Ring-fencing

The electricity and gas rules impose specific obligations on regulated electricity and gas network businesses with related parties that operate in competitive markets. The purpose of ring-fencing is to prevent regulated businesses from discriminating in favour of their related parties to disadvantage competitors operating in these markets.

In practice, ring-fencing requires legal and functional separation of a regulated network business from related parties. The precise ring-fencing obligations differ between electricity and gas, and distribution and transmission.

Our ring-fencing frameworks set out the specific obligations applicable to network businesses. In particular, the obligations include regular reporting of compliance as well as preparation of annual compliance reports that have been assessed by appropriately qualified independent assessors.  

On this page you will find information about the ring-fencing frameworks we administer. These are concerned with:

Electricity distribution

On 30 November 2016, we published the Ring-fencing Guideline (Electricity Distribution) which will applies across the NEM. We also published an explanatory statement to assist in understanding the Guideline and to explain why we have reached the positions set in it.

The Guideline became effective from 1 December 2016 and distribution network service providers (DNSPs) were required to comply with the Guideline no later than 1 January 2018, subject to any waivers.

On 16 August 2019 the AER began the process to review the current electricity distribution ring-fencing guideline.

Electricity distribution ring-fencing guideline review 2019

Key information

Annual report

Compliance

Electricity transmission

The Transmission Network Ring-fencing Guideline was published in 2002 by the ACCC and underwent a minor update in 2005 when the AER became responsible regulator. With the review and implementation of ring-fencing arrangements for electricity distribution completed in 2016, a review of the Transmission guideline will commence in the second half of 2019 and conclude in 2020.

Electricity transmission ring-fencing guideline review 2019

The 2005 compendium of regulatory guidelines includes provisions relating to electricity transmission. This Guideline is based closely on the approach developed by the ACCC in 2002. The compendium includes guidelines for some issues that are now superseded.

Previously the AER adopted the ACCC’s guidelines for ring-fencing in 2002.

Compendium of electricity transmission regulatory guidelines 2005

Contact

Ring-fencing enquiries relating to electricity distribution and electricity transmission should be directed to ringfencing@aer.gov.au.

Gas distribution and transmission 

Gas Distribution and Transmission Ring-fencing obligations of gas service providers are governed under the National Gas Rules.

Contact

Ring-fencing enquiries relating to gas should be directed to AERInquiry@aer.gov.au

General documents & register of ring-fencing waivers

The links below provide access to all ring-fencing waivers and compliance reports that apply to multiple ring-fencing frameworks: