Distribution Service Classification Guidelines and Asset Exemption Guidelines

Compliance procedures & guidelines
Date initiated: 
16 February 2018
Date completed: 
27 September 2018
Effective date: 
1 October 2018
General enquiries - Classification guideline classificationguideline2018@aer.gov.au
AER reference: 


On 1 August 2022, we released an update to the Service Classification guideline, to give effect to the new rules allowing distributors to provide SAPS to existing customers, and to offer to connect new customers to existing distributor-operated SAPS (also called regulated SAPS) where it is more economically efficient than connection to the interconnected national electricity system.

On 27 September 2018, the AER has published two new guidelines, a distribution service classification guideline and an asset exemption guideline. The Service Classification Guideline aims to provide clarity, transparency and predictability for DNSPs, and also to facilitate competition in markets for energy related services. The Restricted Asset Exemption Guideline aims to provide a robust, transparent process for assessing distributor applications for permission to recover revenue for restricted assets. Both guidelines aim to make the regulatory process more transparent and effective and will apply across the NEM. The Guidelines are effective as at 1 October 2018.


The AEMC's Contestability of Energy rule change, made in December 2017, required us to prepare two new guidelines, a distribution service classification guideline and an asset exemption guideline.

On 16 February 2018, we commenced the consultation process by publishing an issues paper, inviting submissions from interested parties. The issues paper provided background on the proposed guidelines and discussed issues for consideration, with questions to guide submissions.

In July 2018 we published draft versions of the Service Classification and Restricted Asset Exemption Guidelines and invited stakeholder submissions.

Following the period for public consultation, the Guidelines were published on 27 September 2018.