The Electricity Act 1996 provides, amongst other things, a licensing regime for those who carry on operations within the electricity supply industry. Section 15 of the Electricity Act prohibits any persons from carrying on operations within the electricity supply industry unless they have first obtained a licence from the Commission.
Regulation 6(3) of the Electricity (General) Regulations 1997 however, establishes two exemptions from the requirement to be licensed prior to carrying on operations in the electricity supply industry. Common to both of the exemptions is the factual circumstance that, in each case, the operations must relate to an inset network.
The Commission is required under the Regulations, to set the maximum scale of charges that an operator can charge inset customers for electricity. The obligation of an operator to charge an inset customer in accordance with the Commission’s price-setting decision is a condition of statutory exemption from the need to be licensed by the Commission under Part 3 of the Electricity Act.
The Commission has determined that from 1 July 2010:
- The maximum price a network operator may charge small transitional inset customers (who consume less than 160 Megawatt- hours per year) is the applicable AGL SA standing contract price; and
- The maximum energy prices (peak and off-peak) that an inset network operator can charge large transitional inset customers should be no higher than the energy price paid by the operator under its own electricity contract with an energy retailer.
The Commission note that this price-setting methodology will continue in effect for subsequent periods unless otherwise notified by the Commission.
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