Victoria bans integrated power grids in new unit blocks

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Victoria will ban private power grids in new apartment buildings in a bid to reduce soaring household energy bills and ensure residents are not trapped in costly deals.

The Andrews government announced the ban – a commitment ahead of the 2018 national election – on Tuesday following a recommendation from an expert advisory group.

On-board electrical networks serve multiple customers and are common in multi-dwelling complexes like apartment buildings, some nursing homes, social housing and caravan parks. They have been criticized for acting as a barrier to residents sourcing potentially cheaper energy.

Around half a million people across Australia are believed to buy power through integrated grids, according to the Australian Energy Market Commission, but the actual figure could be higher as there is no baseline. national data.

Related: ‘Prices are so much higher’: How apartment dwellers are locked into bad electricity deals

Consumer Action Law Center chief executive Gerard Brody – who sat on the independent panel that recommended the networks be removed – said he hoped Victoria could set a model for other states and territories.

“It’s a problem in every state, so hopefully the Victorian Reform sets a good example of what could apply nationally as well,” he told Guardian Australia.

In integrated networks, electrical wiring is arranged to allow landlords to resell power to tenants by bulk purchasing supply from a retailer or by generating power on-site.

Many in-vehicle network vendors do not require Australian authorization Energy regulator (AER) and often fall outside the scope of energy consumption law.

Brody said unregulated integrated networks have allowed an unfair business model to develop.

“It takes away consumer choice and customer protection and it has allowed this industry to grow and get stronger, which is why I think it took so long to turn around,” he said. declared.

“It’s a lesson in consumer protection regulation and the dangers of introducing exemptions, because businesses will take advantage.”

The ban will come into effect in January and will allow limited exemptions for buildings that run on 100% renewable energy. Existing networks will be reformed to allow households to access more competitive offers.

State Energy Minister Lily D’Ambrosio said the ban would ensure that the 140,000 Victorians supplied by integrated home networks had choice and could access competitive offers to help them save on their electricity bills.

“All Victorians deserve to get the same competitive energy deals and protections, lowering the cost of living when people need it most,” she said in a statement.

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In New South Wales, a parliamentary inquiry is investigating integrated networks to help reform the system.

The government said a second phase of the review of integrated networks would focus on determining a licensing regime for networks to ensure better consumer protection and access to energy deals. competitive.