Cost of electricity from an embedded network – a valid concern

The majority of residents we have spoken with are paying well above the amount needed to cover the operator’s electricity account. If you are receiving electricity from an embedded network you could try to negotiate a better deal with the operator or third party supplier.

The provisions in the Residential Land Lease Communities Act 2015 (RLLC Act), sets the maximum charges using Independent Pricing and Regulatory Tribunal (IPART) interim methodology for determining the ‘median market offer’. Therefore the operator or third party supplier could apply a more affordable pricing formula that still covers the cost of their bill instead of defaulting to the higher IPART median retail market offer.

The 2021 statutory review and the second reading speech for the latest amendments to the RLLC indicate that the current provisions for electricity charges from an embedded network were not intended to be a long-term solution.

In April 2024, IPART prepared a report for the NSW Government on embedded networks containing 38 recommendations for improving consumers outcomes and price protections.

In their report IPART recommended that the methodology for determining the ‘median market offer’ should be based on the lowest offers for supply and usage charges by active retailers. IPART estimates that this methodology would result in an average saving of between 9-12% than the current legislated maximum charges imposed under the RLLC Act.

IPART’s report on the future of embedded networks in NSW has finally been considered.

The government has developed an Embedded Network Action Plan and accepted 36 out of the 38 recommendations. We will update our subscribers soon on the NSW Government’s response to the IPART report, which is expected to be released on IPART’s website this month (October 2025).

Current provisions on electricity must be reviewed

The 2024 amendments around electricity charges will be investigated and reviewed by the Minister within 3 years of their commencement and within 4 years they must report the outcome of the review to each House of Parliament.

For the review, home owners and tenants may find it helpful to retain documents which have details about their metered charges or details of electricity charges at the operator’s parent meter. Under the RLLC Act:

• The operator or third-party supplier must give you reasonable access to utility bills and other documents relating to the utility charges you pay.
• You must also be given a copy of the operator or third-party supplier’s bill (or charges) at least once a year.
• The Operator or third party supplier also have obligations to ensure they are receiving the best offer under their supply contract by conducting a review every two years (or before the end of their contract for longer contracts). Before signing a new supply contract, they must give you written notice comparing it to at least one other retailer’s offer.