Date: 3 August 2011

Author: Verity Watson Contact: 8846 9856

Executive summary

Victoria is targeting implementation of the National Energy Customer Framework (NECF) on 1 July 2012 in line with the Ministerial Council on Energy's proposal.

In order to manage a smooth transition and ensure that customers are not disadvantaged, the Department of Primary Industries (DPI) has reviewed the existing Victorian regulatory framework against the proposed national framework. For the purposes of this paper any Victorian specific regulation that is still required will be collectively referred to as the Victorian Energy Regulatory Rules (VERR). Victorian regulatory policy is expected to work alongside the national frameworks for energy regulation.

United Energy and Multinet (the businesses) are supportive of an approach that provides a well-balanced and clear regulatory environment. In line with this approach the businesses have made a number of drafting suggestions which we believe provide clarity in the arrangements for dealings with customers or retailers or provide/continue current protections for customers. In addition, there are aspects of the Victorian regulatory framework that go to the effective and efficient industry participant relationships. The businesses have addressed such matters for the instruments included in the DPI review only. The businesses expect that DPI will provide an opportunity to provide comments on the remaining instruments at a later date.

1 Introduction

United Energy and Multinet (the businesses) welcome the opportunity to comment on the DPI Discussion Paper - Victoria Specific Regulatory requirements under the National Energy Customer Framework.

Victoria is targeting implementation of the National Energy Customer Framework on 1 July 2012 in line with the Ministerial Council on Energy's proposal.

In order to manage a smooth transition and ensure that customers are not disadvantaged, DPI has reviewed the existing Victorian regulatory framework against the proposed national framework. For the purposes of this paper any Victorian specific regulation that is still required will be collectively referred to as the Victorian Energy Regulatory Rules (VERR). Victorian regulatory policy is expected to work alongside the national frameworks for energy regulation.

The DPI review covers relevant legislation and regulation, including:

  • The Electricity Industry Act 2000 and Gas Industry Act 2001;
  • Essential Services Commission ("ESC") codes:
    • Energy Retail Code;
    • Electricity Distribution Code;
    • Gas Distribution System Code;
    • Electricity Customer Metering Code;
    • Energy Marketing Code of Conduct;
    • Public Lighting Code; and
  • ESC regulatory guidelines.

The Discussion Paper states that the following were specifically not covered:

  • Electricity System Code; and
  • Guideline 18- Augmentation and Land Access.

In addition to the above, the businesses note that there is no policy indication of remaining clauses regarding distributor licences or the use of system agreement. For example, the recent smart metering and Premium Feed in Tariff (PFIT) use of system agreement amendments are not included in this table.  The businesses expect that these remaining instruments will be part of a further consultation.

Our response to key aspects of the regulatory framework or approach are below. The businesses detailed comments on the drafting of the VERR and proposed additions and deletions are provided as blue text in the DPI tables.

2 DPI Approach

In considering whether Victorian specific regulation is required to ensure a smooth transition for Victorian consumers, DPI reviewed both distribution and retail regulation;

  • To ensure that small customers are sufficiently protected when entering contracts with their existing or new retailer and that necessary protections continue;
  • To ensure that all customers receive no diminution in quality or reliability of supply; and
  • To ensure that the economic regulation of services in Victoria is robust.

The businesses are supportive of an approach that provides a well-balanced and clear regulatory environment. In line with this approach the businesses have made a number of drafting suggestions which we believe provide clarity in the arrangements for dealings with customers or retailers or provide/continue current protections for customers. In addition, there are aspects of the Victorian regulatory framework that go to the effective and efficient industry participant relationships. We have addressed such matters for the instruments included in the DPI review only. We expect that DPI will provide an opportunity to provide comments on the remaining instruments at a later date.

