The Australian Energy Regulator has a number of functions and responsibilities for electricity regulation. These functions will expand over time as non-economic distribution and retail functions are scheduled to transfer to the AER after legislation is introduced into South Australian Parliament in September 2009.
The AER’s current functions are focused on regulating the natural monopoly transmission and distribution sectors of the national electricity market, monitoring the wholesale electricity market and enforcing electricity market rules. The AER's regulatory functions and powers are conferred upon it by the national electricity law and the national electricity rules.
Under the national electricity law and national electricity rules, the AER’s key responsibilities at the present time include:
regulating the revenues of transmission network service providers by establishing revenue caps
regulating the revenues of distribution network service providers
monitoring the electricity wholesale market
monitoring compliance with the national electricity law, national electricity rules and national electricity regulations
investigating breaches or possible breaches of provisions of the national electricity law, rules and regulations
instituting and conducting enforcement proceedings against relevant market participants
establishing service standards for electricity transmission network service providers
establishing ring-fencing guidelines for business operations with respect to regulated transmission services
exempting network service providers from registration.
Transitional arrangements
The regulations under the National Electricity (South Australia) Act 1996 provide that any rule, guideline, report, etc., published and still in operation under the National Electricity Code is deemed to have been published under the corresponding provision of the National Electricity Rules. Similarly, actions taken for the purposes of the National Electricity Code are deemed to have been taken for the purposes of the corresponding provision of the National Electricity Rules. So, for example, if NECA has published a guideline under a provision of the code and, under the rules, that function is to be performed by the AER, the effect of the regulations is that the guideline is deemed to have been published by the AER under the relevant provision of the rules. The same applies for a guideline or determination published by the ACCC under the National Electricity Code.
The regulations also provide that any consultation process commenced in accordance with the National Electricity Code must be continued and completed in accordance with the National Electricity Rules.
The savings and transitional provisions in schedule 3 of the new National Electricity Law provide that each reference in a document to the National Electricity Code is deemed to be a reference to the National Electricity Rules, and that each reference to a code participant (other than NEMMCO) is deemed to be a reference to a registered participant under the National Electricity Rules.