Electricity is an essential service and contributes significantly to the wellbeing and welfare of Victorians. Consumers should expect to receive electricity under fair terms and conditions, including protections regarding billing, disconnections and quality of supply. Consumers should also be able to benefit from the competitive electricity market through efficient prices and innovative products.

Suppliers of electricity are licensed by the Essential Services Commission under the Electricity Industry Act 2000 (the Act). As part of their licence, energy providers must comply with obligations under the Act.

In some limited cases, an energy supplier can operate under an exemption from the requirement to hold a licence.

Examples of activities that may be exempt from the requirement to hold a licence include:

  • Caravan parks, residential homes, multiple tenancy developments, shopping centres and holiday accommodation.
  • Solar power purchase arrangements, where a business provides, installs and maintains, at no initial cost, a solar panel system to a customer and in exchange, the customer buys the energy provided by the solar panels for an agreed price and for an agreed period.
  • Community energy projects, where the activities occur are limited to one site and do not cross property boundaries.

The generation of electricity in certain circumstances is also exempt from the licensing requirements, for example, where a customer is generating electricity for their own use through solar panels, with excess energy being sold to their licensed retailer.

The activities that are exempt from the requirement to hold a licence and the applicable conditions is set out in the General Exemption Order 2017:

The General Exemption Order has been amended twice:

  • on 30 May 2019, to freeze the applicable transitional maximum price at the local retailer standing offer rates that were in effect prior to the introduction of the Victorian Default Offer, while the Essential Services Commission reviews pricing in embedded networks, and
  • on 9 July 2019, to make amendments to further clarify the transitional maximum price.

A consolidated version of the General Exemption Order, incorporating these amendments, is available here.

Under the General Exemption Order, until the Essential Services Commission formulates a new maximum price, the maximum prices exempt retailers may charge are currently fixed at the local retailer standing offer tariffs that were in effect at 27 May 2019. These can be found here: AGL, EnergyAustralia, Origin.  The Essential Services Commission is undertaking a review of pricing arrangements in embedded networks, and will formulate a new maximum price for embedded network customers by 1 July 2020. For more information on electricity pricing in embedded networks, please see ‘Tips for Customers in embedded networks’ at https://www.energy.vic.gov.au/victoriandefaultoffer.

The Essential Services Commission is responsible for the registration database that most exemption holders must register on, specifying the consumer protections that apply to exemptions, and setting the maximum price that a customer can be charged.

Further information is available on the Essential Services Commission’s website at http://www.esc.vic.gov.au/energy-licensing-and-exemptions.

Fact sheets – Embedded networks

The Department of Environment, Land, Water and Planning has prepared information on the regulatory arrangements for embedded electricity and gas networks.

Review of the General Exemption Order

The Department of Environment, Land, Water and Planning undertook a review of the General Exemption Order to determine if it was meeting the needs of consumers and embedded networks. The review was informed by stakeholder consultation, including submissions on an issues paper and draft position paper and stakeholder workshops. The Department’s final position was published in August 2017.

Page last updated: 11/07/19