AUSTRALIA Law and Practice Contributed by: Alexander Danne, Roy Groom, Rohit Venkat and Georgia Summerhill, Clayton Utz
• hours of construction restrictions in residential areas. Ongoing compliance obligations are imposed under both planning approvals and state electrical safety legislation. DNSPs must maintain assets in accord- ance with NER service standards and report annually to the AER on network performance. State safety reg- ulators (such as Energy Safe Victoria, the Office of the Technical Regulator in South Australia, and Electrical Safety Office in Queensland) oversee compliance with electrical safety standards and may conduct audits or investigations. The amendment process for distribution approvals mirrors that for other infrastructure: modification appli- cations are lodged with the relevant planning authori- ty, with the scale of reassessment proportionate to the significance of the change. For distribution, modifica- tions are generally simpler and faster to obtain than for transmission, given the smaller scale and more contained impact of most distribution projects. 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities Distribution entities hold compulsory acquisition and easement powers under substantially the same state legislative frameworks as transmission entities (see 3.4 Eminent Domain, Condemnation and Expropri- ation Rights to Construct and Operate Generation Facilities and 4.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities ). In practice, the powers are exercised less frequently for distribution than for transmission given the typically narrower easement requirements and smaller scale of infrastructure. Compensation is assessed on the same just terms basis. Negotiation remains the pre- ferred approach, with compulsory processes reserved for cases where agreement cannot be reached. Native title and Aboriginal cultural heritage obligations apply equally. 5.5 Monopoly Rights for Electricity Distribution Entities Electricity distribution entities in Australia hold geo- graphic monopoly franchises over their defined ser-
vice areas. These exclusive rights are established through state legislation and licensing frameworks, with each DNSP authorised to own and operate the distribution network within its designated territory. The monopoly is economically regulated by the AER through five-yearly distribution determinations under NER Chapter 6, which set the maximum revenue each DNSP may recover. This incentive-based regulatory framework is designed to replicate the disciplines of competition by rewarding efficiency and penalising underperformance, while ensuring customers are not exposed to monopoly pricing. Exempt Networks and Competition at the Margin While DNSPs hold geographic monopoly over the shared distribution network, several forms of compe- tition operate at the margins, as follows. • Embedded networks (in shopping centres, retire- ment villages and apartment complexes) may operate under AER network exemptions, allow- ing private operators to supply electricity within a defined premises without holding a full distribution licence. • Contestable metering, which was introduced in 2017, removed the DNSP monopoly over metering services for new and replacement installations. • Stand-alone power systems (SAPS) represent an emerging alternative, with AEMC rule reforms ena- bling DNSPs to offer off-grid supply where this is more efficient than traditional network extension. • Behind-the-meter generation and storage increas- ingly allow consumers to reduce their reliance on the shared network. The AEMC continues to consider broader reforms to distribution market models, including the role of DNSPs as distribution system operators and the inte- gration of distributed energy resources into network planning and operation. In Western Australia, two state-owned entities are responsible for electricity distribution: Western Pow- er, which holds the distribution monopoly across the SWIS, and Horizon Power, which services regional and remote areas under a separate licence.
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