Locality Planning Energy Pty Ltd (LPE) has paid two infringement notices totalling $135,600 issued by the Australian Energy Regulator (AER) for alleged breaches of the National Electricity Law.
LPE is an electricity retailer that services several embedded networks, primarily across Queensland.
The AER alleged LPE breached section 11(2) of the National Electricity Law by owning embedded networks at residential sites on Bribie Island and in Brisbane between 2021 and 11 July 2022, without being registered with the Australian Energy Market Operator or exempted by the AER from the requirement to be registered.
The lack of a relevant registration or exemption meant more than 100 consumers at these sites may not have been afforded the important protections they were entitled to, including protections related to safety, pricing, and access to retail competition.
AER Deputy Chair Justin Oliver said that the AER would continue to monitor and act to protect consumers supplied through embedded networks.
“As we see continued growth in the number of embedded networks across the country, this outcome is a timely reminder to all owners and operators of these sites that they have important obligations to consumers, including ensuring they have the relevant registration or exemption to own and operate these networks.
“Without a registration or exemption, embedded network owners and operators are not required to comply with the essential consumer protections contained in the National Electricity Law and Rules or the AER’s Network Exemption Guideline,” Mr Oliver said.
Network exemptions were subsequently registered for these embedded network sites for LPE on 30 September 2022. The payment of infringement notices by LPE follows enforcement action taken by the AER in 2023 in relation to embedded networks, including instituting proceedings against CAM Engineering and Construction Pty Ltd and accepting a court enforceable undertaking from Trinity Place Investments Pty Ltd.
Notes to Editors
Embedded networks
Embedded networks are private electricity networks that can serve multiple customers.
In most cases, the embedded network owner and/or operator buys energy from an energy retailer and on-sells it to the occupants of the site.
Residential embedded networks include retirement villages, caravan parks and large apartment complexes.
The AER’s role
The AER regulates who can own, operate and/or control embedded networks and on-sell energy within them. We do this through a framework that exempts entities, who sell or supply energy within embedded networks, from aspects of the standard energy framework.
We govern this exemptions framework through our Network Exemption Guideline and Retail Exempt Selling Guideline. These Guidelines impose conditions that are designed to protect customers supplied through embedded networks.
Review of the AER exemptions framework for embedded networks
The AER is currently undertaking a Review of the AER exemptions framework for embedded networks.
The objectives of this review are to:
- better understand the harms, or risk of harms, residential embedded network customers may be facing
- better understand the benefits of residential embedded networks, and the extent to which customers are receiving them
- determine whether action is needed, which could include strengthening regulatory oversight of embedded networks, enhancing reporting arrangements and consumer protections, and restricting the growth of future residential embedded networks.