Independent tribunal recommended reforms to the NSW embedded network regime are now law

The law introduces price caps tied to market prices from July, requirements to sign up to an energy ombudsman scheme and significant fines for failure to comply with the new regulations.

The Energy Legislation Amendment Act was passed on 26 November 2025 and introduces new pricing powers, price caps aligned with the median of the lowest market offers, mandatory membership for embedded network operators in an approved ombudsman scheme and significant enforcement penalties for non-compliance with the reforms. IPART is empowered to determine the pricing from 1 July 2026.

Nick Li, an expert in energy at Pinsent Masons, said: “Embedded network operators, developers, strata managers and other entities that own residential and commercial embedded networks in NSW should ensure that they are compliant with these new laws and previous guidance from the Australian Energy Regulator.”

“Failure to do so can result in serious penalties and reputational damage,” he said.

“These reforms are an effort to ensure customers are receiving transparent information on the prices they pay and increased consumer protections. As a result, network operators must ensure they are aware of future pricing set by the IPART and are part of an approved ombudsman scheme.”

An embedded network is a private electricity network servicing multiple tenants within a single property, such as an apartment complex, retirement village or shopping centre. The property owner purchases electricity in bulk from a licensed retailer and then resells it to the individual tenants.

IPART undertook a comprehensive review of the future of embedded networks in the state and delivered a final report to the NSW state government in May 2024. The NSW government, supporting 36 of the 38 recommendations from IPART’s report, have incorporated the review into its embedded network action plan.

There are more than 95,000 households and hundreds of thousands of customers who live or operate within an embedded network throughout the state, according to the new South Wales government.