Energy reform

In June 2001, the Council of Australia Governments (COAG) established a Ministerial Council on Energy (MCE) to drive energy reform, including the potential to harmonise regulatory arrangements. Following a review of energy market directions, COAG entered into the Australian Energy Market Agreement (AEMA) on 30 June 2004. The agreement established two new institutions to oversee Australia’s energy market. The AER was established as the national economic regulator and the body responsible for monitoring and enforcing national energy legislation. The Australian Energy Market Commission (AEMC) was established to undertake rule making and energy market development.

The AEMA also established a national legislative framework for electricity and gas. The National Electricity Law and National Electricity Rules commenced in 2005. The National Gas Law and National Gas Rules commenced in 2008.

Further reforms in 2009 established the Australian Energy Market Operator (AEMO) to operate gas and electricity markets in southern and eastern Australia. Subsequently, a new short term trading market in gas was progressively launched from 2010 in Sydney, Adelaide and Brisbane.

State and territory governments are expected to implement a package of reforms under the National Energy Retail Law from 1 July 2012. The reforms aim to streamline national retail regulation to support an efficient retail market with appropriate consumer protection.