Nexa Advisory welcomes the opportunity to contribute to the CitiPower, Powercor, and United Energy (CPU) Ring-fencing waiver consultation for Kerbside EV Charging Infrastructure being undertaken by the Australian Energy Regulator (AER).
Nexa has recently worked with several retailers, EV Charging Infrastructure (EVCI) providers and innovative consumer energy providers in addressing the barriers to competitive delivery of these services, building on our previous work in unlocking Consumer Energy Resources (CER). We consider that a key outcome of the EVCI buildout is to prioritise user experience and meeting the needs of EV drivers and charging customers.
The ring-fencing framework is intended to protect consumers against discrimination and cross-subsidisation by regulated monopoly Distribution Network Service Provider’s (DNSPs) — and is currently being eroded by waivers granted by the AER for community batteries and EVCI.
Nexa Advisory does not support the CPU ring-fencing waiver to directly own and maintain 100 kerbside EV chargers. We consider that there is no evidence of market insufficiency; the level of competitive Charging Point Operator (CPO) providers demonstrates clearly there is no market failure, but rather that these providers face challenges in delivering these solutions.
Key recommendations
Rather than allow the continued erosion of ring-fencing provisions – which are intended to maintain competition – we urge the AER to:
- uphold and reinforce ring-fencing obligations to ensure that regulated DNSP businesses cannot own EVCI and other assets which can be delivered competitively;
- monitor and enforce ring-fencing provision and the behaviour of DNSPs and affiliated businesses – including and not limited to whether affiliated businesses and third parties are treated equally when connecting to the distribution network; and
- cease the consideration of further waivers until it assesses the impact of those already granted. This would allow time to assess the effectiveness of these models before further waivers are granted, such as for public EV charging.
The AER should be focused on the performance of DNSPs with regard to connections. In addition to the above recommendations to improve the regulatory framework, there are several practical actions which the AER should take to improve the competitive delivery of these solutions:
- strengthen network data transparency obligations, requiring DNSPs to publish network data relevant to hosting capacity, congestion and constraint locations to level the playing field for competitive third-party providers – as well as within infrastructure planning undertaken by local councils and community groups.
- streamline grid connections and reduce cost for new parties connecting to the network by developing standardised, transparent connection timeframes for DNSPs in negotiating Service Level Agreements (SLA) with connecting parties.
- Develop tariffs that recognise smart infrastructure, undertaking reform to enable: innovative tariffs such as energy-only charges for new, low utilisation sites; solar soak incentives; and load control incentives during critical events. Innovative tariffs should be available for both low and high utilisation sites.
Read our submission here: Nexa Advisory – AER CPU Waiver submission