Embedded Networks in New Zealand & Australia
What’s the Difference?
Tenco often gets asked about embedded networks from Australian property developers or clients with Australian based retail tenants. In the early days of electrical embedded networks in New Zealand, Tenco worked hard to ensure that networks established were beneficial to consumers – whether they be residents of a retirement village or large commercial tenants within a shopping centre.
As embedded networks in New Zealand approach their 20-year anniversary, the structure of embedded networks has been widely regarded as being both beneficial to property owners, as well as having minimal impact on consumers. Because of this reputation, many local and overseas property owners have come to trust Tenco to manage their embedded networks, even where they have made the decision not to proceed in other jurisdictions.
Embedded networks in Australia have a slightly longer and more complicated history. Most recently, this has culminated in regulatory powers stepping in to offer more protections to consumers.
Embedded Networks in New Zealand
Embedded networks in New Zealand were implemented in such a way that the embedded network owner is hands off, can capture income for distributing electricity over lines they own and importantly, not impact consumers within the property.
This is achieved by allowing electricity retailers to trade on embedded network connections just like they would on any other traditional connection in New Zealand. A simple agreement exists between the electricity retailer and Tenco. All regulatory, data flow and invoicing occur just like it would under normal market conditions.
In the early days of embedded networks, it was important to Tenco that there were no barriers for embedded network owners, like Westfield and Kiwi Property -- or their tenants. This approach allowed Tenco to establish lasting relationships with major property owners who are invested in property for extended periods of time. The same property owners want to make sure their tenants have a frictionless experience.
New Zealand Embedded Network Regulatory Framework
In New Zealand, embedded networks are regulated under the same framework as all other traditional connections within New Zealand. The Electricity Authority has control over embedded networks and are they are subject to the regulations within Part 6 and Part 12A of the Code. Tenco is audited annually by Electricity Authority approved auditors.
Benefits of Embedded Network in New Zealand
Consumers within an embedded network have the freedom to choose their own retailer;
Property owner(s) secure a recurring income stream;
Embedded network delivery pricing is price neutral for the consumer;
Metering and 3rd party services are delivered as they would be outside of an embedded network;
Tenco managed embedded networks operate under the Utilities Disputes regulations in New Zealand which promotes fair outcomes for consumers;
Meter ownership, certification and maintenance is managed by a third-party.
Embedded Networks in Australia
Unlike a New Zealand embedded network, the Australian comparable is not characterised by the same retailer freedoms and clear regulatory structure. An embedded network in Australia is most similar to what we call customer networks in New Zealand. While customer networks can be suitable in some situations, they can cause friction between consumers and network owners.
Australian Embedded Network Regulatory Framework
In Australia, rather than being governed by the national regulatory systems, embedded networks operate under the ‘Network Service Provider Registration Exemption Guideline’ or the ‘Retail Exempt Selling Guideline’.
In recent years, the Australian Energy Market Commission found that the embedded network structures and regulations were “no longer fit for purpose” and installed these new regulatory frameworks for embedded networks. To address concerns around monopoly electricity offerings, ‘default offer’ or ‘power of choice’ regulations were introduced to ensure the price of electricity supplied to consumers was not out of line with the market. In New Zealand, there is much more transparency around consumer pricing due to the connections being contestable and allowing the tenant to choose their own retailer.
Within the New Zealand market, overseas property owners are often pleasantly surprised at how Tenco can manage their embedded networks. Especially compared to the Australian embedded network environment, the New Zealand comparable leaves property owners at ease being that the arrangement is price neutral for tenants and network profits are paid out monthly.
Tenco manages embedded networks across retirement villages, apartment buildings, shopping malls, office buildings, commercial buildings and airports.
Schedule your private utility network assessment today.
0800 359 500
info@tenco-ebs.co.nz
