Report on the operation and administration of the Energy Efficiency (Cost of Living) Improvement Act 2012 for 2013-14

The Energy Efficiency (Cost of Living) Improvement Act 2012 (the EEI Act) creates obligations and arrangements known collectively as the Energy Efficiency Improvement Scheme (EEIS). The EEIS Administrator is appointed under section 23 of the EEI Act.

Section 27 of the EEI Act requires the Administrator to provide an annual report to the Minister on the operation and administration of the EEI Act including:

  1. National Energy Retail Law retailer compliance with the Act1 and
  2. the number and type of eligible activities undertaken under the EEI Act.

Administrator’s functions

The Administrator has the following functions:

  • to establish reporting and record keeping requirements for electricity retailers
  • to determine obliged retailers’ compliance with the retailers’ energy savings obligations
  • to approve acquisition of abatement factors
  • to approve codes of practice
  • to prepare annual reports
  • to report to the Minister, at the Minister’s request, on anything relating to the operation or administration of the EEI Act.

Change of Administrator

As a result of an internal restructure within the Directorate, Alan Traves, Executive Director, Policy, was appointed by the Minister as Administrator of the EEIS from 19 May 2014. Prior to this, John Meyer, Executive Director, Regulation and Services, was Administrator.

The Administrator is supported by an administration team. During the year, this team was relocated from the Regulation and Services Division of the Directorate to the Policy Division of the Directorate.
The team includes two administration officers and a team manager.

Legislative changes

In 2013–14 the Administrator oversaw updates to legislative instruments under the EEIS legislation to support the expansion of the EEIS to business premises and new eligible activities and to set the Priority Household Target (PHT) for the compliance period 1 January 2014 to 31 December 2014.

Changes to the EEI Act were made in the first half of 2014 by the Construction and Energy Efficiency Legislation Amendment Act 2014 and the Construction and Energy Efficiency Legislation Amendment Act 2014 (No 2). These changes were to:

  • make the process for determining eligible activities under the EEI Act effective and ensure that any resultant instrument is enforceable
  • provide clear processes for retailers to follow when reporting annual compliance with the EEI Act and a suitable regulatory framework for eligible activities
  • insert a power for the Administrator to delegate their function to a public servant, consistent with the powers of other statutory office holders
  • allow for the exclusion of activities for a retailer’s energy savings result that were undertaken before the mandatory lodgement of compliance plans or that were not undertaken in accordance with a code of practice (reviewable decision)
  • provide for the sharing of information between relevant regulatory entities that administer requirements related to the operation of electricity retailers under the EEI Act and improve general information gathering powers
  • allow for powers to require rectification of things that pose a risk to people, property or the environment, enforcement of codes of practice and restriction of the operation of the retailers and their agents on grounds of public safety
  • clarify that an assessment of compliance for a particular year can be revised up to five years after the end of the compliance period to which it relates if information on which the assessment is based is incorrect or activities counted towards the acquittal are found to be non-compliant after the completion of the assessment
  • remove the unused definition of ‘auditor’ in the EEI Act and insert an ability for the Administrator to make codes of practice in relation to auditing of compliance period reporting and the appointment of auditors.

Complaints

One complaint about an electricity retailer’s services, provided under the EEIS, was received by the Administrator, which was resolved in coordination with the retailer.

Training

Before an electricity retailer or authorised installer can undertake eligible activities, they must undertake training on the EEI Act, the EEIS and the individual activities they will be undertaking. The training is provided by the EEIS officers. In 2013–14, 89 authorised installers received general EEIS induction training as well as training on obligations for activities: 1.1 – Building sealing activities; 4.1(a)-(c) – Installing a low energy general lighting service lamp, a low energy reflector lamp or a low energy lamp; 5.5 – Installing a standby power controller; and 5.1 – Decommissioning and disposal of pre-1996 refrigerator or freezer.

