Small-scale electricity networks

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General information

There are regional and remote communities in South Australia that are provided with electricity through standalone networks. Some of these networks are not connected to the national electricity market and some are connected to the national electricity market via an inset network arrangement.

The Commission regulates small-scale electricity supply services through the licensing regime established by the Electricity Act 1996 (Electricity Act).

The Commission licenses all participants in the electricity supply industry where those participants engage in the generation of electricity, operation of a transmission or distribution network, power system control or electricity retailing.

Licensees are required to operate in accordance with specified licence conditions set by the Commission. Small-scale licensees providing retail and distribution services have licence requirements broadly covering:

  • consumer protections – behavioural standards and minimum requirements that retailers must comply with when dealing with their customers, including reliability of supply requirements, and
  • technical requirements – such as the development of a Safety, Reliability, Maintenance and Technical Management Plan (SRMTMP), a connection policy and a metering plan (if applicable), and reporting requirements.

Customers of small-scale electricity licensees are afforded similar consumer protections to customers connected to the National Electricity Market. Licensees are required to adhere to the following consumer protection obligations: 

  • Customer supply contracts – requirements to develop standard terms and conditions on which a licensee will connect customers’ supply and sell and supply electricity. 
  • Customer dispute resolution procedures – requirements to have procedures in place, based on AS 10002-2022 ‘Guidelines for complaints management in organisations’. 
  • Supply obligations – requirements to maintain the quality of supply and minimise interruptions, provide notice for planned interruptions and connect customers within agreed timeframes. 
  • Customer service obligations – requirements to provide regular bills containing specific information, and to conduct regular meter readings. 
  • Dealing with billing disputes – requirements relating to undercharging and overcharging including minimum payment methods, offering flexible payment arrangements, and rules relating to security deposits. 
  • Disconnections and restoration of supply – obligations around disconnecting customer supply for non-payment, timeliness for restoration of supply and prohibitions on disconnection.

The Commission monitors and reports on small-scale networks’ compliance with regulatory requirements and takes enforcement action in instances of non-compliance, if necessary. 

Performance outcomes

Performance summary 2022-23

There are 10 small-scale electricity distribution network operators and one small-scale transmission network operator licenced under the Electricity Act 1996. Of those 10 network operators, four are licensed as small-scale electricity retailers. These licensees altogether provided services to 6,000 customers through off-grid and inset electricity networks in South Australia.

Licensees reported that as at 30 June 2023, a total of 355 customers were on flexible payment arrangements (147 fewer than at 30 June 2022), and 28 residential customers were registered as life support customers (24 more than at 30 June 2022). The largest increase in life support customers was with Cowell Electric Supply Pty Ltd (Cowell Electric) which reported zero registered life support customers in 2021-22 and 21 in 2022-23. 

In addition, 393 customers were reported to be receiving an energy concession as at 30 June 2023, compared with zero as at 30 June 2022. The increase in customers receiving an energy concession was made up entirely of the customer base of Cowell Electric.

In 2022-23, five licensees together reported 44 material service issues with individual event impacts ranging from one affected customer, to the entire customer base.

The largest number of material service issues was reported by Cowell Electric which reported 34 in 2022-23. All issues related to unplanned outages with 33 of those being unplanned outages lasting longer than 12 hours, each affecting from zero to 97 customers. The main causes were listed as severe weather/lightning, and distribution faults, for example tripping due to equipment failure.

Under the verified trust and accountability (VTA) approach, Cowell Electric was categorised as Category B in 2021-22, due to concerns around its network performance. In monitoring Cowell Electric’s network performance, the Commission has no evidence to suggest that Cowell Electric is not taking reasonable steps to improve performance in this area, however, staff will continue to monitor its performance.

Compliance summary for 2022-23

In 2022-23, no material non-compliances were reported. All the non-compliances reported were assessed as low risk or administrative in nature and had minimal impact on customers.

Please refer to the Bulletin no 4 – Reporting requirements for further information on the ongoing monitoring and reporting obligations. 

Historical Performance Outcomes

Compliance reviews

While the Commission assesses energy entities performance against annual service standards and reliability standards each year, events may occur during the year that warrant special ad hoc reporting – referred to as Significant Performance Events.

The Commission considers the following criteria in determining whether a Significant Performance Event has occurred:

  • a significant number of customers are affected for a lengthy duration, or there is reason to believe that a significant number of customers may have been affected for a lengthy duration.
  • the event is likely to seriously impact on the licensed entity’s ability to meet one of more of its annual service standard(s) or reliability target(s).
  • the Commission needs to undertake a review to be confident that the licensed entity has complied with its obligations under the relevant industry Code(s).
  • there is strong stakeholder interest, or there is anticipated to be strong stakeholder interest.

The criteria recognise that a balance needs to be struck between reporting on every event and the resources it entails, and meeting stakeholder expectations on the provision of information in such situations.

The Commission has published the following significant event report, in respect of the performance of off-grid electricity networks.

Cowell Electric Supply Pty Ltd - prepayment metering data analysis

The Electricity (General) (Payment Condition) Variation Regulations 2021 (Variation Regulations) commenced on 1 July 2022. The Variation Regulations required the Commission to impose on Cowell Electric Supply Pty Ltd’s (Cowell Electric) electricity generation, distribution and retail licence a condition that it sell electricity to ‘prescribed customers’ solely by use of a prepayment meter (PPM) system. 

As required by the Variation Regulations, in June 2022 the Commission gave effect to that requirement and made relevant amendments to the licence. Having consulted with stakeholders, the Commission, in the ‘Cowell Electric Supply Pty Ltd licence amendment: Prepayment by default consumer protections final decision paper’ (final decision paper), identified a range of metrics that Cowell Electric was required to report against on a quarterly basis in relation to those PPM minimum consumer protection terms and conditions set out in its licence. That reporting does not, however, encompass consideration of the merits of the overall PPM policy, as contained within the Variation Regulations: consideration of those matters lies outside of the Commission’s remit in this area.

This report provides initial information on the PPM minimum consumer protection terms and conditions set out in Cowell Electric’s licence, based on Cowell Electric’s reporting of metrics during the first year of operation. 

With only 12 months of data currently available (and noting that, for most communities, PPM commenced during, rather than at the start of, the year) the monitoring of the PPM reporting metrics is very much in its infancy. The Commission therefore considers that this initial report provides baseline data, which will evolve over time so as to allow consumers, other stakeholders, policy makers and the Commission to gain insights into the operation of the PPM minimum consumer protection terms and conditions set out in Cowell’s licence. Potentially, the reporting information may also inform any future reviews of the overarching policy position as set out in the Variation Regulations. 

The Commission will, however, continue to collect and assess the data in relation to the PPM minimum consumer protection terms and conditions. Building a more comprehensive data set will inform potential future development or refining of reporting metrics and consumer protections. 

In that context, the Commission will in November 2023 commence a review of the PPM minimum consumer protection terms and conditions. If you would like to be involved in the review, please subscribe to project updates or contact Consumer Protection and Pricing group at [email protected] for further information.