Large Victorian energy retailers that have a liability under the VEET scheme are known as Relevant Entities. Under the Victorian Energy Efficiency Target Act 2007 (the Act), a Relevant Entity is a legal person who:
*scheme acquisition is defined below.
- sells either electricity or gas, or both electricity and gas, to customers; and
- makes a scheme acquisition* in connection with the sale of either electricity or gas, or the sale of both electricity and gas, to those customers; and
- has 5000 or more customers to whom either electricity or gas is, or both electricity and gas are, sold to in Victoria; or
- makes a scheme acquisition of 30 000 MWh or more of electricity; or
- makes a scheme acquisition of 350 000 GL or more of gas.
The role of Relevant Entities
The Act places an obligation on Relevant Entities to surrender a certain number of Victorian energy efficiency certificates (VEECs) each year. The number of VEECs a Relevant Entity must surrender represents a portion of the scheme's overall annual target and is a function of the share of the energy market that the Relevant Entity held in that year.
Relevant Entities must make their annual VEEC surrenders between 1 January and 30 April of the year following the year for which the liability is held. If a Relevant Entity fails to surrender a sufficient number of certificates, it must pay a penalty per certificate it falls short by.
It is at the discretion of the Relevant Entity whether it creates VEECs directly through engaging in energy saving activities (Prescribed Activities) on behalf of energy consumers, or whether it decides to purchase VEECs from VEET accredited businesses (Accredited Persons).
Each Relevant Entity must hold a VEET account.
The responsibilities of Relevant Entities
Annual energy acquisition statements (AEAS)
Relevant Entities must submit audited annual energy acquisition statements (AEAS), that detail the portion of the Victorian energy market they provide to. This portion is known as the Relevant Entity's 'scheme acquisition'. Under the Act, scheme acquisition is defined as the purchase for on-sale to prescribed customers in Victoria of electricity and/or gas from AEMO and/or gas from a producer, storage provider or interconnected pipeline operator. Prescribed customers are defined by section 12 of the Victorian Energy Efficiency Target Regulations 2008 (the Regulations). Actual and potential Relevant Entities are encouraged to review the Act and Regulations and to seek independent advice about their liabilities.
Annual energy acquisitions statements must be audited in accordance with the Victorian Energy Efficiency Target Guidelines and lodged with the Essential Services Commission (ESC) by 30 April each year. Annual energy acquisition statement forms and an AEAS Guidance Paper are available from the Audit & Compliance page, accessible via the left hand menu.
Greenhouse gas reduction rates
The greenhouse gas reduction rate establishes the rate of liability of a Relevant Entity and therefore the number of VEECs it is required to surrender each year. The Act provides for the setting of a greenhouse gas reduction rate for electricity (RE) and a greenhouse gas reduction rate for gas (RG).
To determine its VEET liabilities each year, a Relevant Entity needs to:
- determine their liability for their electricity acquisition by multiplying their total liable electricity acquisition (amount of electricity in MWh acquired under scheme acquisitions in the year) for the year by the RE, and/or
- determine their liability for their gas acquisition by multiplying their total liable gas acquisition (amount of gas in GJ acquired under scheme acquisitions in the year) for the year by the RG.
A Relevant Entity's VEET scheme liability for the year will be the sum of their electricity liability and their gas liability for the year.
A revised RE and RG is published in the Victorian Government Gazette before 31 May of the year that it applies to. If the RE or RG is not fixed and published before 31 May, then the relevant reduction rate for the previous year is used to determine liability in the given year. The RE for 2016 is 0.13111 and the RG is 0.00780. (For the 2017 compliance year the RE factor is 0.14901 and the RG factor is 0.00752).
Between 1 January and 30 April each year, Relevant Entities are required to surrender registered VEECs equivalent to their VEET scheme liability for the previous calendar year.
To meet their certificate liability for a given compliance year, Relevant Entities can use registered VEECs created up to 30 January of the following year. For example, VEECs created after 30 January 2013 cannot be used by Relevant Entities to meet their 2012 obligation but can be used to meet their 2013 compliance year liability. The Register of Victorian energy efficiency certificates (VEECs) on the website shows the month and year of creation for VEECs
To surrender VEECs, Relevant Entities must use the surrender function available through their online VEET account platform. Account holders experiencing difficulty using this function should contact VEET Support on (03) 9032 1310. No fees are payable for the surrender of VEECs. VEECs accepted for surrender by the ESC are marked as invalid due to surrender and are no longer available for trading in the VEET scheme.
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 2016 compliance year is subject to a CPI calculation and is $46.08 per certificate.
For details of the audit and compliance requirements relating to Relevant Entities, navigate to the Audit & Compliance page using the menu on the left.