Embedded Network Manager
All Embedded Network customers have the right to choose their electricity provider.
Since 1 December 2017, all Embedded Networks in the National Electricity Market (NEM) are required to appoint an Embedded Network Manager (ENM) if a customer decides to choose their own electricity provider. The ENM is responsible for creating the National Meter Identifier (NMI) that is used to purchase electricity in the market.
ENM Solutions is an accredited Embedded Network Manager (ENM) with the Australian Energy Market Operator (AEMO). We were one of few participants accredited before 1 December 2017. Our unique offering as an ENM is that we do not offer billing or retail services. This has sparked a substantial amount of interest from those looking for a long-lasting partner to assist with their regulatory compliance. With a purpose-built system to manage the creation and management of On-Market Child Meters and NMIs, and customers throughout the NEM, ENM Solutions is well placed to assist all Embedded Networks that need to appoint an ENM.
What is the new rule?
The Australian Energy Market Commission’s National Electricity Amendment (Embedded Networks) Rule 2015 No.15 (Rule) outlines a series of amendments to the National Electricity Rules (NER) specific to Embedded Networks that commenced on 1 December 2017. The Rule created a new Australian Energy Market Operator (AEMO) accredited role called the Embedded Network Manager (ENM) that must be appointed to an Embedded Network given certain criteria is met.
The ENM has the responsibility of performing the market interface function that links Embedded Network customers to the NEM. Importantly, the ENM will create and maintain a National Meter Identifier (NMI) so that the Embedded Network customer can be identified in the NEM. The amendments will enable Embedded Network customers to:
- Choose the price and structure of their electricity supply,
- Choose from a variety of products and services, and
- Gain easier access to government schemes and consumer protections.
The changes do not prevent current Exempt Embedded Network Service Providers, otherwise known as an EENSP, from continuing to sell electricity to customers. It will, however, increase the requirement on Embedded Networks to provide competitive rates and services in line with the NEM.
What does the Embedded Network Manager do?
The ENM provides embedded network management services and maintains electrical information about the Embedded Network. These services are only performed at a site for which an ENM is appointed.
The embedded network management services include facilitating the market interface for ‘Off-Market’ customers to become ‘On-Market’ and access retail competition. An ‘On-Market’ customer is a customer that purchases electricity from a retailer of their choice from within an Embedded Network, after being allocated a National Meter Identifier (NMI) by the ENM. The NMI enables the address of the customer to be identified in the NEM. Once a customer is ‘On-Market’, they may re-enter the Embedded Network, and become ‘Off-Market’, if they accept an offer from the EENSP.
The ENM acts as the Local Network Service Provider (LNSP) for ‘On-Market’ customers, and, as such, requires site-specific information to be maintained. Information that must be maintained for each Embedded Network includes the type and configuration of metering installations, relevant Embedded Network wiring information, Distribution Loss Factors (DLF), Transmission Node Identity (TNI), and all correspondence with persons. The maintained information will be utilised to support customers that wish to become ‘On-Market’, as well as assisting AEMO with the settlement process.
The ENM’s obligations are set out within AEMO’s Service Level Procedure – Embedded Network Manager.
Do you need to appoint an ENM?
Under the National Electricity Law (NEL) and the National Electricity Rules (NER), any party that engages in the transmission or distribution of electricity must either be registered with the Australian Energy Market Operator (AEMO) as a network service provider (NSP), or gain an exemption from the requirement to be registered from the Australian Energy Regulator (AER).
Obtaining an exemption from the AER requires the EENSP to comply with certain ‘conditions’ pertaining to safety, dispute resolutions, network pricing, metering and retail competition. The extent to which these conditions are applicable is determined by the ‘activity classes’ the site has been registered for (‘Registerable’) or is deemed to be a part of (‘Deemed’). Failure to comply with these conditions is a breach of the NEL and could invalidate the exemption and expose civil penalties.
The appointment of an ENM is a condition of the following ‘applicable activity classes’: ND10, NR1, NR2, NR3, NR5 and NR6.
All existing Embedded Networks that fall into an ‘applicable activity class’ that are equal to or greater than 30 customers, residential or commercial, must have appointed an ENM by 1 December 2017, unless they are subject to a non-appointment or reversion entitlement. These conditions extend to new sites once they commence operation.
For all other classes, the AER has determined that the cost of appointing an ENM will outweigh the benefit.
If an ENM is not appointed at an Embedded Network due to the size or activity class, an ENM will still be required to be appointed if an ‘ENM Trigger Event’ occurs. An ‘ENM Trigger Event’ occurs when an Embedded Network customer, or their chosen retailer, provides notice that the customer wishes to access retail competition; a counter offer by the EENSP is not accepted by the customer; and, the cooling off period for the market retail contract has expired. If all three elements transpire, an ENM must be appointed at the Embedded Network.
How we can help
ENM Solutions is a specialist in Embedded Networks and the Embedded Network Manager function.
If you’re looking to become an accredited ENM, if you need help with the Market Settlement and Transfer Solution (MSATS), or if you want to know how NMI allocation works, we’re here to help. Alternatively, we can fulfill the Embedded Network Manager requirement on your behalf – while you continue to manage your Embedded Network.
We can also help with your billing requirements and the ongoing changes to regulations. From meter reading, invoicing, credit management, reporting, dealing with GST, and many other issues.
Considerations for Embedded Networks
The Rule change represents a substantial impost to Embedded Networks across the NEM. Not only will an ENM have to be appointed at each site, the EENSP will also have to ensure that their offering, through rates and services, are market compatible. It will be important for Embedded Networks to understand:
- Site access for participants,
- Manual meter reading,
- Access to meter data,
- Recovery of network charges,
- Subtraction of energy charges,
- Costs associated with ‘On-Market’ Child Meters, and
- Meter leasing.
For operators of Embedded Networks, the ENM role represents an opportunity to increase revenue by providing additional services to their clients. It will be important to understand the responsibilities and requirements of the ENM before undertaking accreditation for commencement on 1 December 2017.