AER releases final electricity transmission ring-fencing guideline

The Australian Energy Regulation (AER) has released its final Electricity transmission ring-fencing guideline (version 4) and explanatory statement. The amendments seek to ensure the guidelines remain fit for purpose in a changing regulatory landscape and electricity market by:

  • reducing potential harms from transmission network service providers cross-subsidising competitive services with regulated revenues, primarily through strengthened legal separation obligations
  • preventing potential discrimination against competitors by transmission network service providers
  • including additional reporting and compliance obligations aligned with those in our distribution ring-fencing guideline.

The revised Guideline will apply to transmission network service providers from 1 March 2023.


Ring-fencing supports competition in markets for electricity services, as well as efficiency in the provision of regulated transmission services provided to consumers on a monopoly basis. It does this by, among other things, requiring a network service provider to separate parts of its business that provide regulated services from parts that provide unregulated services.

The Guideline has not been substantially changed since August 2002 prior to the significant changes that are underway through the energy transition.

With the energy sector moving towards greater levels of renewables and less reliance on fossil fuel generation, the role of transmission network service providers (TNSPs) has been expanding to connect this large investment in new generation. New competitive markets are also being developed for system security services that increase the potential scope of TNSP operations outside of traditional transmission network services including through the deployment of batteries.

These changes have made it necessary to update the Guideline to ensure it remains fit for purpose to protect the interests of consumers through strengthened legal separation and non-discrimination obligations.

Today’s release follows a review initiated by the AER in November 2019, including multiple rounds of submissions and consultation with a range of stakeholders (industry, regulatory bodies, and consumer advocates).

Issued date: 
1 March 2023
AER reference: 
AC 14/23
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