3 Legislation

The Discussion Paper states that most of Part 2 of the Electricity Industry Act (EIA) could be repealed in light of NECF with the following exceptions:

  • Division 2 - Price regulation. This provides for a 'reserve' retail pricing power should a review of the Victorian retail market show that competition is not effective.
  • Division 2A - Special pricing regime for the development of clean energy. This regime provides for cost recovery for specified clean energy projects. This may be retained as a State development prerogative.
  • Divisions 3 & 4 - Licences. These provisions will cease to apply to retailers, while the feasibility of removing this Division entirely has been discussed in DPI's previous Discussion Paper on this topic.
  • Division 5A - the "Feed-in Tariff" regimes. This is an important State government policy area, and this division will be retained and the Essential Services Commission's (ESC) functions preserved in the transitional period.
  • Division 6A - Advanced metering infrastructure. This division is critical to underpin the advanced metering roll-out, and will be preserved.

The businesses suggest the following:

  • DPI refer to maintaining some reserve pricing powers from Division 2. The businesses seek clarity that DPI also intend that section 15A be maintained for the AMI remote services which are currently regulated under this section and Guideline 14. This section needs to be preserved until 31 December 2015.
  • Division 5A - the Feed in Tariffs, will need some drafting amendments to cater for retailer authorisations and distribution licences. In this redrafting exercise it would be useful if Division 5A was simplified to provide continuation of the qualifying credit at the premise after the scheme capacity date is reached despite customer or retailer churn at the premise. The businesses understand that this is in line with the policy approach sought that once a premise has qualified it is able to continue to receive the credit without the licensee requesting the credit be re-established.
  • The businesses seek further clarity on the intentions of the DPI in relation to 'minimal change' proposed for the ESC Act. The economic regulator for the businesses is the Australian Energy Regulator (AER) and the distribution and retail regulation under NECF is being handed over to the Australian Energy Market Commission (AEMC) as the rule maker. It is not clear what the role of the ESC will be in the new Victorian regulatory framework.
  • In addition there are a number of Orders in Councils authorised under the Acts, it would be useful to clarify whether these will remain. In light of the Advanced Metering Infrastructure division remaining, the relevant Orders would also remain. For other Orders the continuity of these arrangements is less clear. Examples include the Exemption Orders where exempt network operators need to comply with Distribution Codes in the same manner as a licensed distributor. This will include exempt network operators managing embedded generator technical matters in the same manner as a licenced network. These provisions may be useful moving forward and link obligations in metering or distribution codes to exempt operators as they would not be bound by either NECF or National Energy Rules (NER) equivalent arrangements. The businesses note that the AER is also consulting in this area at the time of writing this response.

4 Amendment or Change Process of the VERR

The new regulatory environment should require the new regulatory body who administers the instrument to adhere to a robust change process involving at least the following characteristics:

  • Clarity of the proposed changes and the reasons why the amendments are required;
  • Open consultation with notification of the consultation to affected parties so that they have a reasonable opportunity to respond;
  • A requirement that the new body take those representations into account and give reasons for its decisions;
  • The date of an amended instrument must not be earlier than that agreed with the affected parties; and
  • The regulatory body should publish and notify the interested parties of the amended VERR.

The businesses note that the VERR is a collective term and the proposed Victorian clauses could be included in Acts, Orders, Rules or regulations. The businesses would be concerned if some of these arrangements were not able to be changed readily as industry or stakeholders might require. This is particularly the case for smart metering where regulations may need to change based on new services. The businesses welcome the opportunity to partiCipate in further consultation or discussion with DPI on these matters.

5 Clarity of Hierarchy of VERR

The VERR needs to provide clarity on which clauses take precedence over others.

There are instances where the VERR needs to take precedence over the National Energy Retail Rules (NERR) requirements or the NER requirements. These arrangements need to be clearly identified in the VERR so a general user of the documentation can understand the hierarchy of related clause obligations without needing to review Application Act clauses (even if, legally, some authorising provision is also required in an Application Act). The VERR needs to be established as an instrument that is clearly in addition to the NERR or NER and hence the Application Act will need to specifically seek to overwrite these other instruments for the intended inconsistency (or addition) to prevail.

