Maximum electricity prices in land lease communities for customers in an embedded network
In residential land lease communities, a community operator will own the land that a resident’s home sits on. Many land lease communities are supplied their electricity through an embedded network, which means that the operator also owns the network infrastructure like the wires within the community. In these cases, most customers will be unable to choose their electricity supplier and so there are rules about how much their operator can charge them for their electricity.
On 24 June 2024, legislative amendments were passed which will change the rules for how much customers in residential land lease communities can be charged for their electricity.
Under the new laws, community operators must charge less than or equal to the rates for the median market offer in your area. The new laws require IPART to determine what the median market offer is and advise the Commissioner of Fair Trading.
You can find IPART’s determination of maximum prices here. These prices will apply from 25 September 2024. To find out more about how we determine what the median price is, we have published a methodology paper.
These arrangements are likely to be an interim measure while the NSW Government finalises its Embedded network action plan.
IPART has conducted a broader review of how prices for all embedded network customers should be set
As part of the NSW Government’s Embedded network action plan, IPART made recommendations on how maximum prices should be set for all customers living in embedded networks. This includes people living in land lease communities, and also other customers such as those living in a new development.
We recommended that IPART would determine maximum prices based on the median of the lowest market offer from each retailer in that area. This is a different methodology to that set out in the new laws relating to residential land lease communities.
The NSW Government is currently considering IPART’s recommendations. If IPART’s recommendations are implemented, we expect that this would result in maximum prices that are on average 5% lower than the maximum price under the new laws for residential land lease communities.