The Australian Energy Regulator (AER) is a constituent part of the Australian Competition and Consumer Commission (ACCC). It was established under Part IIIAA of the Trade Practices Act 1974 and operates as a separate legal entity.
The AER regulates the wholesale electricity market and is responsible for the economic regulation of the electricity transmission and distribution networks in the national electricity market (NEM). The AER is also responsible for the economic regulation of gas transmission and distribution networks and enforcing the national gas law and national gas rules in all jurisdictions except Western Australia.
In Western Australia, the AER does not perform regulatory functions relating to the gas or electricity markets. In the Northern Territory, the AER has not be empowered to perform functions relating to the electricity market. The AER will also regulate retail markets (other than retail pricing) in all states except Western Australian and the Northern Territory.
The AER may acquire additional functions in the future under state and territory laws, in accordance with inter-governmental agreements.
The principal functions of the AER in relation to electricity networks include:
making electricity transmission and distribution regulatory decisions
developing and publishing service standards to be applied to electricity transmission and distribution networks
making and amending guidelines for the ring-fencing of operations and information flows between activities, or within a business, of a regulated entity
promulgating the regulatory test referred to in the National Electricity Rules (the Rules)
enforcing the National Electricity Law (the Law) and the Rules made under that Law and investigating and bringing proceedings in connection with any breaches.
Functions formerly performed by the National Electricity Code Administrator relating to changes to the Rules (formerly the National Electricity Code) have been transferred to the Australian Energy Market Commission (AEMC). The Ministerial Council on Energy (MCE) is responsible for policy oversight of the Australian energy market.
From July 1 2008, the AER became the economic regulator for covered natural gas transmission and distribution pipelines in all states and territories (except WA).
The AER's functions and powers in relation to the economic regulation of covered gas transmission and distribution pipelines include:
approval of certain access arrangements required to be submitted by service providers under the National Gas Law and National Gas Rules
review of annual reference tariff variations in accordance with relevant access arrangements
annual monitoring of compliance of service providers' obligations under the National Gas Law and National Gas Rules
undertaking enforcement functions as required in relation to breaches of the National Gas Law, National Gas Rules and Regulations
hearing disputes in relation to the terms and conditions of access for relevant pipelines
approval of competitive tendering processes and and terms and conditions of access for competitive tender pipelines as required under the National Gas Law and National Gas Rules
other functions and powers required to be undertaken under the National Gas Law and National Gas Rules including those asscociated with the Gas Market Bulletin Board
The AEMC is responsible for changes to the national gas rules.