Patrick

I work for an energy utility (we distribute electricity and retail gas and 
electricity, but don't generate electricity). Like most elsewhere in the 
world we've been progressively de-monopolised, and now have a situation 
where what our regulators call 'ring fencing' applies. For one simple 
example, our engineering arm can't know what prices the retail arm have 
offered a customer, because the engineering arm must bid on the open 
market to do installations, and knowledge of prices would give them an 
unfair advantage.

A similar situation exists in much of local government here in Australia, 
where public works have for several years been de-monopolised, and a local 
council's own engineering arm must compete on the open market to do kerbs 
and gutters etc.

Anyway, when it first came in, the regulator took a pretty tight line, and 
it looked as though we'd have to move business units to separate 
buildings, and I'd have to build walls down the middle of our two offsite 
warehouses, and separate what is in all the boxes. For a while it looked 
as though we'd have to totally separete IT as well. After a year or so 
rationality set in, and the regulators have accepted normal business 
practices as being reasonable (eg swipe card access controls, separate 
databases, security within our Trim system etc). We did have to do some 
forms redesign (the electricity installers need to know the customer's 
name and address, so the pricing details have to be on a separate part of 
the door-to-door selling team's contract forms). Business units were moved 
to segregated floors, and separate buildings (though much of this is in 
preparation for our being eventually privatised and sold off, wholly or in 
chunks). In many cases where engineering and customer services share a 
regional building,  front desk reception and shop front areas had to be 
rebuilt to separate the two functions physically (though some of this was 
also done to tighten up on the possibility of untrained staff or the 
public inadvertently accessing 'live' sites, where an engineering depot is 
also an electricity substation).

For the official line, check out the NSW Government IPART web site, a 
search under 'ring fencing' (not ringfencing) yields lots of hits:

http://www.ipart.nsw.gov.au/search/search_results.asp?sidebarSearchTextBox=ring+fencing

including the base document if you want to read it (it's big)

http://www.ipart.nsw.gov.au/files/Distribution%20Ring%20Fencing%20Guidelines%20-%20Final%20-19%20February%202003.doc.PDF

Cheers

Glenn

Glenn Sanders MRMA
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Australia

These views are mine alone. They may or may not be those of any
previous or present employers or clients. I don't know. If I'd asked
and they'd agreed, I would have signed it "Harry Peck and Co and
Glenn". Or whatever. But I haven't, so I didn't.


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