6 Drafting Comments on the VERR

The businesses have replicated the tables from the Discussion Paper in this response. Where the businesses have made comments on the title of the table, the application of the ESC Code to industry stakeholders other than distributors etc or comments on additional obligations or redundant obligations, these comments are in blue text.

7 Drafting Comments on the VERR

Table 1 Contracting customers - fair contract terms
Issue Regulatory instrument Reference Regulation to be preserved
Retail fees and charges on standing offer contracts Energy Retail Code 7.5(b) Prohibiting retailers lor imposing lees and charges for merchant service fees (credit card fees) on customers on standing offer contracts
  Energy Retail Code 30 Prescribing that the fees and charges which are allowed to be charged for standing offer contracts are only those explicitly allowed for under the NERR
Late payment fees Electricity and Gas Industry Acts 40C EIA and 4BB GIA Proscribing application of late payment fees to small customers.
Gas billing cycle for customers on standing offer contracts Energy Retail Code 3.1

Retaining the two month billing cycle for gas customers on standing I contracts until 31 December 2013

The businesses note that Section 3.2.2 of the Discussion Paper proposes that the existing billing cycles are preserved until 31 Dec 2014. The businesses seek confirmation from DPI on which is the correct date.

Gas billing cycles are generally linked to meter reading cycles which are managed by distributors. The businesses are not clear on the policy rationale to remove the minimum billing cycle for gas and the reason for the date.

Subject to Victorian Government policy, by the end of 2013 all small customers will have daily meter reads for electricity and hence gas and electricity billing could be monthly to customers. The removal I of this requirement in a standing offer could reduce customer protections.

If there were a requirement back on distributors to move to monthly gas meter reading then this would significantly increase meter read costs for gas customers. The option to change reading cycles will introduce a loss of productivity in the field as the meter reader has to go to the same area, cover the same distance but read less meters.

Bulk hot water billing Energy Retail Code 3.2 Retaining the formula for billing customers for bulk hot water
Table 2 Transferring customers
Issue Regulatory instrument Reference Regulation to be preserved
Victorian NMI standing data requirements Electricity Customer Transfer Code 3.1

Retaining jurisdictional requirements for data to facilitate efficient customer transfers in the market through AEMO

The NER CI3.13.12 requires there to be a jurisdictional standing data schedule and lists a number of requirements.

The schedule in the ECTC places an obligation on the distributor to provide all data. Yet the distributor may not be the appropriate party to provide such data. The NER recognises that the jurisdictional NMI standing data schedule needs to specify the suppliers of the data. If the clause remains, there is an opportunity to make the jurisdictional requirements consistent with the CATS obligations in this area. In CATS, the MPB provides the meter installation type code, the meter serial number, the register ID etc. This is particularly the case where the LNSP is not the responsible person and undertaking the metering.

In addition the ECTC applies to exempt retailers and exempt networks who may be acting as distributor, metering provider, responsible person etc. It would be useful to clarify whether these exempt parties need to provide the NMI standing data within embedded networks. The AER guidelines are silent on whether these exempt parties have a role of facilitating competition and NMI discovery in this respect. Clarification of obligations in this area would be useful as the CATS procedures are inconsistent with the required operating practice. The CATS procedures require the embedded network local retailer (ENLR) to create and maintain the NMI standing data as the exempt network is not registered. Further the CATS procedures require the licensed network to be the LNSP role in CATS as the exempt network is exempt from meeting these requirements. In practice the licenced network is managing the NMI and NMI standing data for the exempt network and not the ENLR.

As NECF may extend the NMI J standing data requirements for smart meters for example, it would be useful to provide this clarity.

Note the term distributor in relation to . the ECTC includes the licenced network and exempt networks.

NMI Discovery Search Electricity Customer Transfer Code 3.2 Clause 3.2 requires that retailers can only make one request from a distributor for a N M I at a ti me and must check in MSATS first. These same protections for distributors do not exist under NECF/NER. Without these clauses any abuse of manual support in this area will increase distributor's costs and ultimately the costs to customers.
Estimated read transfers Electricity Customer Transfer Code 4.2 (e)

The business is not aware that the ESC has notified that the estimated read start date has occurred. Transfers should be occurring on an actual read.

