New Rule for Embedded Networks

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On 1 December 2017, an amendment to the National Electricity Rules by the Australian Energy Market Commission will take effect, reducing barriers to Embedded Network customers accessing retail competition in the National Electricity Market.

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 NER specific to Embedded Networks that will commence on 1 December 2017. The Rule creates a new Australian Energy Market Operator (AEMO) accredited role called the Embedded Network Manager (ENM) that will be appointed to an Embedded Network. The ENM will have the responsibility of performing the market interface functions that link Embedded Network customers to 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 will not prevent current EENSP’s 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?

An Embedded Network with an On-Market Child MeterThe ENM provides embedded network management services and maintains 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 equires 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?

The appointment of an ENM is a condition of the following 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 appoint an ENM by 1 December 2017, unless they are subject to a non-appointment or reversion entitlement. These conditions will 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.

If you are unsure if you are required to appoint an ENM at your Embedded Network, please Contact Us.

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