Draft Decision DNSP Applications for Waivers from the Electricity Distribution Ring-Fencing Guideline
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Draft Decision DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline October 2017 Waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - Draft Decision 1 © Commonwealth of Australia 2017 This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attributions 3.0 Australia licence, with the exception of: the Commonwealth Coat of Arms the ACCC and AER logos any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright, but which may be part of or contained within this publication. The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence. Requests and inquiries concerning reproduction and rights should be addressed to the Director, Corporate Communications, Australian Competition and Consumer Commission, GPO Box 3131, Canberra ACT 2601 or [email protected]. Inquiries about this publication should be addressed to: Australian Energy Regulator GPO Box 520 Melbourne VIC 3001 Tel: 1300 585165 Email: [email protected] AER Reference: 61887, D17/134573 DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - draft decision 2 Contents Shortened forms............................................................................................. 6 Request for submissions .............................................................................. 8 Summary ......................................................................................................... 9 1 Ring-fencing waiver applications ......................................................... 13 1.1 . Waiver process ................................................................................ 14 1.2 . Assessment approach .................................................................... 15 1.3 . Waiver application groupings ........................................................ 16 2 Waiver Group 1 – Reclassification of services.................................... 18 2.1 . Waiver descriptions and our preliminary positions ..................... 18 2.2 . Assessment ..................................................................................... 29 2.2.1 Submissions on reclassification of services .................................. 30 2.2.2 Submissions on type 1-4 metering ................................................ 32 2.2.3 Submissions on ‘sale of inventory’ ................................................ 33 2.3 . Other reclassification waiver applications.................................... 34 3 Waiver Group 2 – Legal / functional separation .................................. 35 3.1 . Ausgrid, Endeavour Energy, Ergon Energy, Energex and TasNetworks – 6 month transitional waiver applications .......................................... 35 3.1.1 Description of waiver applications ................................................. 36 3.2 . Essential Energy and TasNetworks – contestable meters (Type 1-4) ...... 37 3.2.1 Description of waiver applications ................................................. 37 3.3 . AusNet – Mt Baw Baw ..................................................................... 38 3.3.1 Description of waiver application ................................................... 38 3.4 . Assessment ..................................................................................... 39 3.4.1 Ausgrid, Endeavour Energy, Ergon Energy, Energex and TasNetworks – 6 month transitional waivers ........................................................................... 39 3.4.2 Essential Energy and TasNetworks – contestable meters (Type 1-4)40 DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - draft decision 3 3.4.3 AusNet – Mt Baw Baw .................................................................. 42 4 Waiver group 3 - Branding .................................................................... 43 4.1 . CitiPower and Powercor – Powercor Network Services, CitiPower and Powercor brands .................................................................................... 43 4.1.1 Description of waiver applications ................................................. 44 4.2 . Energex and Ergon Energy – other electricity services and unclassified distribution services .............................................................................. 44 4.2.1 Description of waiver application ................................................... 44 4.3 . Ergon Energy – Hayman Island ..................................................... 46 4.3.1 Description of waiver application ................................................... 46 4.4 . Assessment ..................................................................................... 46 4.4.1 CitiPower and Powercor – Powercor Network Services, CitiPower and Powercor brands ......................................................................................... 46 4.4.2 Energex and Ergon Energy – other electricity services and unclassified distribution services ..................................................................................... 47 4.4.3 Ergon Energy – Hayman Island .................................................... 48 5 Waiver group 4 - Regional service delivery ......................................... 49 5.1 . Ergon Energy—Isolated systems .................................................. 49 5.1.1 Description of waiver application ................................................... 49 5.2 . Ergon Energy—Ergon Energy Queensland (electricity retailer) . 50 5.2.1 Description of waiver application ................................................... 50 5.3 . Essential Energy—Essential Water ............................................... 50 5.3.1 Description of waiver application ................................................... 50 5.4 . Essential Energy—Water Access .................................................. 51 5.4.1 Description of waiver application ................................................... 51 5.5 . Assessment ..................................................................................... 51 5.5.1 Essential Energy – Essential Water and Water Access – and Ergon Energy – Isolated systems .......................................................................... 51 5.5.2 Ergon Energy – Ergon Energy Queensland (electricity retailer) .... 52 DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - draft decision 4 6 Waiver group 5 – ActewAGL gas businesses ..................................... 54 6.1.1 Description of waiver applications ................................................. 55 6.2 . Assessment ..................................................................................... 55 7 Waiver Group 6 - Regional offices ........................................................ 57 7.1 . Ergon Energy—Mareeba and Charters Towers ............................ 57 7.1.1 Description of waiver application and assessment ........................ 58 7.2 . Ergon Energy—Barcaldine ............................................................. 60 7.2.1 Description of waiver application and assessment ........................ 60 7.3 . Essential Energy – regional service delivery................................ 61 7.3.1 Description of waiver application and assessment ........................ 62 7.4 . Essential Energy - Technical training courses ............................. 64 7.4.1 Description of waiver application and assessment ........................ 65 8 No Action Letters ................................................................................... 67 8.1.1 TasNetworks ................................................................................. 67 8.1.2 CitiPower and Powercor ............................................................... 68 9 Draft decision ......................................................................................... 70 DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - draft decision 5 Shortened forms Shortened Form Extended Form AAD ActewAGL Distribution ACS alternative control services AE affiliated entity AEC Australian Energy Council AER Australian Energy Regulator AGL AGL Energy Limited ASP accredited service provider CAM Cost Allocation Methodology CES contestable electricity services DNSP electricity distribution network service provider Explanatory Statement Australian Energy Regulator, Electricity Distribution Ring- fencing Guideline Explanatory Statement, November 2016 F&A Framework and Approach Guideline Australian Energy Regulator, Electricity Distribution Ring-Fencing Guideline Version 2, October 2017 NEM National Electricity Market NEO National Electricity Objective NER or the rules National Electricity Rules No Action Letter An AER-issued letter that guarantees the AER will not take any action in relation to certain conduct NSW F&A Australian Energy Regulator, New South Wales Framework and Approach, July 2017 Other Services Services other than: (a) transmission services; or (b) distribution services within the meaning of the Guideline. PIAC Public Interest Advocacy Centre DNSP applications for waivers from the Electricity Distribution Ring-fencing Guideline - October 2017 - draft decision