The ECTC , clause 4.2 (e) requires a proposed new retailer to explain the implication of transferring on an estimated read to the customer.

As a general principle under the National Measurement Act, all financial transactions in the N EM should where possible be based on a meter reading. We are unclear how this protection is retained for the benefit of consumers in relation to the normal transfer process Dr in relation to transfers on a trade sale/strategic retailer exit.

Table 3 Assistance to vulnerable customers
Issue Regulatory instrument Reference Regulation to be preserved
Community service agreements Electricity and Gas Industry Acts S. 21 (f) & Part 2, Division 7 EIA and S. 29(f) & Part 3, Division 5GIA Requiring retailers to enter into agreements for the provision of community service rebates & grants.
Energy audits and appliance assistance Electricity and Gas I ndustry Acts 43(2) EIA and 48G(2) GIA Requiring retailers to offer home energy audits and flexible options for the purchase of appliances in their hardship policies.
Table 4 Implementing smart metering technology in Victoria
Issue Regulatory instrument Reference Regulation to be preserved
   

The NECF provides a framework for customer protections. The NER provides a framework for metering and transfers in the electricity market. The NER does not clarify obligations on a customer in relation to metering arrangements and costs etc. The additional clauses suggested below are required in an electricity metering framework generally, they are not specific to smart metering.

Any drafting in this area will need to be clear on the application of the clause.

Information on the bill Energy Retail Code 4.2(e) How the retailer must show estimated readings from smart meters on customers' bills
  Energy Retail Code 4.2(h) Requirement for retailer to show accumulated end reads and the energy usage by tariff segment, the actual tariffs and the total energy use for the period
  Energy Retail Code 4.2(r) Requirement for retailer to show the average daily cost for each smart meter tariff component over the billing period
  Energy Retail Code 4.4(a), dot point five How the retailer must show the graphical information on the bill for customers with smart meter tariffs
  Energy Retail Code 4.7 Requirement for the retailer to assist the customer to compare their bills with the information on a In Home Display
  Energy Retail Code 5.2 The methodology to be used by the retailer for deriving estimated (or substituted) readings from smart meters and using the information as the basis for the bill
Information to Customers Electricity Customer Metering Code 2.6

This clause allows a customer to review at a minimum the total cumulative energy on a display read of any type of interval meter. The businesses suggest this clause remain to support customers' ability to check the meter index read against the equivalent information on the retail bill.

This clause is relevant for any type of interval meter, not just a smart I meter.

Meter housing Electricity Customer Metering Code 2.3

This clause should remain to provide ctarity that the customer provides a fire proof housing for any new metering equipment and that any meter rooms need to be kept ctear and free from dirt. These safety clauses are not reflected in the NECF. It would be helpful to have this clarity between the customer obligations and the distributor's obligations.

This clause is relevant for any type of meter, not just a smart meter.

Changing Tariffs Electricity Cuslomer Melering Code 3.1 This clause should remain. The distributor and retailer need to agree where new tariffs are introduced and any new metering equipment/configuration is required. There needs to be agreement on IT system capability to bill the new tariffs, ability for a distributor to have a relevant tariff for the new meter configuration etc. This is particularly important given the issues with meter configuration and time of use tariffs.
Information on disconnection Energy Retail Code 13.1(c), dot point three The retailer must include on all disconnection notices that customers with a smart meter could be disconnected remotely
  Electricity Distribution Code 9.1.13.1 Requirement for the distributor to have its telephone number on meters so that customers have a contact point if the premises are deenergised
Disconnection of vulnerable or low-income customers Energy Retail Code 13.2(b) The additional steps that the retailer must take prior to remotely disconnecting customers
Timeframe for remote disconnections Electricity Distribution I Code 12.3 and 12.4 The distributor must remotely disconnect a customer at either a customer's or retailer's request within two hours of the request if it can ~ safely do so
Timeframe for remote reconnections Energy Retail Code 15.2(a) The retailer must use best endeavours to remotely reconnect a customer within 2 hours if it can safely do so
  Electricity Distribution Code 13.1.2 The distributor must use best endeavours to remotely reconnect the customer within 2 hours of the request if it can safely do so
Costs of meter testing Energy Retail Code 6.1 Obligations on retailers to require customers to only pay for meter testing costs if meter is not faulty and after the test has been carried out
Variation to tariff structure, terms and conditions of contract Electricity Distribution Code 9.1.14 Requirement for the distributors to send notices to customers to advise of potential tariff changes by their retailer after the installation of the smart meter
  Energy Retail Code 20 To obtain the customer's explicit informed consent prior to a change to the structure and nature of tariff for an existing contract after the introduction of smart meter tariffs
  Energy Retail Code 26.4(b) Advice to customers on smart meter tariffs of any variations to those tariffs at least 20 business days before the variation is to take effect
Smart meter non reversion Electricity Customer Metering Code 6.1 (aa)

