Embedded Electricity Networks in Apartments: Are You Paying Too Much for Power?

Two neighbours. Same building, same apartment size, roughly the same usage habits. One pays $180 a month for electricity. The other pays $130. Neither has solar panels. There's been no change in usage. The difference is that one of them is in an embedded electricity network - and they've never been told.

Embedded electricity networks exist in thousands of Australian apartment buildings, and most residents don't know they're in one. The bill arrives with an unfamiliar logo, you pay it, and that's the end of the interaction. What most people don't realise is that without competition and without the ability to switch providers, embedded network operators have historically been able to charge prices that sit above what the open market would offer.

That's about to change - at least in New South Wales. Two significant reforms rolling out in 2026 will, for the first time, give embedded network residents mandatory disclosure rights and regulated pricing protections. If you own or rent in an apartment building, it's worth understanding how these systems work and whether you're affected.

If your body corporate fees already feel high, use our fee comparison tool to benchmark your building against similar properties in your suburb.

What Is an Embedded Electricity Network?

In a standard residential electricity arrangement, each apartment has its own connection to the grid, its own account with a retailer of their choosing, and complete freedom to shop around for a better deal.

An embedded network works differently. The building owner - or an operator they appoint - installs a private electricity network behind the meter of the building's main grid connection. That operator purchases electricity wholesale from the grid, then on-sells it to individual apartments through sub-meters inside the building.

The structure was originally designed to allow buildings to share infrastructure costs and pass on the savings of bulk purchasing. For buildings with significant shared energy use - lifts, underground car parks, heated pools, large common area lighting - there's a genuine efficiency argument for it. Buy electricity in bulk, distribute the savings to residents.

In practice, the savings don't always flow through.

Why Residents Often Pay More

The fundamental problem is competition - or more precisely, the absence of it.

When you're on a standard electricity plan, you can call your retailer and threaten to switch. Or actually switch. Retailers compete for your business, and that competition keeps a lid on what they can charge.

In an embedded network, you typically can't switch. The embedded network operator is your only option for electricity at that property. If they set prices above what you'd pay on the open market, your choices are pay or go without.

Historically, protections for embedded network customers in Australia have been patchy. The Australian Energy Regulator (AER) sets a ceiling price - the maximum embedded network operators are permitted to charge - but that ceiling has sometimes been set above the median market offer. Operators can legally charge more than you'd pay if you actually had a choice of provider.

Add to this the fact that many residents simply don't know they're in an embedded network. They assume the bill is their electricity bill and pay it. The lack of transparency compounds the pricing problem.

The NSW 2026 Reform Package

New South Wales is introducing two changes that directly address the embedded network problem.

April 2026: Mandatory Disclosure

From April 2026, the embedded network status of a property must be disclosed in strata disclosure documents and when a property is sold. If you're buying an apartment in an embedded network, the vendor will be legally required to tell you before contracts are exchanged.

This matters for buyers because an embedded network affects your energy choices for as long as you own the property. It affects your ability to benefit from solar, battery storage, or competitive retail electricity offers. Knowing upfront lets you factor it into your decision - and your price negotiations.

For existing residents, the disclosure requirement starts to shine a light on a system that has operated largely in the dark. Once residents know what they're in, they're better placed to ask questions about whether they're being charged appropriately.

July 2026: IPART Pricing Regulation

From July 2026, the Independent Pricing and Regulatory Tribunal (IPART) takes over pricing regulation for embedded networks in NSW. IPART's mandate is to ensure that embedded network customers pay no more for electricity than comparable customers on the open market.

This is the more consequential change for current residents. Rather than a ceiling price set without clear reference to what the competitive market is offering, IPART-regulated pricing will be anchored to open-market retail benchmarks.

If IPART's approach in other regulated sectors is any guide - water, public transport, gas - the result should meaningfully reduce the gap between what embedded network customers pay and what they would pay if they could choose their own retailer.

Related: Body Corporate Insurance Crisis: Why Premiums Doubled Since 2019 - another area where apartment owners are paying more than they should be.

How It Works in Other States

NSW's 2026 reforms are the most specific and time-bound in the country, but the embedded network issue isn't confined to NSW.

