The Australian Energy Regulator (AER) has published its Ring-fencing Guideline for electricity distribution, which applies across the National Electricity Market.

The aim of the Guideline is to reduce the risk of anti-competitive behaviour by requiring electricity distributors to functionally and / or legally separate areas of their businesses that deliver contestable services from areas that deliver regulated electricity services.

The Guideline and explanatory statement can be found on the AER’s website.

Compliance Approach

Essential Energy has made a business decision to largely withdraw from the delivery of contestable services. This is because the costs associated with continuing to deliver the remaining small amount of contestable works in compliance with the Guideline was estimated to be much greater than the benefit Essential Energy would receive. As such, Essential Energy has decided to avoid functional and legal separation costs imposed by the Guideline by:

  • requesting the AER to regulate (i.e. set a fee) for some monopoly-type services
  • seeking a waiver from the Ring-fencing obligations for some services; and
  • withdrawing from offering some services.

Download a copy of Essential Energy’s compliance plan

Connections and Connection Alterations

Under the Ring-fencing Guideline, you will need an Accredited Service Provider when you want to:

  • connect your home, business or other premises to the electricity distribution network
  • draw more electricity from the distribution network than is currently available; or
  • extend the network to reach your premises.

The Electricity Supply Act 1995 requires that service providers who undertake customer-funded contestable network connection works must be accredited by the NSW Department of Planning and Environment.

Finding an Accredited Service Provider

An Accredited Service Provider is an individual or an entity accredited in accordance with the Electricity Supply Act 1995 and the Electricity Supply (Safety and Network Management) Regulation 2014.

A list of Accredited Service Providers is maintained by the NSW Department of Planning and Environment. This list, along with its related information, is available on their website or by calling them on (02) 8275 1960.