The AER has received from CitiPower and Powercor an application for a waiver from the Electricity Distribution Ring-Fencing Guideline (Guideline) for a range of activities, including services that may be reclassified, continued use of existing branding and continued use of their joint operating model.
The Guideline requires each NEM distribution business to separate the regulated part from the contestable part of its business. The Guideline is currently in its implementation stage, with all distribution businesses asked to assess their current ability to comply and submit any necessary waiver applications before full compliance is mandatory, from 1 January 2018.
There are four parts to this waiver application. The first is about service classification. Whether the Guideline applies to a distribution business’ services depends on how its services are classified. CitiPower and Powercor are seeking a waiver for a range of services that they consider likely to be reclassified in the future. The waiver, if accepted, would result in ring-fencing obligations as if the proposed new classification was already in place.
The second and third parts of the waiver are about branding. The Guideline places an obligation on a distribution business to have branding that is independent and separate from a related electricity business. The distribution business must also not advertise or promote either that affiliate’s services or its own services with the affiliate’s. CitiPower and Powercor are seeking waivers to allow them to continue to use their brands in certain circumstances.
The fourth part of the application relates to CitiPower and Powercor’s joint operating model. The Guideline requires the two distribution businesses to operate separately regardless of whether they both provide only regulated services. CitiPower and Powercor have asked the AER to issue a letter confirming we will take no action in this instance or else amend the Guideline so their joint operating model will no longer be prohibited.
The AER is seeking submissions on the above issues before issuing a draft decision on whether to grant the waiver. CitiPower and Powercor’s application is available on our website.
Invitation for submissions
We invite interested parties to make submissions on the CitiPower/Powercor application by Wednesday 21 June 2017.
Submissions should be emailed Attention: "Chris Pattas, General Manager, Networks" at: ringfencing
aer [dot] gov [dot] au (ringfencing[at]aer[dot]gov[dot]au).
Alternatively, written submissions can also be sent to:
Mr Chris Pattas
General Manager, Networks
Australian Energy Regulator
GPO Box 520
Melbourne, VIC 3001
Submissions will be treated as public documents unless otherwise requested. The AER prefers that all submissions be sent in an electronic format in Microsoft Word or other text readable document form and be publicly available to facilitate an informed and transparent consultative process.