Review

Part 7, Section 55 of the EEI Act requires that the Minister commence a review of the operation of the EEI Act in January 2014. The review must consider:

  1. the future operation of the Act after 2015
  2. any change required to improve the operation of the Act
  3. the most appropriate funding mechanism for the future
  4. the operation of the EEI Act in the context of energy efficiency schemes operating in, or introduced for, the Commonwealth or another state or territory.

A copy of the review must be presented to the Legislative Assembly not later than nine months after it commences. The review is currently being completed by consultants Jacobs SKM, as overseen by the Administrator. The review is expected to be presented to the Legislative Assembly in late 2014.

Retailer compliance with energy savings obligations

Compliance with energy savings obligations for a compliance period is determined at the end of that period. The first compliance period for the EEIS operated from 1 January 2013 to 31 December 2013.

There are two tiers of electricity retailers under the EEIS. A Tier 1 electricity retailer is an electricity retailer with at least 5,000 customers in the ACT who sells at least 500,000 MWh of electricity to customers in the ACT within the compliance period. A Tier 2 electricity retailer is a retailer that is not a Tier 1 retailer. There was only one Tier 1 retailer, ActewAGL Retail, in the first compliance period. There were ten Tier 2 retailers in this period.

EEIS requires retailers to undertake eligible activities in order to meet an energy savings target or Tier 2 retailers may elect to pay an Energy Savings Contribution (ESC) in place of undertaking activities.

All Tier 2 retailers elected to achieve 100% of their obligation under the Act by paying an ESC and met their obligation. The value of ESCs collected totalled $2.27 million in relation to the 2013 compliance year.

The Act requires that funds raised must be used in accordance with the Objects of the Act. These funds will be expended through the ACT Budget process to support energy efficiency related activities in the future.

Eligible activities and GHG abatement

Information on eligible activities undertaken by retailers under the EEIS is collected on a quarterly basis by the Administrator. These activities are subject to annual compliance reporting, verification and reconciliation against targets at the completion of a compliance period (noting compliance periods operate in calendar years).

The eligible activities reported as having been undertaken in the period 1 July 2013 to 30 June 2014 are summarised in the table below.

Activities reported for the period 1 July 2013 to 30 June 2014
Activity Description No. of installations

1.1 (c)

Building sealing – installation of fixed sealing to one or more of each unsealed edge of an external door

15,445

4.1 (a)

Lighting activities – installing a low energy general lighting service lamp

208,484

5.5 (a)(b)

Install a standby power controller in an audio visual environment or in an information technology environment

42,513

5.1

Decommissioning and disposal of pre-1996 refrigerator or freezer

351*

Total

266,793

* Data available only for the period to 4 June 2014

Each activity has an abatement factor that is based on deemed greenhouse gas emissions reductions in tCO2-e. This represents the abatement an activity is expected to achieve in its lifetime. Abatement factors will differ from activity to activity.

The claimed abatement for all activities in the period 1 July 2013 to 30 June 2014 is 231,875 tCO2-e. There were 73,697 tCO2-e claimed for priority (low-income) households, exceeding the 25% Priority Household Target set under the EEIS.

Electricity retailers may apply for an acquisition of the abatement factors generated by eligible activities undertaken by another retailer. No applications for the acquisition of abatement factors were received in 2013–14.

Participating households

From 1 July 2013 to 30 June 2014 23,527 households are reported as having received activities under the EEIS. Of these 7543 households were priority (low-income) households.

The information contained in this report has been approved by Alan Traves, Administrator under the Energy Efficiency (Cost of Living) Improvement Act.

Further information may be obtained from:
Ms Megan Ward
Manager, Energy Efficiency Improvement Scheme
Telephone: 02 6207 8022
Email: ESDD-EEIS@act.gov.au

1 All people that hold a retailer authorisation under the National Energy Retail Law (ACT) Act 2012 and sell electricity to premises in the ACT for consumption have an energy savings obligation under the Act.