AER's role in energy
The Australian Energy Regulator (AER) is Australia’s national energy market regulator and an independent statutory authority. The AER is funded by the Commonwealth, with staff, resources and facilities, provided through the Australian Competition and Consumer Commission (ACCC).
Wholesale energy market regulation
In the wholesale electricity and gas markets the AER monitors, investigates and enforces compliance with the national energy framework, comprising:
- National Electricity Law (Electricity Law)
- National Electricity Rules (Electricity Rules)
- National Gas Law (Gas Law)
- National Gas Rules (Gas Rules), and
- associated regulations.
The AER’s wholesale market compliance and enforcement strategy is set out in the Compliance and Enforcement – Statement of Approach.
The AER’s monitoring of activities in the wholesale markets includes observing bidding and rebidding, dispatch and prices, network constraints and outages, demand forecasts and forecasts of production and capacity.
The AER also monitors and reports on wholesale market events. These reports include:
- maintaining up-to-date information on the energy sector
- weekly reporting, including details of wholesale market outcomes for each week
- preparing reports when wholesale electricity or gas prices are high
- preparing quarterly reports on the AER’s wholesale energy market compliance monitoring activities.
For more information, visit our Wholesale markets pages.
Energy networks regulation
The AER regulates electricity networks and natural gas pipelines by setting the maximum amount or prices that the network owners can charge, or the maximum amount of revenue they can earn.
Network businesses submit proposals to the AER on the prices or revenue that they want the AER to set. The AER reviews these proposals and makes decisions with reference to various factors including:
- increasing demand for electricity and natural gas
- aging infrastructure
- operating costs
- the reliability of the network and safety standards.
Decisions generally apply for five years, and network businesses generally change their prices once a year during the five year period.
For more information about how the AER regulates energy networks, you can visit our Networks & pipelines pages.
Retail energy market regulation
The AER will be responsible for regulation of the retail electricity and gas market where jurisdictions have commenced the National Energy Retail Law. The Retail Law commenced in Tasmania (for electricity customers only) and the Australian Capital Territory on 1 July 2012, and South Australia on 1 February 2013.
New South Wales has annouced a start date of 1 July 2013. After that date, the AER will be also be responsible for regulating the retail electricity and gas markets in this jurisdiction. Victoria is yet to announce an offical start date. While Queensland is yet to commit to the Retail Laws.
The AER will not have a role in setting retail energy prices. However, the AER has developed an energy price comparison website, Energy Made Easy, to help customers find the best energy offers for their needs.
The AER’s new roles will also include:
- monitoring and enforcing compliance with obligations in the Retail Law, Rules and Regulations
- reporting on performance of the market and energy businesses, including information on energy affordability and trends in disconnection of customers for non-payment of energy bills
- assessing applications for national retailer authorisations from businesses that want to become energy retailers, and granting exemptions from the requirement to be authorised(for example, for nursing homes and caravan parks that pay for energy and onsell it to their tenants as part of their normal business)
- approving policies energy retailers must implement to assist customers who are facing financial hardship and looking for help to manage their bills
- administering a national retailer of last resort scheme, which protects customers and the market if a retail business fails.
For further information about the new energy legislation namely, the National Energy Retail Law and National Energy Retail Rules, refer to the Ministerial Council on Energy (MCE) website.
For more information about the AER's new retail functions and roles, visit our Retail markets pages.