Clause 6.1 (aa) requires that a smart meter can only be replaced with a smart meter. This type of nonreversion clause for smart metering currently has no equivalent in the NER and hence needs to remain.

The clause operates in conjunction with the AMI OIC, which requires a smart meter exchange program. Without this clause from the ECMC, there would be an obligation on the distributor to provide smart meters and an ability, if this clause were removed, for the smart meter to be removed. This would be inefficient and would increase the cost of metering services to all customers.

The DPI mapping tables suggests that new connection rules cater for this situation, however these connection offers would only be based on a new or altered connection eg for an enhanced level of metering or different metering configuration. This is different to a minimum standard of metering where there is already a smart meter.

If clause 6.1 (aa) is included in the VERR then it will need to take precedence over Chapter 7/metrology procedure metering reversion clauses and over the Chapter 5 connection arrangements and the ability to negotiate around a minimum meter standard.

Access to billing and metering data Energy Retail Code Electricity Customer Metering Code 27.2(c) and (e) 7.1

Requirement on retailers and distributors to provide historical billing and metering data within 10 business days to customers with smart meters. Data to be provided electronically or in some form which makes the information understandable and accessible to the customer

The businesses are supportive of ECMC clause 7.1 remaining, ie that distributor, retailer or res onsible person must provide access to data held in the meter or metering data at a customer's request. This clause needs to operate in addition to the NER clause 7.7. As such, this clause wil l need to take precedence over the NER so that a customer is able to come directly to the distributor for data if they wish.

Confidentiality of metering data Electricity Customer Metering Code 7.2

Requirement on retailers and distributors to maintain confidentiality of the data in accordance with the relevant laws.

The DPI mapping table indicates that NER clauses 7. 10 and 8.6 cover confidentiality. This clause in the VERR is unnecessary and should be removed or limited to embedded network operators and on sellers who may not need to comply with the NER.

Ownership of metering data Electricity Customer Metering Code 7.3

The DPI mapping table indicates that there is no equivalent clause in the NECF or NER. This clause essentially states that the party collecting the data owns the data eg distributor, retailer, responsible person or customer.

With the potential for mUlti-party access to metering data and third party access it may be useful for this clause to remain to clarify that data collected by the customer is owned by the customer. Whilst a customer may still own the metering data, they may decide to provide this to other parties at their discretion/risk.

Supply Capacity Control Product Energy Retail Code 12A Not allowing retailers to offer these products to customer before1 1 January 2014
Table 5 Gas metering and billing
Issue Regulatory instrument Reference Regulation to be preserved
Metered vs Unmetered and EG children Gas Distribution System Code 6.1 (b) and (g)

Clause 6.1 (b) states that gas metering is not requi red where the cost of the meter exceeds the revenue, this is particularly the case for children within high rise buildings using only a gas cook top. The clause should remain. In conjunction with (g) and policy positions, there should be no requirement on a distributor to provide child metering data into market systems. We understand that this is consistent with positions being taken by the AER in relation to preventing retail competition within gas embedded networks given that market systems do not allow for this.

