Our role

The Australian Energy Regulator (AER) regulates energy markets and networks under national energy market legislation and rules. Its functions, which mostly relate to energy markets in eastern and southern Australia, include:

  • monitoring wholesale electricity and gas markets
  • setting the prices charged for using energy networks (electricity poles and wires and gas pipelines) to transport energy to customers
  • regulating retail energy markets in the ACT, South Australia, Tasmania (electricity only) and New South Wales.
  • assisting the ACCC with energy-related issues arising under the Competition and Consumer Act, including enforcement, mergers and authorisations.
     

Wholesale energy market regulation

In the wholesale electricity and gas markets the AER monitors, investigates and enforces compliance with national energy legislation and rules.

We monitor participant bidding and rebidding, market dispatch and prices, network constraints and outages, demand forecasts and forecasts of production and capacity.

We also report on market activity, including:

  • weekly reports on wholesale market outcomes
  • reports on prices outside normal thresholds
  • quarterly reports on our compliance monitoring activities.

Our compliance and enforcement strategy is set out in the Compliance and Enforcement – Statement of Approach.

For more information, visit our Wholesale markets pages.

Energy networks regulation

The AER regulates electricity networks and natural gas pipelines by setting the maximum prices that the network owners can charge, or the maximum amount of revenue they can earn.

Network businesses submit proposals to the AER on their required revenues. We review the proposals and make decisions with reference to factors including:

  • projected demand for electricity and natural gas
  • age of infrastructure
  • operating and financial costs
  • network reliability and safety standards.

Decisions generally apply for five years, and network businesses adjust their prices annually 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 regulates retail electricity and gas markets in jurisdictions that 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, South Australia on 1 February 2013 and New South Wales on 1 July 2013.

Queensland aims to implement the Retail Law in 2014, subject to the COAG Energy Council agreeing to state-specific variations to support customers outside of south east Queensland. Victoria will implement the Retail Law, subject to the resolution of state-specific issues.

The AER does not set retail energy prices, but it provides a price comparison website, Energy Made Easy, to help customers find the best energy offers for their needs.

Our other roles include:

  • monitoring and enforcing compliance with obligations in the Retail Law, Rules and Regulations
  • reporting on performance of the market and energy businesses, including energy affordability and disconnection of customers for non-payment of energy bills
  • assessing authorisation applications from businesses that want to become energy retailers, and exempting businesses from authorisation requirements (for example, nursing homes and caravan parks that onsell energy to tenants)
  • approving policies energy retailers must implement to assist customers facing financial hardship and looking for help to manage their energy bills
  • administering a retailer of last resort scheme, which protects customers and the market if an energy retailer fails.

For further information about the Retail Law and Rules, refer to the COAG Energy Council website.

For more information about the AER's retail functions and roles, visit our Retail markets pages.