Energy bill cuts for retirement villages, manufactured home parks: embedded networks

Article published 1 March 2023

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Anyone living in an embedded network might be set to see a decrease to their utility bills.

First things first, what is an embedded network?

If you live in an apartment block, retirement village or caravan park you might be in an embedded network. Instead of getting your bill straight from the provider, the manager of the network buys energy, gas or water from the provider and then sells it on to you.

An inquiry into embedded networks in NSW was launched last year with the report being released at the end of the year. Now the NSW Government response has been released too.

The report found many issues with embedded networks in their current state.

For example, hot water embedded networks fall outside of existing regulations so many customers are receiving ridiculously high bills. In one case this was nearly $2,000 over just a 9-month period.

There are also big safety risks with customers taking extreme cost cutting measures that are detrimental to their health and infrastructure in many networks not being maintained properly.

Further, there is currently no requirement to inform buyers or renters that a property is within an embedded network before they sign the contract or give them any information on what this actually means. When issues inevitably arise, the complaints process is confusing, time consuming and hard to access.

22 recommendations were made to address these issues, 14 of which were supported in the government response and a further 7 were supported in principle.

A couple have already been addressed with the NSW Government’s newly announced Embedded Network Action Plan.

This plan includes three main actions that they hope will improve outcomes for 150,000 customers living in embedded networks.

First, to introduce a maximum price for any gas, hot or chilled water supplied through embedded networks. This maximum price will be determined by the Independent Pricing and Regulatory Tribunal (IPART).

Second, to launch an IPART review into electricity prices in embedded networks. The final report of this review will recommend whether the maximum electricity price should be set below the Commonwealth’s default market offer. This is the maximum amount you can be charged for electricity directly from suppliers.

Last, they will launch another IPART review into whether the establishment of new hot and chilled water embedded networks should be banned.

This is a start, but to really make a difference for embedded network customers the remaining recommendations around the huge regulatory gaps and safety issues faced by many need to be addressed.

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