AER consults on a class ring-fencing waiver for distribution businesses seeking to apply for funding under the Commonwealth Government's Community Batteries for Household Solar Program

The Australian Energy Regulator (AER) is seeking feedback on granting a class waiver under its Electricity distribution ring-fencing guideline that will enable distribution network service providers (DNSPs) to lease batteries funded though the Commonwealth Government’s Community Batteries for Household Solar Program, with conditions.

The consideration of a class waiver follows the Commonwealth Government’s commitment to fund $224.3 million for up to 400 community batteries.

Consultation

We are seeking verbal feedback or written submissions to assist in our decision making.

Our verbal feedback session will be on 13 December 2022, 12.30–1.30 pm (AEDT). To register for the feedback session, please send a request to AERringfencingaer [dot] gov [dot] au (AERringfencing[at]aer[dot]gov[dot]au) by close of business 12 December 2022.

If providing written submissions, we prefer they be publicly available to facilitate an informed and transparent consultative process. We will treat written submissions as public documents unless otherwise requested. Stakeholders should email written submissions to AERringfencingaer [dot] gov [dot] au (AERringfencing[at]aer[dot]gov[dot]au) by close of business 12 January 2023

Timeline

The proposed timing for our consultation and decision is:

• 13 December 2022 – Virtual feedback session
• 12 January 2023 – Submissions close
• 3 February 2023 – AER issues decision and statement of reasons

Background

The AER is the regulator for electricity and gas networks in every state and territory in Australia except Western Australia.

Ring-fencing, in relation to distribution network service providers (DNSPs), refers to the separation of distribution services provided by a DNSP from the provision of unregulated or contestable services by a DNSP, or an affiliated entity.

Ring-fencing operates to separate regulated activities from competitive business activities to support competitive markets. The electricity distribution ring-fencing guideline prevents DNSPs from discriminating in contestable markets in favour of themselves or affiliated entities. It also prevents DNSPs from using revenue earned from regulated services to cross-subsidise unregulated or contestable services.