The roll-out of the National Energy Retail Law (NERL) has been occurring across Australia over the past few years. Currently, the ACT, NSW, Queensland, South Australia and Tasmania have adopted and implemented the law. Victoria, Western Australia and the Northern Territory remain out of the regime for the time being.

Until recently, universities located in States/Territories where the NERL applies had been at risk of requiring an energy retailer authorisation, or a bespoke exemption, if they sold electricity or gas to tenants/third parties in an embedded network.

An embedded network is an internal electrical network within a building, a site or a campus, across which the university sells electricity to tenants or third parties (ie. the tenants/third parties do not purchase electricity from an external electricity retailer, instead they buy it from the university).

However, the Australian Energy Regulator (AER) has recently released an updated version of its Retail Exempt Selling Guideline which makes it clear that universities have the benefit of a deemed (ie automatic) licensing exemption under the NERL in relation to the sale of metered energy to tenants, other than in relation to student accommodation centres.

What does this mean for universities?

  1. Putting aside student accommodation (which is separately discussed below), if the university sells metered energy to tenants at a site, it will be deemed (without having to make an application or do anything further) to be exempt from the requirement to have to obtain a retailer authorisation under the NERL for that site.
  2. However, this deemed exemption is given on the standing conditions that the university:
  • gives an energy disclosure statement (meeting the AER's mandatory requirements) to its 'embedded' energy tenants;
  • supplies energy to those tenants in accordance with the AER's mandatory supply terms and conditions; and
  • considers whether it needs to obtain an electricity network exemption under separate guidelines issued by the AER under the National Electricity Law, in relation to the operation of an internal electricity network within a premises, centre or campus.

So, although the new retail exemption is a welcome development, it does not mean that universities can completely ignore the NERL.

Instead, if not already done so, universities will need to update their standing leasing packages to incorporate the AER's disclosure statement and mandatory energy sale/supply terms. They should also consider whether they have the benefit of an automatic electricity network exemption or, alternatively, whether they have to register to take the benefit of a class exemption, for their on-site electricity infrastructure.

In relation to student accommodation, if tenants in the centre buy energy from the university (as a landlord) rather than from an external energy retailer, then the university may have to register online with the AER to obtain a class exemption, depending on the number of tenants in the centre (the test applies on a per-site basis). If there are ten or more tenants in the student accommodation, the university will have to register the site with the AER via an online portal , in order to obtain the benefit of a class exemption for the site. An automatic licensing exemption applies for student accommodation centres with few than ten tenants. However, in both cases, the requirements outlined above will also apply in relation to the student accommodation centre.

The new version of the AER's Retail Exempt Selling Guideline also provides a useful new exemption class for electricity sale arrangements for on-site solar generators.