categories of exemptions; and
  • separate deemed and registrable exemption categories into specific activities.

The GEO has been redrafted so that it now substantially aligns to the framework applied by the Australian Energy Regulator in other National Electricity Market states.

WHAT DOES THE NEW GEO CONTAIN?

On 15 November 2017, the new GEO was issued by Order in Council.

Section 16 of the Act requires a person who engages in the generation of electricity for supply or sale or the transmission, distribution supply or sale of electricity to hold a licence issued by the Essential Services Commission (ESC) unless otherwise exempt. A failure to comply with this requirement gives rise to significant financial penalties. Section 17 of the Act enables exemptions to be made from the licencing requirements.

Since 2002, the GEO has set out the permissible exemptions. In broad terms, under the revised GEO, the previous exemption of three kinds of activities will continue:

  1. Small scale generation activities
  2. Intermediary distribution and supply of electricity
  3. Intermediary sale of electricity

Individual exemptions may still be obtained. Any entities wishing to operate under a registrable exemption will be required to register their activities on the ESC's Register of Exempt Persons.3 This Register will be publically available on the ESC's website free of charge.

DEEMED AND REGISTRABLE EXEMPTION CATEGORIES UNDER THE AMENDED GEO

The amended GEO has tailored the deemed and registrable exemption categories into different classes based on specific activities.

Each of these categories are further divided into deemed or registrable exemptions as follows:

  1. Retail exemption


    The deemed exemptions apply to a number of retail activities, including:
    • selling metered energy electricity to fewer than 10 small commercial/retail customers within the limits of a site that they own, occupy or operate; and
    • selling metered electricity to occupants of holiday accommodation on a short-term basis.4

  2. Network exemption

    Further deemed exemptions have been created for network activities, including:
    • supplying metered or unmetered electricity to fewer than 10 residential customers within the limits of a site that the supplier owns, occupies or operates;5
    • supplying electricity via plug-in or rack mounted equipment in any premises where there is National Broadband Network equipment with an input current rating not exceeding 3 amps alternating current; and
    • supplying electricity on or within a person's premises in relation to the provision of telecommunication services.

  3. Generation exemption

    A deemed exemption applies for any person generating electricity for supply or sale where the total output is less than 30 MW. This exemption is unchanged from the previous GEO.


  4. Multiple activity exemption

    The multiple activity exemption covers persons who generate or distribute electricity on premises not owned or occupied by the person and that person then supplies or sells that electricity to the owner or occupier of the premises or to the licensed retailer. Such activities must be registered. Specific examples listed in the GEO which may be covered by this exemption include solar power purchase agreements or community energy projects. To qualify under this category the nameplate or installed generating capacity must not exceed 5 MW.

    Although a separate exemption was originally flagged for community-owned renewable energy projects,6 the consultation process found that most of these projects would fall into the current exemption that permitted power purchase agreements. The Department has flagged that they will monitor how the revised GEO operates in relation to community energy projects and may consider further regulation in this area.

    One significant constraint on small scale solar PPAs and community energy is the requirement in paragraph 18 of the GEO that the price at which electricity and related services may be sold or supplied under the exemption must not exceed the relevant maximum price formulated by the ESC. This impacts on arrangements which charge a higher than market rate to enable earlier ownership transfer of a solar installation.

    Finally, the previous constraint under this exemption that the exempt person must not own or occupy the premises from which generation takes place has been refined so that occupation of part of the premises (for example under a lease) is permitted.

EXEMPTIONS FOR GOVERNMENT AGENCIES

Under the amended GEO, Government agencies are deemed exempt from the obligation to hold a licence in respect of the following activities:

  • Retail – government agencies selling metered electricity to non-residential customers
  • Network Services – government agencies supplying metered electricity to non-residential customers

The exemption only applies if the Government agency is providing the metered electricity for a purpose which is ancillary to its primary functions or objectives under the laws under which they are established.

The amended GEO provides that 'Government agency' includes:

  • a Commonwealth, State or Local Government department;
  • a statutory authority or government owned corporations established under a Commonwealth or State or Territory law; and
  • a university, but does not include a housing authority or a provider of student accommodation.

The Government agency exemption provides opportunities for agencies to explore small scale site-specific generation, particularly utilising solar or solar and battery technology. This may have particular relevance for Government agencies with high energy usage, such as water corporations.

As the cost of this technology decreases, this type of generation will become an increasingly important way for government agencies to reduce their electricity costs.

The revised GEO will come into operation on 1 April 2018.7

Footnotes

1 The Order in Council made on 30 April 2002 under s 17 of the Act. The GEO has previously been amended three times, on 25 November 2008, 28 October 2010 and 8 December 2015.

2 See https://www.energy.vic.gov.au/__data/assets/pdf_file/0025/80746/Review-of-the-Electricity-Licence-Exemptions-Framework-Final-Position-Paper.pdf

3 Legislation establishing the Register of Exempt Persons has not yet been proclaimed. See the Energy Legislation Amendment (Feed-in Tariffs and Improving Safety and Markets) Act 2017 (Vic).

4 Note, this does not include supply to residents of retirement villages, caravan parks, holiday parks, residential land lease parks and manufactured home estates.

5 See footnote 4 above.

6 See https://www.energy.vic.gov.au/__data/assets/pdf_file/0027/43578/General-Exemption-Position-Paper.pdf

7 Clause 11 which relates to customer dispute resolution will come into operation on 1 July 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions