Embedded network compliance

The Australian Energy Regulator, the government agency responsible for regulating the National Energy Market, is running an education program to ensure relevant embedded network exemption holders are aware of the obligation to become a member of either the Energy and Water Ombudsman of South Australia (EWOSA) and the Energy and Water Ombudsman of New South Wales (EWON).

For retail and network exemption holders that supply and sell energy to residential embedded network customers in SA & NSW (exempt entities), joining EWOSA or EWON is a requirements of the AER (Retail) Exempt Selling Guideline (retail guideline) and the Electricity Network Service Provider - Registration Exemption Guideline (network guidelines) as of 1 January 2019. 

Failing to join the relevant ombudsman scheme may expose your business to a substantial fine. If you have not met the requirement to join the relevant ombudsman scheme, please visit the relevant website to find out about the scheme and to apply for your membership. 

What are EWOSA & EWON?
In SA and NSW, EWOSA and EWON respectively are the energy ombudsman prescribed in the National Energy Retail Regulations, who assist in resolving disputes between customers and its members. 

Once an exempt entity joints the relevant ombudsman scheme, the scheme can receive, facilitate, or investigate complaints from embedded network customers. The relevant ombudsman scheme can assist in resolving disputes that exempt entities and their embedded network customers have not been able to resolve themselves. The relevant ombudsman scheme has the authority to make binding determinations and directions to members as well as recommend improvements to their complaint handling processes. 

The requirement to join an energy ombudsman scheme brings consumer protections for customers of embedded networks in line with the protections for customers of authorised retailers and distributors. 

In addition to membership, exempt entities are required to: 

  • Inform customers of the right to lodge a complaint with their relevant ombudsman scheme or ask for free independent information and advice. 
  • Provide information about their relevant ombudsman scheme's procedures and scope of services when responding to a customer complaint. 
  • Include information about their relevant ombudsman scheme (including contact details) on any disconnection warning notices. 
What happens if my business does not join EWOSA or EWON?

Condition 17 of the retail guideline requires an exempt person to be a member of, or subject to, an energy ombudsman scheme for each jurisdiction where it sells energy to exempt customers, and to comply with the requirements of that scheme. 

Condition 13 of the network guideline requires an exempt person to be a member of, or subject to, an energy ombudsman scheme in the State or Territory where the exempt network is located and comply with the requirements of that scheme. 

As the National Energy Retail Law requires exempt persons to comply with this condition, failing to join EWOSA or EWON may attract civil penalties for breaching section 112(2), which for conduct that occurred on or after 29 January 2021 can include penalties of: 
  • Up to $10,000,000 or
  • If the Court can determine the value of any benefit reasonably attributable to the breach of the civil penalty provision that the body corporate, and any body corporate related to the body corporate, has obtained, directly or indirectly three times the value of that benefit. 
  • If the Court cannot determine the value of the benefits ten per cent of the annual turnover of the body corporate during the 12-month period ending at the end of the month in which the body corporate breached, or began breaching, the civil penalty provision.