On 12 March 2015 the Australian Energy Market Commission (AEMC) released its draft report about a model for optional firm access to electricity transmission networks.
The report follows the development, testing and assessment of the optional firm access model by the AEMC at the request of the Council of Australian Governments’ Energy Council.
The Oregon legislature is considering a bill that would require the state’s large electric utilities to procure one or more “qualifying energy storage systems” by January 1, 2020. H.B. 2193 would apply to any entity that is engaged in the business of distributing electricity to retail electricity consumers in Oregon (not including a consumer-owned utility) if the entity makes sales of electricity to retail customers in an amount that equals 3 percent or more of all electricity sold to retail electricity customers in Oregon. An energy storage system is deemed to be “qualifying” if it is “cost-effective,” and the legislation contemplates that each electric company would procure one or more such systems having the capacity to store not less than 5 megawatts of electricity but not more than an amount of electricity that is equal to one percent of the company’s peak load for 2014. H.B. 2193 would allow an electric company to recover in its rates all costs prudently incurred in procuring one or more cost-effective energy storage systems, “including any above-market costs associated with procurement.”
South Carolina’s major utilities recently submitted their proposed distributed energy resource programs to the South Carolina Public Service Commission (PSC) for approval. The proposals come in the wake of the South Carolina Distributed Energy Resource Act of 2014 (commonly referred to as Act 236), which went into effect on June 2, 2014. Applauded as landmark legislation resulting from collaboration among utilities, electric cooperatives, environmental advocates, and solar businesses, Act 236 paves the way for the development of solar power and other renewable energy sources in South Carolina. Read more here.
The Energy Market Reform Working Group in Australia released a consultation paper at the end of 2014 regarding the regulatory implications of new products and services in the national electricity market.
New products and services include energy supply from generation facilities installed at the customer’s premises (which may be combined with energy storage), products and services relating to demand management and energy information and advice.
The paper outlines some of the potential regulatory implications of these new products and services. It seeks feedback from stakeholders as to the types of new products and services which may be offered to small customers and whether regulatory reforms may be necessary – from either a consumer protection or a power system operations perspective.
Stakeholders are invited to make submissions on the issues raised by the consultation paper by close of business on 20 March 2015. Written submissions can be sent by email to energycouncil@industry.gov.au. Alternatively, please contact us and we would be happy to assist you in preparing a submission.
To read more about this consultation paper and the key findings and issues identified, please click here.
The Australian Energy Regulator (AER) is currently considering its approach to regulating new and innovative energy selling business models, for example business models which incorporate electricity storage, under the National Energy Retail Law.
The AER released an issues paper on this topic at the end of 2014 and has sought feedback on the issues paper from interested stakeholders. The AER has indicated that it will publish its final position in the second quarter of 2015. Read More
On January 22, 2015, the Federal Energy Regulatory Commission (“Commission”) issued a Proposed Policy Statement on Hold Harmless Commitments (“Policy Statement”), in which it proposed changes to the basis on which it will review transactions subject to Section 203 of the Federal Power Act (“FPA”).[1] Specifically, the Policy Statement proposes clarifications to the rules regarding the identification of transaction-related costs and use of hold harmless commitments, which are often included in Section 203 applications for transactions involving traditional franchised public utilities as a means of demonstrating that a proposed transaction will not adversely affect ratepayers. As part of a hold harmless commitment, an applicant typically commits not to seek recovery of transaction-related costs in Commission-jurisdictional rates unless the applicant can demonstrate that the costs are off-set by transaction-related savings. The Commission must ensure that a proposed transaction does not have an adverse impact on jurisdictional rates and has traditionally allowed applicants to use a hold harmless commitment to satisfy this prong of the Commission’s analysis. Read More
The National Electricity Amendment (Distribution Network Pricing Arrangements) Rule 2014 No. 9 (Rule Change) came into effect on 1 December 2014, amending the Australian National Electricity Rules (NER) by introducing a more ‘cost reflective’ model for network pricing. Under the new regime, distribution tariffs must comply with several new pricing principles, with the objective that the network prices that a Distribution Network Service Provider (DNSP) charges each consumer should reflect its efficient costs of providing network services to that consumer.
To read the full alert, click here.
The Federal Court of Australia has found that AGL South Australia Pty Ltd (AGL) made false or misleading representations and engaged in misleading or deceptive conduct concerning the level of discount residential consumers would receive under AGL’s energy plans.
The Court held that consumers who commenced an energy plan with AGL between January and mid-July 2012 would have understood through telephone conversations with AGL Customer Service Representatives that they would receive a discount calculated by reference to the rates which would otherwise have applied to them if they had not entered into the energy plan. Although they initially received the discount, in mid-2012 AGL increased the rates under its energy plans and sent a letter to these consumers advising them of their new rates, stating that they would continue to receive their discount.
Justice White held that this was false and misleading as following the rate increase, these rates were actually higher than those AGL applied to similar consumers who had subsequently commenced an energy plan post-July 2012. As such, AGL’s conduct “reduced the benefits of the discounts represented to the consumers when they agreed on their energy plan”.
If you would like to read more about this case, please click here.
The New South Wales parliament has recently passed an act amending the Electricity Supply Act 1995 (NSW) to give special powers to electricity network operators in relation to bush fire prevention on bush fire prone land that is privately owned.
The Electricity Supply Amendment (Bushfire Hazard Reduction) Act 2014 (Amendment Act) provides that a network operator may give the owner or occupier of privately owned bush fire prone land a written direction requiring the owner or occupier to carry out bush fire risk mitigation work on vegetation or aerial consumer mains (being privately owned powerlines) on the land in several circumstances, including where the network operator has determined that the vegetation could make the network operator’s electricity works or aerial consumer mains become a potential cause of bush fire or where a fault in the aerial consumer mains could make them become a potential cause of bush fire.
A landowner will have 30 days to respond to a direction and must complete the required work within 60 days after the direction is given. Network operators are authorised to enter premises and do the required work if an owner fails to comply with a direction.
Significantly, directions given under the new provisions override requirements under other legislation to obtain a consent or authorisation prior to carrying out certain work (including clearing vegetation) as the Amendment Act specifically provides that work required to be done under a direction will not require development consent under the Environmental Planning and Assessment Act 1979 (NSW) or an approval or consent under certain other legislation, including the Native Vegetation Act 2003 (NSW).
The Amendment Act also addresses responsibility for the costs of complying with a direction – which will be the responsibility of the landowner in some circumstances and the network operator in others.
The Washington Utilities and Transportation Commission (WUTC) has issued an interpretive policy statement clarifying its jurisdiction to regulate third-party owners of solar panels and other net metering systems as “Public Service Companies.” Docket No. UE-112133 (July 30, 2014) (statement). While the WUTC’s policy statement provides useful guidance on the agency’s current position and the action it will likely take in the future, the statement is not binding on the agency. Read More
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