Update: What landlords and owners of embedded networks need to know about changes to selling electricity to tenants or residents

Does your business provide ‘Alternative Electricity Services’ in Western Australia? If so, you might soon be required to comply with a new regulatory regime.

What's changing?

The Electricity Industry Amendment (Alternative Electricity Services) Bill 2023 currently before the Parliament of Western Australia proposes to require providers of Alternative Electricity Services to register and comply with consumer protection obligations.

Does this affect my business??

The changes might affect your business if you provide ‘Alternative Electricity Services’. The exact services that will initially be covered have not yet been decided, and it is intended that the services caught will expand over time. However, you may be caught if you answer yes to any of the following:

• Do you sell electricity in an embedded electricity network? For example:

1. Selling electricity to residential tenants in an apartment building?
2. Selling electricity to commercial tenants in a shopping centre or office building? ?
3. Selling electricity to residents in a retirement village? ?

• Do you provide solar-for-hire, behind-the meter generation, or electricity storage services? ?
• Are you currently exempt from the requirement to hold an electricity retail licence?

Why are there new regulations??

New technologies and the rise of distributed energy resources have seen the emergence of many innovative business models for selling electricity and providing electricity-related services. Many of these new models fall outside of the current electricity retail licensing regime in the Electricity Industry Act 2004 or operate under exemptions granted via the Electricity Industry Exemption Order 2005. Customers of these new business models therefore do not receive the consumer protection benefits of the licensing regime – the new regulations propose to fix this.

What are the new requirements?

The exact requirements have not yet been finalised as the Bill is before parliament and draft regulations are not yet available.

However, the outline proposal includes:

• Registration:?Alternative Electricity Service providers will be required to register. ?
• Enforcement:?It is expected that penalties will apply to Alternative Electricity Service providers who fail to register on time, and that Alternative Electricity Services will be subject to the Energy and Water Ombudsman scheme.
• Code of Practice:?Registered providers will be subject to an Alternative Electricity Service Code of Practice. This mandatory Code of Practice is not yet available, but will likely be based on the draft Voluntary Embedded Networks Code of Practice available on Energy Policy WA’s website here, which includes:

1. A requirement for a written supply agreement with the tenant / resident.
2. Information transparency requirements, including regarding tariffs, fees and charges.
3. A prohibition on unreasonably withholding electricity.
4. A requirement for written notices for variations in charges.
5. Billing and metering requirements.
6. Price regulation requirements including default flat rate tariffs.
7. Mandatory family violence and hardship policies.
8. Obligations relating to disconnection, interruption, reconnection, dispute resolution and complaints handling similar to those that already apply to licensed retailers.
9. Reasonable assistance with access to electricity from renewable sources.

When is this happening?

The framework is expected to come into force in early 2025, with enforcement to commence by mid-2025.

How do I learn more?

If you’d like to know more about the changes, how they might affect your business, how your contracts need to change, and how you can prepare for compliance, please reach out to our team.