These clauses should remain to provide comfort to distributors that metering is not required where it is not cost effective.

Interval meter provision and costs of metering paid by the retailer Gas Distribution System Code 6.2 and 6.3

The businesses suggest that these , clauses be reviewed once the revised NGR metering rules are redrafted into the RMP. These additional requirements may be covered through that process.

This approach is also consistent with the AEMA where small customer metering arrangements or minimum metering requirements are jurisdictional arrangements.

Non-compliant meters Gas Distribution System Code 7.2

Requirement on gas distributors to treat non-compliant meters in a certain way, to ensure the accuracy of the meters for billing purposes

The businesses suggest that this clause is best placed in the RMP where the meter reading and data processing clauses are located.

Correction factor Gas Distribution System Code 7.4

Process for distributors to apply correction factors if adjusting meter readings for pressure, temperature or super compressibility

The businesses suggest that this clause is best placed with other relevant gas Distribution Code and Wholesale Market metering requirements when these are reviewed for inclusion in the RMP.

Residual Retailer Obligations Gas Distribution System Code   Where the Customer and retailer are I aware that the Customer will be off supply, it would be useful for the Distributor to be advised of the interruption or curtailment. This may allow the distributor to arrange meter testing or meter replacement at a time when the customers is off supply so that it is less inconvenient for the customer. Given the increase in no access and rejected access for maintenance of metering arrangements, this would be beneficial to make explicit rather than to rely on general information provisions.
Table 6 Connecting, disconnecting and reconnecting customers on basic meters
Issue Regulatory instrument Reference Regulation to be preserved
    The title on this table is that these provisions relate only to basic meters. Some of the clauses relate to any meter type: basic, manually read interval or remotely read interval. Other clauses in this section are protections for small/residential customers or all customers. Care will need to be taken in relation to the drafting to recognise the timing requirements on manual work in the field regardless of the meter type, ie they can apply to a manual disconnection of a smart meter.
Compensation for wrongful disconnection Electricity and Gas Industry Acts   Requiring retailers to pay compensation for wrongfully disconnecting customers.
Customer connection Gas Distribution System Code 3.1 (a)

The regulation requires that the customer either have a haulage agreement with the distributor or the customer has a retail contract in place with the retailer and the retailer has a haulage contract with the distributor.

These are useful condition precedents that establish that a customer needs to go through the retai ler and ensures that the appropriate contractual arrangements are in place. This provides desirable certainty for customers as well as industry participants. This is consistent with the connection and energisation transactions established in Vic. A minimum change or least cost approach would be for this clause to remain and take precedence over NECF.

Timeframes for connecting customers Electricity Distribution Code Gas Distribution System Code 2.5 3.1 (b)(i) Obligation on distributors to use their best endeavours energise customers' premises within one business day
Timeframes for disconnecting customers Energy Retail Code Electricity Distribution Code Gas Distribution System Code 14(d) 12.6.1 4.1(b) Obligations on retailers and distributors to not disconnect domestic customers after 200pm
Timeframes for reconnecting customers

Energy Retail Code Electricity Distribution Code

Gas Distribution System Code

15.2(a) 13.1.2 4.2(b) Obligations on retailers and distributors to reconnect customers within certain timeframes
Notification by distributors to disconnecting customers for distribution-related reasons (other than in an emergency) Electricity Distribution Code Gas Distribution System Code

11 .2 & 12.1

9.2

Process that distributors must follow prior to disconnecting customers from supply for non-compliance with the distribution obligations

The businesses suggest that C112.1 is adequately covered by the NERR and is not required. NERR 119 sets l out the grounds for distributor initiated de-energisation of a customer for non-compliance and NERR 110 obliges the distributor to include a comprehensive set of information in any disconnection warning.

Written communications to owners of small embedded generators Electricity Distribution Code 9.1.3A

Requirement on distributors to notify embedded generators of their obligation, including their rights to disconnect unsafe small embedded generators.

