NSW Embedded Network Strata Law updates 1st July 2025 in 1 minute

Embedded networks are difficult at the best of times. Here is the minimum you need to know about the recent strata law changes which came into effect 1st July 2025...

Embedded networks traditionally refer to private electricity (microgrid) or hot water networks as pictured above. However, embedded network companies have started providing, high speed internet, EV charging infrastructure, solar, batteries, A/C, stormwater and even cold water networks to strata buildings.

Since September 2024, prices for electricity consumed through embedded networks has been capped, with embedded network providers unable to charge more than the median market price, as determined by IPART - the Independent Pricing and Regulatory Tribunal. More information from iPART is here.

On 1st July 2025, the Australian Consume Law Unfair Contract Terms Regime was updated.  A new Section 32A was incorporated into the Fair Trading Act which makes it unequivocal that the operation of the unfair contract terms regime (“UCT”) applies to both Owners Corporations and Community Associations. It logically follows that this gives protection to Owners Corporations and Community Associations dealing with unfair embedded network contracts. 

For utility agreements entered into after 1 July 2025, any embedded network electricity contract must expire by the first AGM (if signed beforehand as per s132A of the NSW Strata Schemes act.) or within three years if signed at the First AGM or shortly after the First AGM (FAGM). This rule now extends to other utility contracts involving water, gas, EV charging, stormwater systems... There will be no more situations where a developer signs an embedded electricity network contract for 10 years with an auto-renewal for another 10 years providing a near-effective monopoly to that embedded network provider. There will be a maximum of 3 years on any renewals of embedded network contracts moving forward.

Real estate agents selling properties in strata need to disclose embedded networks to potential buyers. This includes the type of services under embedded network contracts such as electricity, hot water, central A/C, EV chargepoints, solar, batteries etc

Strata Certificates in s.184 of the NSW strata legislation and & Section 174 of the Community Land Management Act 2021 will shortly be updated to require mandatory disclosure, including the contract terms of the embedded network and any special conditions. Strata managers (or secretaries in the case of self-managed buildings) will need to keep these strata certificates up to date.

The Conveyancing Act 1919 and Conveyancing (Sale of Land) Regulation 2022 are shortly to be amended regarding disclosure of exclusive supply networks in “off the plan” contracts. This will potentially give the purchase the ability to rescind the contract, if there is a change. chedule 2 of the Conveyancing (Sale of Land) Regulation 2022 to add an additional Item 23A adding the existence of an exclusive supply network to the list of adverse affectations, i.e. potentially giving the purchaser rescission rights if it is not disclosed in the contract.

Later this year, the Australian Energy Regulator (AER) will making a final recommendation on the feedback from its draft amendments to the Network Exemption Guideline and Retail Exempt Selling Guideline which was socialised in March 2025. This will cover areas such as 

• pricing rules.
• publication requirements relating to electricity tariffs and discounts as against local standing offers.
• regulator reporting requirements.
• disconnection safeguards.

Remember, in electricity embedded networks, individual residents have the “power of choice” to request to leave the embedded network and go “on market” and just buy electricity from any energy retailer at a competitive price. However,  hot water embedded networks don’t have an opportunity for individual lot owners to leave at all and they are stuck in the embedded hot water network without any ability to leave. Also, in NSW the Energy & Water Ombudsman (EWON) doesn't provide support to lot owners who live inside embedded hot water networks.