AER ring-fencing issues paper 

PIAC lodged a submission to the Australian Energy Regulator’s (AER) issues paper on changes to network ring-fencing guidelines for Stand-Alone Power Systems (SAPS) and energy storage systems like batteries. 

PIAC supports the use of ring-fencing exemptions for DNSP-led SAPS given our concerns the AEMC’s proposed model and the separation of the generation and network components of a SAPS compromises the practicality and workability of the reforms. The potential harm arising from DNSPs providing the generation component of a SAPS is trivial compared to the potential harm (to both the quality of supply received by the customer to be transitioned to a SAPS and network costs for all customers) from not being able to efficiently transition customers to SAPS. 

PIAC considers a combination of generic exemption thresholds and exemptions for specific circumstances represents a practical and pragmatic solution. We propose using an exemption to allow DNSPs to earn revenue from SAPS up to a specified percentage of their total revenue cap.