AER guidance on the interaction between ring-fencing and the AEMC's distributor-led stand-alone power systems draft rules

The Australian Energy Regulator (AER) has today published a supplementary explanatory note on the interaction between ring-fencing and the AEMC's proposed rules for distributor-led stand-alone power systems (SAPS). The supplementary explanatory note should be read in conjunction with the AEMC's report and proposed rules,  released on 28 May 2020, containing a package of rule changes to enable distribution network businesses to supply customers using stand-alone power systems where this is a more efficient option than maintaining a connection to the grid.

This supplementary explanatory note provides further guidance on the interaction of the AEMC’s framework for Distribution Network Service Provider distributor-led stand-alone power systems (SAPS) with our Electricity Distribution Ring-fencing Guideline. This explanatory note discusses the regulatory treatment of a regulated SAPS and options for distributors to obtain waivers (or meet the conditions of an exemption) where needed. Stakeholder consultation on these options will be sought as part of the review of our Ring-fencing Guideline later this year.


Ring-fencing supports innovation by promoting competition in markets for electricity services. Ring-fencing also supports the efficiency of regulated network services provided to consumers on a monopoly basis. It does this by requiring a network service provider to separate parts of its business that provide regulated services from the parts of its business that offer unregulated services into competitive markets.

Further enquiries on ring-fencing can be directed to

Issued date: 
10 June 2020
AER reference: 
AC 84/20
General inquiries - Ring-fencing