Amendments to the General Exemption Order (GEO)[1] made under s 17 of the Electricity Industry Act 2000 (Vic) (Act) will reduce the regulatory impost on government agencies who may wish to generate or supply renewable energy from their premises.

In its final review of the GEO[2], the Department of Environment, Land, Water and Planning recommended it be redrafted to:

  • establish registrable categories of exemptions; and

  • separate deemed and registrable exemption categories into specific activities.

The amendments to the GEO substantially align it to the framework applied by the Australian Energy Regulator (AER) in other states.

Section 16 of the Act requires a person who engages in the generation of electricity for supply or sale or the transmission, distribution supply or sale of electricity to hold a licence issued by the Essential Services Commission (ESC) unless otherwise exempt. A failure to comply with this requirement gives rise to significant financial penalties.

In broad terms, under the revised GEO, the previous exemption of three kinds of activities will continue:

  1. Small scale generation activities

  2. Intermediary distribution and supply of electricity

  3. Intermediary sale of electricity

Individual exemptions may still be obtained.

One of the amendments is that ‘Government agencies’ be deemed exempt from the obligation to hold a licence in respect of the following activities:

  • Retail – government agencies selling metered electricity to non-residential customers.

  • Network Services – government agencies supplying metered electricity to non-residential customers.

The exemption only applies if the Government agency is providing the metered electricity for a purpose which is ancillary to its primary functions or objectives under the laws which they are established. The amended GEO provides that ‘Government agency’ includes:

  • a Commonwealth, State or Local Government department;

  • a statutory authority or government owned corporations established under a Commonwealth or State or Territory law; and

  • a university, but not a housing authority or a provider of student accommodation.

In addition, an exemption for any person generating electricity for supply or sale where the total output is less than 30 MW has been added[3]. Generation, distribution, supply and sale of electricity under a small customer power purchase agreement would, however, continue to be exempt.

The government agency exemption provides opportunities for agencies to explore small scale site-specific generation, particularly utilising solar or solar and battery technology. As the cost of this technology decreases, this type of generation will become an increasingly important way for government agencies to reduce their electricity costs.

The revised GEO will come into operation on 1 April 2018.