The legislation behind the REES

The REES has been established by Part 2AA of regulations to the Electricity Act 1996 and Gas Act 1997. These regulations make the requirement to meet REES targets a condition of an energy provider's licence to sell electricity in South Australia.

These regulations make the requirement to meet REES targets a condition of an energy provider’s licence to sell electricity and gas in South Australia.

Only those energy providers who supply more than 5,000 residential customers in South Australia are obliged to meet REES targets at this time.

Targets

There are two types of targets under the REES. These are:

Energy providers are required to save a set number of tonnes of carbon dioxide equivalent or tCO2-e. They must do this by implementing energy efficiency measures in households.

The Minister for Energy has the task of setting the overall targets for the REES each year. These are then allocated to each obliged energy provider by ESCOSA. How big an energy provider’s individual target is depends on how many residential customers they have and how much electricity and/or gas they sell.

The Minister for Energy has set targets for each of the next three years. These are:

ESCOSA has allocated these targets to the obliged energy providers for 2009 as follows:

Energy saving measures - existing and new

Energy providers meet their greenhouse gas reduction targets by implementing energy saving measures in households.

They must choose which energy savings measures they will implement from a list which has been specifically prescribed for the REES.

Each of these measures has a “deemed value” which represents how much energy is saved, and therefore how many tonnes of greenhouse gases are saved, if it is implemented in a typical South Australian household. These values have been determined by extensive research.

To claim the “deemed value” of a measure towards their target, energy providers must make sure they, and their contractors, meet the minimum requirements for each measure.

• Download the list of energy saving measures, “deemed values” and minimum requirements.

The list of energy saving measures is constantly evolving. With new technologies, changes in regulatory requirements and standards, new research and changing trends in appliance mix and energy use in households, the list must be monitored to ensure it remains relevant and continues to encourage the most cost-effective way to save energy in our homes. 

ESCOSA has the task of monitoring, reviewing and modifying the list of energy saving measures (including their deemed values and minimum requirements).

The Minister for Energy has set a “Protocol” for ESCOSA in how it does this, and what it must take into account.  Part of this Protocol requires that the current list of energy saving measures must remain available for the first three years of REES (2009 to 2011). This is to provide some commercial and planning certainty for energy providers in meeting their targets.

However, ESCOSA is able to add new measures to the list at any time. It must do this in accordance with the Protocol set by the Minister for Energy.

Anyone can make a submission to ESCOSA to add a new measure. However, you need to be aware that in making a submission, you may be required to provide research and other information which substantiates how much energy and greenhouse gases are likely to be saved, and what the minimum requirements should be to achieve those savings.

Visit the ESCOSA website for further information. From time to time, ESCOSA may also issue further guidance on energy saving measures to assist energy providers and contractors in understanding the specifications. These will be available from the ESCOSA website.

Energy audits

Energy providers must comply with minimum requirements in undertaking energy audits in low income households. These include ensuring that the auditor is a “competent person”.

Energy audits are required to be conducted in the home, with the auditor working actively with the household to help them understand how they use energy. In very limited circumstances, primarily in non-metropolitan areas, the energy provider may carry out the audit by phone or by interview.

• Download the minimum requirements for energy audits.

 Compliance, banking and penalties

ESCOSA is the scheme administrator for the REES. It has issued a "REES Code" which imposes various record keeping, reporting and other compliance requirements on energy providers for the purposes of the scheme. This includes requirements for the household to sign-off that the activity and/or audit has occurred in their home and to ensure households have access to complaints and dispute resolution mechanisms. Visit the ESCOSA website to find out more about the "REES Code".

Energy providers are able to "bank" an unlimited number of credits towards their targets. This means that if a retailer delivers energy saving measures and/or energy audits in excess of their targets in any one year, they can carry those "credits" over to help meet targets in subsequent years.

An energy provider faces a penalty if it does not meet its targets in any year of the REES. This is determined by ESCOSA. The penalty amounts are:

•  a base penalty amount of $10,000 for a REES shortfall applicable to each target 
•  a shortfall penalty of $500 per energy audit not achieved and a “make good” provision 
•  a shortfall penalty for greenhouse gas reduction target of $70 per tonne of CO2-e 
•  a shortfall penalty for greenhouse gas reduction target in priority groups of $70 per tonne of CO2-e

The REES penalty regime was established through amendments to the Electricity Act 1996, Gas Act 1997 and their Regulations.