Victoria: The Essential Services Commission (ESC) regulates embedded networks under the Electricity Industry Act. Operators must hold an exemption from the AER and comply with the exempt seller framework. Consumer protections exist, but Victoria hasn't announced the kind of mandatory sale disclosure and independent pricing body that NSW is implementing.

Queensland: The Queensland Competition Authority (QCA) has been reviewing embedded network pricing. Queensland has a significant stock of apartment buildings and retirement villages using embedded network arrangements, and consumer groups have been pushing for stronger protections.

South Australia and Western Australia: Both have embedded network regulations under their respective energy frameworks, but neither has announced reforms comparable to NSW's 2026 package.

Nationally: The AER administers the exempt seller framework under the National Electricity Rules, which applies across states. It sets a price ceiling for embedded network operators, but the ceiling has not always been competitive with open-market offers. AER has been progressively tightening the exempt seller framework, and the NSW changes may accelerate national momentum for reform.

How to Tell If Your Building Has an Embedded Network

A few things to look for:

Your electricity bill comes from an unfamiliar name. If the company billing you isn't one of the mainstream retailers - AGL, Origin, EnergyAustralia, and their known sub-brands - you may be dealing with an embedded network operator or their authorised representative.

You've never been able to choose your electricity retailer. If the question of switching electricity providers has simply never been relevant to you at this property, that's worth investigating. Most apartment residents with a standard connection can switch; embedded network residents generally can't.

Your meter is inside the building. Embedded networks typically use sub-meters inside the building to measure each apartment's consumption, with the main connection metered at the property boundary.

The strata search or body corporate documents reference electricity supply arrangements. If the body corporate is involved in managing electricity billing for individual lots, that often indicates an embedded network structure.

From April 2026 in NSW, the disclosure documents will tell you clearly. Before then - and for buyers in other states - ask the strata manager or selling agent directly. If they hesitate or don't know, that's worth following up.

What Residents Can Do Now

If you're currently in an embedded network and concerned about what you're paying, here are some practical steps.

Request a rate comparison. Ask your embedded network operator for a breakdown of the tariff structure they're applying - the rate per kilowatt-hour, any daily supply charges, peak/off-peak arrangements. Then use a comparison website (like Energy Made Easy at energymadeeasy.gov.au) to see what you'd pay with a standard retailer on comparable usage in your postcode.

Check the AER's exempt seller register. The AER publishes a register of organisations approved to operate embedded networks under the exempt seller framework. If your operator isn't listed, they may be operating outside the regulatory framework - worth flagging to the AER.

Lodge a complaint with your energy ombudsman. If you believe you're being overcharged, contact your state's energy ombudsman:

• NSW: Energy and Water Ombudsman NSW (EWON) - ewon.com.au
• VIC: Energy and Water Ombudsman Victoria (EWOV) - ewov.com.au
• QLD: Energy and Water Ombudsman Queensland (EWOQ) - ewoq.com.au
• SA: Energy and Water Ombudsman SA (EWOSA) - ewosa.com.au

For buyers: From April 2026, ask for explicit disclosure of embedded network status before you sign contracts in NSW. In other states, ask directly - and if the building has an embedded network, request a copy of the supply agreement and compare the rates to what you'd pay on the open market.

Related: Is Your Strata Manager Taking Secret Commissions? - embedded networks are one of several areas where transparency in apartment building costs has historically been lacking.

Key Takeaways

• Embedded electricity networks exist in thousands of Australian apartment buildings. Most residents don't know they're in one.
• Residents in embedded networks typically can't switch electricity providers, which has allowed operators to charge above open-market rates without competitive pressure.
• NSW is introducing mandatory sale disclosure from April 2026 - buyers will be told if a property is in an embedded network before contracts are exchanged.
• IPART pricing regulation from July 2026 will cap embedded network pricing against competitive market benchmarks in NSW.
• If you suspect you're overpaying, compare your rates to market offers, check the AER's exempt seller register, and contact your state's energy ombudsman.
• Buyers in all states should ask directly about embedded network status before purchasing - this affects your energy costs and choices for as long as you own the property.

Compare body corporate fees across Australia at BodyCorporateFees.com.

This article is for informational purposes only and should not be considered legal or financial advice. Energy regulations change frequently - check with your state energy regulator or ombudsman for the most current protections and processes in your jurisdiction.