Appendix B: Current electricity ring-fencing arrangements by jurisdiction (NSW) ICRC (ACT) QCA (Queensland) ESCOSA (SA) OTTER (Tasmania) ESC (Victoria) AER Transmission guidelines Legal separation Not addressed. DNSP must not carry on a related business. DNSP must not carry on a related business within that legal entity. DNSP must not hold a retail licence or a generation licence (except when generation is carried out for network support purposes and where no revenue is earned from such generation). Not addressed. Not addressed. TNSP that supplies ring-fenced services must be a legal entity and must not carry on a related business, unless related business does not attract total revenue of less than or equal to 5% of the TNSP’s total annual revenue. Accounting separation Not addressed. DNSP must establish and maintain consolidated and separate accounts for the provision of distribution services and its other businesses. DNSP must establish and maintain consolidated and separate accounts for the provision of prescribed distribution services and excluded services. Not addressed. Separate accounting guidelines covering how DNSP should present accounting reports and disaggregation statements they provide contestable services. Not addressed. TNSP must establish and maintain separate set of accounts for provision of services and separate amalgamated accounts for entire business.
IPART (NSW) ICRC (ACT) QCA (Queensland) ESCOSA (SA) OTTER (Tasmania) ESC (Victoria) AER Transmission guidelines Allocation of costs DNSP must ensure costs relating to a distribution service are fully allocated to either prescribed distribution services or excluded distribution services on a causation basis. DNSP must not a related business. DNSP must allocate any costs that are shared between prescribed distribution services, excluded services and other activities in a manner that ensures there is no cross subsidy and according to a methodology approved by the QCA. Not addressed. Separate accounting guidelines covering how DNSP should present accounting reports and disaggregation statements where they provide contestable services. Not addressed. TNSP that provides ring-fenced service must allocate costs that are shared between any services and any other activity. Access to information DNSP must provide information relating to the provision of prescribed distribution services to an independent accredited service provider on terms that are no less favourable than the terms on which that DNSP must ensure that, where commercially valuable information is made available to a related business it is also made available to similarly situated entities. DNSP must not provide distribution network access to a related business on more favourable terms than those it provides to any other customer or Code participant. DNSP must ensure that any information obtained in the course of conducting a licensed business which might reasonably be expected to affect materially the commercial interests of a related business or provide a related business an DNSP must establish access controls so that users of DNSP’s information systems do not have access to information concerning the distribution service if the user is providing a contestable service. DNSP must ensure that distribution information it provides to any retail business is available to all retail businesses. TNSP that provides ring-fenced services must ensure that information it provides to any associate that takes part in a related business is available to any other party, and that preferential treatment is not given to an associate that takes part in a related business.
information is made available to that part of the DNSP’s business that provides contestable services. advantage over its competitors is disclosed the related business and its competitors in a non- discriminatory manner. (NSW) ICRC (ACT) QCA (Queensland) ESCOSA (SA) (Tasmania) ESC (Victoria) AER Transmission guidelines
Customer information Not addressed. DNSP must ensure that information obtained by conducting its business and which might reasonably be expected to affect materially the interests of an existing or prospective customer is not disclosed to any other person without the approval of the existing or prospective customer to whom that information pertains. Exceptional circumstances DNSP must ensure that all confidential information provided by a customer or prospective customer is used only for the purpose for which that information was provided and not disclosed without the approval of the customer or prospective customer. Exceptional circumstances given in guidelines. DNSP must ensure any information obtained in conducting a licensed business is used only for the purpose for which that information was provided or obtained. Not addressed. However, guidelines provide that when communicating with a customer, DNSP must not communicate in a way that would favour the distribution or related business over another service provider in provision of contestable services, and where appropriate, DNSP must communicate to customer that contestable services may also be obtained from independent service provider. Not addressed. However, guidelines provide that when DNSP is communicating with a customer, it must make clear that it is a distributor carrying on distribution business, and when retail business communicating with customer, it must make clear that it is a retailer carrying on retail business. Not addressed.
Waivers Tribunal may DNSP waiver from provision of guidelines upon request and after considering factors including costs of compliance, DNSP’s ability to achieve economies of scale, the effect of the waiver on competition, and after public consultation (if relevant). Not addressed. QCA may waive DNSP’s obligations if satisfied that cost of complying outweighs benefit or likely benefit to public. QCA to ask for and consider any submissions it receives. Commission may grant waiver from fencing obligations if satisfied that the benefit or likely benefit of compliance will be outweighed by administrative cost to Distribution Licensee. Regulator may grant waiver at request of distributor of any obligation under guidelines after undertaking consultation process and if satisfied that costs of compliance outweigh benefits. Not addressed. ACCC may waive TNSP’s ring-fencing obligations if satisfied that the benefit to the public is outweighed by the administrative cost to the TNSP of compliance. Physical and functional separation DNSP must ensure that the offices from which DNSP staff provide specified services are separate from the offices from which DNSP staff provide contestable services. DNSP must ensure office space is physically separate from that of related businesses. DNSP must ensure that operational staff involved in providing commercially sensitive services (such as customer DNSP must ensure that its marketing are not also staff of a related business. DNSP must ensure that any marketing staff involved in the DNSP’s licensed business are not also involved in a related business; and any operations staff involved in both the DNSP’s licensed business and a related business are shared between the two businesses on a non- discriminatory DNSP must ensure that of business providing or marketing regulated distribution services operate independently and have separate work areas from parts of business providing contestable services. Also, DNSP must ensure that its employees are not staff of DNSP must ensure that units marketing or providing distribution services and units within retail business operate independently and have separate work areas with access controls that prevent staff of either unit entering into work area of other unit. Also, DNSP staff must TNSP must ensure that its marketing staff are not also servants/consultants of an associate that takes part in a related business, or that its servants/consultants are marketing staff of an associate that takes part in a related business.
connection and meter reading) are not also staff of a related business. arm’s length commercial basis. related business providing contestable services. not also be staff of retail business. IPART (NSW) ICRC (ACT) QCA (Queensland) ESCOSA (SA) (Tasmania) ESC (Victoria) AER Transmission guidelines
Non- A DNSP must provide a prescribed distribution service to an independent accredited service provider on that are no less favourable than the terms on which it provides that prescribed distribution service to that part of the DNSP’s business which provides contestable services. DNSP must conduct business with Related Business at arm’s length and in a competitively neutral manner. In particular, utilities have network use of systems agreements with a Related Business the arrangements: - should be on a contract basis with terms and costs clearly defined - should be transparent - should be on terms no more A DNSP that provides prescribed distribution services in Queensland must not provide distribution network access to a related business on more favourable terms than those it provides to any other customer or Code participant. The Distribution Licensee must ensure that, in providing or services for which the Licensed Business is the monopoly supplier to a Related Business or a competitor of the Related Business, those goods and services are provided on a non- discriminatory, commercial basis. A distributor must not, in conducting its regulated distribution services business, make decisions or act in a manner that unreasonably discriminates either against or in favour of any business providing contestable electrical services or against or in favour of the customers of any business providing contestable electrical services. In conducting its distribution business, a distributor must not make decisions or act in a manner that unreasonably discriminates in favour of any electricity business or in favour of the customers of any electricity business. A TNSP that provides ring-fenced services must not make decisions or act in a manner that discriminates in favour of an associate in relation to the or conditions on which those services are provided. To avoid doubt, a TNSP providing services must offer those services to its customers on terms and conditions no less favourable than it provides to itself or its associates.