The Strata Community Association (WA) recently hosted an event to discuss the Draft Embedded Network Code of Practice (EN CoP), which is set to require Embedded Network Seller (ENS) registration by July 2025.

While the need for customer protections through the Code of Practice is clear, there are practical concerns about implementing some of the proposed requirements and their impact on the strata sector. As an industry advocate and supporter, we would like to share our thoughts around four key topics raised during the event.

Costs

Energy Policy WA has communicated that the costs associated with EN CoP compliance, including registration and management with the Economic Regulation Authority (ERA) and the Energy & Water Ombudsman, are considered a Cost of Business. These costs cannot be passed on to tenants through energy billing.

However, this structure may lead to hidden costs that owners will ultimately need to cover, likely through increased levies for strata complexes and variable outgoings in commercial properties. Currently, around 25% of administrative fund levies are spent on utility bills, and this percentage is expected to rise under the new regulations, though it will be less visible to the public.

Metering

Accurate measurement is essential for effective (property or strata) management. Energy Policy WA have indicated their intent to remove the clause from the draft EN CoP that allows lot owners/tenants to install sub-meters at their own expense. In the absence of meters, various methods are used to estimate consumption. Given the rising cost of living and the Code’s goal to protect consumers, we believe the fairest way to allocate energy costs is through precise measurement of individual usage.

Default Tariffs

The current default tariff model proposed by Energy Policy WA has issues, particularly with cross-subsidization. As energy costs rise for owners and strata schemes, the aligned tariffs for residents and tenants do not, potentially leading to financial losses for the schemes. We recommend developing a more appropriate on-charging model to address these concerns.

Contestable Threshold

The Draft CoP proposes that any lot owner consuming 50,000 kWh per year can enter the WA retail contestable electricity market. If WA electricity retailers are allowed to sell to tenants by lowering the contestable threshold, licensed electricity retailers will compete with Embedded Network Sellers (the strata schemes or property owners). This could complicate the market further and discourage investment in renewables by strata schemes and owners, counteracting the Government’s Energy Transformation Plan and net zero targets.

The regulations seem to favor third-party licensed retailers owning renewable assets within property boundaries, which could divert revenue away from property owners.

Conclusion

EnergyTec believes these key items within the draft EN CoP need further development before the Code is finalized. We encourage stakeholders to engage with the ongoing development process to ensure the final Code is practical and fair for all parties involved.

For more information you can view the full Draft Embedded Network Code of Practice at  Get involved in the Voluntary Embedded Networks Code of Practice (www.wa.gov.au)

or get in touch with the EnergyTec team for more information.