In line -with our response above, where a connection is non-compliant a distributor has a right to disconnect and must provide written notification I to the customer. There is no practical way of disconnecting the I customer's appliance such as the embedded generation from the customers premise. The businesses suggest that this clause is not required.

Embedded Generation Register Electricity Distribution Code 7.9 There are a number of clauses in the EDC which deal with embedded generation, including the obligation on the embedded generator to . comply with this Code. This includes an explicit obligation on a customer to advise of embedded generation connections, locations, installed capacity etc under Clause 7.9. This obligation is required so that distributors can meet reporting requirements in the EIA for feed in I tariff schemes, provide the correct metering etc It may also be useful I for management of embedded generator safety standards.
Table 7 Security reliability and quality of electricity supply
Issue Regulatory instrument Reference Regulation to be preserved
Application of EDC to exempt networks and embedded generators Electricity Distribution Code 1.3.5

Clause 1.3.5 states that a number of the clauses in the EDC also apply to exempt networks and all clauses of I the EDC apply to a customer who is also a parent/exempt network operator.

The AER is also consulting on exempt networks at the timing of writing this response. Under the AER exempt network guideline, it appears that the clauses that an exempt network may need to follow from the EDC may have been overlooked. The exempt network is also exempt from the distributor obligations in the NECF, and hence there may be a need to reproduce more significant requirements for exempt networks where these are required for customer protection, safety arrangements or good . regulatory practice.

These comments may also apply to the coverage of obligations and standards of embedded generation within exempt networks.

Melbourne CBD - Security of supply Electricity Distribution Code 3.1A Obligations on CitiPower to strengthen the security of supply in the Melbourne CBD
Quality of Supply Electricity Distribution Code 4.2 -4.8 All obligations setting out acceptable standards for quility of supply.
Support for customers on life support during widespread outages Electricity Distribution Code 5.7 That the electricity distributors notify Department for Human Services and Department for Health about sustained outages during widespread power outages
Co-ordinated efforts during widespread power outages Electricity Distribution Code 8.2 Requirement on distributors to cooperate with AEMO in supporting a single industry spokesperson for significant supply events
Notification to customers Electricity Distribution Code 9.1 .2A Requirement on distributors to send a notice to customers yearly about the distributor's role in maintaining supply in emergencies and widespread outages
Guaranteed Service Levels Electricity Distribution Code Gas Distribution Code

6

2.2

To retain the GSLs for the regulated 2011-2015 distribution price period

The businesses suggest including the obligation to pay tariff V customers gas GSLs in accordance with the GDC clause 2.2.

Unaccounted for gas Gas Distribution Code 2.4/Schedule 1

The businesses suggest that the benchmarks for UAFG be retained for both DTS and non DTS. Schedule 1 Part C , C1 is still required for completeness for the remainder of the current Access Arrangement period.

The AER will review the benchmarks as part of the next Access Arrangement. Any jurisdictional regulatory instruments should refer to the AER determinations for future access periods.

The mapping table relies on the Wholesale Market Distribution UAFG procedures made under NGR clause 317 to set out the UAFG process requirements. However, the Wholesale Market Distribution UAFG procedures do not cover the calculation of UAFG payments for non DTS as the head of power lor these procedures is limited to the DTS.

The businesses suggest that there is a need for the current benchmarks to remain in the VERR and for a clear UAFG calculation process which covers both DTS and non DTS ..

Liability Electricity Distribution Code 16 (c)

The current deemed distributorcustomer contract and the EDC both advise business customers to take reasonable precautions to minimise risk of loss/damage which may result in poor quality or reliability of supply.

The businesses consider that this is still important to have in the regulatory framework so that appropriate precautions are taken.

Table 8 Planned interruption to the delivery of gas supply
Issue Regulatory instrument Reference Regulation to be preserved
Notice to be provided for customer for planned interruptions Gas Distribution System code 9.1 (3)

Requirement on gas distributor to provide 1 0 business days' notice

The businesses consider that 1 0 business days' notice is only required for certain business customers where a long notification period is required to shut equipment down. Planned interruptions could be consistent with the NECF arrangements, with these business customers having the ability to I negotiate alternative planned interruption timeframes as required.

