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Audit & Compliance

Under the Victorian Energy Efficiency Target Act 2007 (the Act), the Essential Services Commission (the commission) is responsible for monitoring compliance with the Act, the Victorian Energy Efficiency Target Regulations 2008 (the Principal Regulations) and the Victorian Energy Efficiency Target (Project-Based Activities) Regulations 2017 (the PBA Regulations). This includes undertaking periodic audits of the VEET-related operations of scheme participants.

Energy retailers that have a liability under the scheme (known as relevant entities) and accredited businesses that create energy efficiency certificates (known as Accredited Persons) are subject to different forms of audit. This page gives an overview of the compliance responsibilities of both. A detailed account of these responsibilities is contained in the explanatory notes at the bottom of the page.

This page also contains relevant information to firms interested in joining the audit panel established by the commission, with regards to VEET compliance activities.

Relevant entities

Annual energy acquisition statement

Relevant entities that make energy acquisitions under the Act are required to report their acquisitions for each calendar year in an audited annual energy acquisition statement, to be provided to the commission by 30 April of the following year. The statement, and a guidance paper to assist relevant entities to determine their acquisitions, can be downloaded from the bottom of this page.

Relevant entities must ensure that their statement or return is audited in accordance with the Victorian Energy Efficiency Target Guidelines (the Guidelines) before being submitted to the commission. For further information on the VEET scheme's audit process and requirements, please refer to Explanatory note - relevant entities: preparation and audit of annual energy acquisition statements available from the bottom of this page.

The commission has established a panel of approved VEET auditors. Relevant entities may (but are not required to) nominate auditors from the panel list to conduct audits of their annual statement.

Greenhouse gas reduction rates

The greenhouse gas reduction rates establish a relevant entity's rate of liability and therefore the number of VEECs they are required to surrender each year. There are separate greenhouse gas reduction rates for gas and electricity - RE referring to the greenhouse gas reduction rate for electricity, and RG being the greenhouse gas reduction rate for gas. Relevant entities determine their liability by multiplying the total liable electricity acquisitions for a year by the RE and the total liable gas acquisitions for a year by the RG.

For the 2017 compliance year (1 January to 31 December 2017) the RE factor is 0.14901 and the RG factor is 0.00752.

For the 2018 compliance year (1 January to 31 December 2018) the RE factor is 0.16222 and the RG factor is 0.00818.

Shortfall statement

Where a relevant entity surrenders insufficient certificates for a given year, the commission will issue a shortfall statement setting out the energy efficiency certificate shortfall penalty for which the entity is liable.

Pursuant to section 28(1) of the VEET Act, a relevant entity which has an energy efficiency shortfall in a given compliance year is liable to pay a pecuniary penalty to the Consolidated fund in the form of a shortfall penalty. The shortfall penalty is determined in accordance with section 28(2) of the VEET Act. The shortfall penalty rate for the 2017 compliance year is subject to a CPI calculation and is $46.72 per certificate. 

Audit panel members

The commission has established a VEET panel of approved auditors from which scheme participants may nominate to conduct audits of their annual returns or statements. The panel has been established to reduce the effort required to approve the auditor, as well as improving the timeliness of the auditing process. The VEET Audit Panel document is available below.  

Entities may apply for appointment to the VEET panel of auditors at any time. For further information on how to become an audit panel member, please refer to the Explanatory note - information for potential VEET audit panel members, available below. This document includes details about the information that a firm will need to provide the commission and the selection criteria against which they will be evaluated.

Entities wanting to be appointed to the panel will need to provide in-principle agreement to the terms and conditions of a standard tripartite deed before being appointed to the panel.

The Guidelines establishes the requirements for conducting audits under the VEET scheme. All applicants should be familiar with this document before applying to join the panel. Audit panel members will need to execute a tripartite deed in order to conduct an audit for the purposes of the VEET scheme. Under the terms of the tripartite deed, firms undertaking audits will have a primary duty of care to the commission.

Accredited Persons

Under the VEET scheme, an Accredited Person is obliged to keep records that substantiate:        

  • Details of all certificates created by the accredited person during the year;
  • The matters specified in the Guidelines as follows (Clause 13.1): 
    • the records referred to in clause 8.9 of the Guidelines (refer below) in relation to assignments of rights to create certificates;
    • sales, purchase and/or service records of each product or service which constitutes a prescribed activity for which certificates have been created, including make and model number if applicable, and the street address and postcode of the energy consumer; and
    • evidence of removal or destruction of existing products where removal or destruction is required by the Principal Regulations and/or the PBA Regulations.

An assignee must maintain (Clause 8.9):
  • a copy of the completed and signed form of assignment; and
  • evidence of the benefit provided to the energy consumer, for inspection and audit by the commission on request, for a period of at least six years after the date of the assignment; 

Accredited persons must also keep all records and statements of attainment relating to completion by their installers (whether employed directly or subcontracted) of the mandatory safety training units associated with Prescribed Activities 11,12,13,14,15,17, 21, 26 and 34.

These records must be kept for a period of six years after the associated VEECs are created.

Accredited Persons are subject to periodic audits by the commission to ascertain whether they have kept the necessary records and to confirm that they have created VEECs in accordance with the VEET legislation. This may include site audits to ensure that the prescribed activities undertaken have been carried out in accordance with the requirements of the Principal Regulations and the PBA Regulations.

The commission has developed a number of Explanatory Notes to help Accredited Persons understand and fulfil their audit and compliance obligations.  These Explanatory Notes can be accessed below.  

 


 Relevant Documents and Forms

All Scheme Participants

 Legislation

Victorian Energy Efficiency Target Act 2007
Victorian Energy Efficiency Target Regulations 2008
Victorian Energy Efficiency Target (Project-Based Activities) Regulation 2017
Victorian Energy Efficiency Target Guidelines

Relevant Entities

Explanatory Notes

Explanatory note - relevant entities: preparation and audit of annual energy acquisition statements
Explanatory note - relevant entities: calculation of scheme acquisitions

General

Annual energy acquisition statement for relevant entities (AEAS) 2017 
VEET audit panel

Accredited Persons

Explanatory Notes

Explanatory Note - Accredited Persons: Victorian Energy Efficiency Certificate (VEEC) Creation Audits
Explanatory Note - Compliance Requirements for Accredited Persons by Prescribed Activity
Explanatory Note - Field & Phone Audit Minimum Requirements for Prescribed Activities 15, 17, 21 & 29
Explanatory Note - Building Based Lighting Upgrade. Part 2: Compliance Requirements
Explanatory Note - Non-Building Based Lighting Upgrade. Part 2Compliance Requirements
Explanatory Note - Project-Based Activities - Measurement and Vertification. Part 2: Compliance Requirements

Audit Panel Members

Explanatory Notes

Explanatory Note - Information for Potential VEET Audit Panel Members

General

VEET compliance and enforcement policy - final decision
VEET compliance and enforcement policy
Tripartite Deed
 
 
3.60-0474