If this clause remains in the VERR, the drafting will need to ensure that this clause takes precedence over the NERR clause.

Table 9 Public lighting
Issue Regulatory instrument Reference Regulation to be preserved
Setting minimum public lighting standards and other matters relating to the provision of public lighting Public Lighting Code All Requirements on distributors in relation to public lighting
Table 10 Undergrounding of distribution fixed assets
Issue Regulatory instrument Reference Regulation to be preserved
Process to be followed in assessing proposals for undergrounding of distribution fixed assets Electricity Industry Guideline No 14: Provision of Services by Electricity Distributors 2 Requirements on distributors to cooperate in assessing proposals and determining costs for undergrounding distribution fixed assets

8 ESC Guidelines

8.1 Electricity Industry Guideline No 14: Provision of Services by Electricity Distributors

This guideline facilitates efficiency in the following aspects of electricity distribution:

  • The undergrounding of distribution fixed assets
  • The determination of customer contributions to the capital cost of new works and augmentation
  • The contestability of connection and augmentation works
  • The provision of excluded services.

The Discussion Paper proposes that all matters have been dealt with in NECF except for undergrounding.

In contrast the businesses request that the excluded service provisions remain to support AMI remote services until 31 December 2015.

Capital contributions for connections also needs to remain for this pricing period until the NECF AER connection charging policy is implemented as part of the next price review process.

8.2 Electricity Guideline 15: Connection of Embedded Generation

The Discussion Paper proposes that the NECF Chapter 5A will effectively cover the field of regulation covered by this Guideline 15. The Discussion Paper proposes that this Guideline is not required. The businesses are comfortable with the proposed approach.

8.3 Electricity Guideline 17: Ringfencing

The Discussion Paper proposes that since there are no integrated retail and distribution businesses in Victoria that this guideline is no longer necessary. The businesses support this proposal.

8.4 Electricity Industry Guideline 3: Regulatory Information Requirements

The guideline relates solely to economic regulatory functions and will no longer be required when it is replaced by an AER regulatory instrument made under the NER. The NER transitional rules provide for this guideline to continue until the AER regulatory instrument is in place.

Whilst the businesses are comfortable with this approach, the businesses do not support any duplication of information requirements once the AER regulatory instrument is in place.

8.5 Electricity Industry Guideline 1: Voltage Variation Compensation

The Discussion Paper proposes that the NERL part 7 - small compensation claims regime should apply and this guideline would be repealed.

The businesses are comfortable with this approach as long as the claimable incidents and amounts prescribed for the NECF are consistent with the current arrangements and funding in the electricity price review determination.

The businesses look forward to DPI consultation with distributors on the local instruments required for National Energy Retail Laws (NERL). Part 7 and the AER consultation on repeat claimants.

8.6 Electricity Industry Guideline 13: Greenhouse Gas Disclosure on Electricity Customer's Bills

The businesses have no comments on the continued need for this guideline.

8.7 Gas Industry Guideline 3: Regulatory Accounting Information

The National Gas (Victoria) Act gives power to the AER to enforce this guideline in place of the ESC until the revision of the current access arrangements. The businesses support that this guideline will be retained for the current access period.

8.8 Energy Industry Guideline 22: Regulatory Audits of Retail Energy Businesses

The NECF includes a comprehensive compliance framework and the ability for the AER to audit regulated entities. The businesses concur with the DPI proposal that this guideline is not required.

8.9 Energy Industry Guideline 19: Energy Price and Product Disclosure

In light of the AER Retail Pricing Information Guideline and the requirement on the AER to operate a price comparator with similar functionality to the Your Choice website, the Discussion Paper is proposing that this guideline is no longer required. The businesses support the DPI proposal.

8.10 Energy Industry Guideline 21: Energy Retailers Financial Hardship Policies

In light of the AER guidance on its approach to approval of retailer hardship policies the businesses agree with the DPI proposal that this guideline is no longer required.