Energy Regulation

AER publishes its draft Retail Guidelines

On 5 June 2026, the Australian Energy Regulator (AER) published its draft Retail Guidelines. 

These draft Retail Guidelines consolidate four separate enforceable retail guidelines (the Retail Pricing Information Guidelines, the Benefit Change Notice Guidelines, the Billing Guideline, and the Customer Hardship Policy Guideline) into a single document. This consolidation is intended to reduce regulatory burden for retailers by making it easier for them to understand and carry out their obligations, but it is also intended to improve protections and outcomes for consumers. 

Stakeholders are invited to submit feedback on the draft Guidelines by 17 July 2026. 

More information on the Guidelines, and on how to make a submission, is available here.

New NERR rule to improve customer confidence commences 

On 1 July 2026, Schedules 1 and 2 of the Australian Energy Market Commission’s (AEMC) new rule amending the National Energy Retail Rules (NERR) commenced. This new rule consolidates four rule requests relating to:

• ensuring energy plan benefits last the length of the contract,
• removing unreasonable conditional discounts,
• preventing price increases for a fixed period under market retail contracts, and
• removing fees and charges.

The new rule is described as having the objective of improving customer confidence and outcomes for customers by:

• preventing retailers from charging new and existing customers more than the standing offer price after their energy plan’s benefits change or expire,
• allowing retailers to only increase prices once every 12 months for all existing and new market retail contracts,
• prohibiting retailers from charging retail fees (except network charges) to hardship customers, non-hardship customers experiencing payment difficulties, and customers experiencing family violence,
• requiring retailers to restrict their fees to reflect reasonable estimates of costs incurred, and to provide at least one free payment method, and
• requiring high conditional fees to be reduced to reasonable levels.

The text of the new rule is available here. Further information about the AEMC’s determination is available here.

Energy Minister calls for ACCC and AER advice on retailers increasing daily supply charges

On 19 June 2026, Energy Minister Chris Bowen wrote a letter to the Australian Competition and Consumer Commission (ACCC) and the AER, expressing concern over retailers increasing daily supply charges for consumers. In the letter, Minister Bowen commented that:

• the underlying costs of producing electricity are falling, so he would expect that consumers should be experiencing a decline in costs overall,
• the daily supply charge increases will particularly impact lower usage customers, and
• section 153E of the Competition and Consumer Act 2010 (Cth) requires electricity retailers to make reasonable adjustments to their prices if they experience sustained and substantial reductions in their underlying costs of procuring electricity.

Minister Bowen asked the AER and the ACCC to provide joint advice to inform his response to the changes in pricing structures. The AER confirmed that it is looking into how retailers are structuring their energy plans and explaining prices to customers.

AER publishes a report on significant prices in the NEM

On 28 May 2026, the AER published its Significant Electricity Prices: January to March 2026 Report. We summarise some key takeaways of the Report below. 

1. Revised significant price outcome criteria

This is the first report made under the AER’s significant price outcome criteria, published in January 2026. The new criteria the new criteria use a principles-based approach to identify a significant price outcome, rather than the previous fixed price threshold ($5,000 per MWh). 

2. Five significant price outcomes identified

The AER considered 16 days as part of its investigation. Using the new principles-based criteria, the AER determined five of the 16 days to be significant price outcomes. Of these five significant price outcomes, three occurred in Tasmania (in the energy and frequency control ancillary services (FCAS) markets) and two occurred in South Australia (in the energy market).

3. Key drivers of high prices

The three significant price outcome days in Tasmania occurred when the Basslink interconnector was unexpectedly offline, or otherwise unable to transfer FCAS. The prices were also partly driven by some rebidding. The two significant price outcome days in South Australia were driven by high demand due to hot temperatures, low wind generation, planned network limitations, and some rebidding. Generally, however, rebidding was not a key driver of high prices during this quarter.

AER releases final Default Market Offer 2026–27: lower prices and the inaugural Solar Sharer Offer

On 26 May 2026, the AER released its final Default Market Offer (DMO) determination for 2026–27 (known as DMO 8), confirming lower default electricity prices across most regions from 1 July 2026. The DMO is an annual electricity price cap for standing offers in New South Wales, South East Queensland and South Australia, and also serves as the comparison price for competitive market offers.

Flat-rate standing offer prices are decreasing in most regions, with the exception of South Australia, where residential prices are rising slightly.  Some notable outcomes in the latest determination include:

• NSW (Ausgrid, Endeavour Energy, Essential Energy): residential prices are 3.4%–5.0% lower; small business prices are 9.0%–11.3% lower.
• South East Queensland (Energex): residential prices are 7.2% lower; small business prices are 10.4% lower.
• South Australia (SA Power Networks): residential prices are 1.4% higher; small business prices are 6.8% lower.

Cost reduction analysis

The DMO price comprises four main cost components: wholesale, network, environmental, and retail (including margin). The AER considers the key movements from DMO 7 to DMO 8 to be driven by the following:

• Wholesale costs (≈30%–41% of the DMO price) – down between 2% -14%: Declining contract prices for 2026–27 reflect lower spot price volatility, attributable in part to increased output from wind and battery generators and less dependence on gas and hydro generation during evening demand peaks.
• Network costs (≈39%–54% of the DMO price) – up between 0.2% -10.6%: Network charges have mostly increased due to revenue determination outcomes, rising transmission costs, inflation and the recovery of previously under-recovered revenue.  These increases have partially offset the wholesale and environmental cost falls.
• Environmental costs (≈2%–3% of the DMO price) – down 30% to 35%: Falls in large-scale generation certificate prices have reduced LRET costs, while SRES costs have declined as the scheme phases down toward its 2030 sunset.
• Retail costs and margin (≈7%–16% of the DMO price) – down overall: Retailers have reported lower costs to serve, acquire and retain customers. The retail margin has been aligned at a uniform 6% for both residential and small business customers (down from 11% for small business under DMO 7).

Solar Sharer Offer 

For the first time, the DMO determination includes the Solar Sharer Offer (SSO), an opt-in standing offer plan that provides eligible households with three hours of free electricity in the middle of every day.  The SSO is available from 1 July 2026 to residential customers with a smart meter, regardless of whether they have rooftop solar, and is designed to take advantage of Australia’s abundant solar generation during peak production hours. 

The free usage periods are set on a fixed local time basis:

• NSW regions and Energex (SE Queensland): 11 am to 2 pm local time; and
• SA Power Networks (South Australia): 12 pm to 3 pm local time.

The AER determination specifies that a reasonable use tariff cap of 24 kWh per day applies to the free usage period, roughly equivalent to a 5-person household shifting its total daily usage into the free hours. Usage above this cap is charged at the reasonable use tariff cap rate.

Victorian Default Offer

On the same theme, the Victorian Essential Services Commission (ESC) released its final decision on the Victorian Default Offer (VDO) for 2026–27 on 25 May 2026, confirming an average 5% (approximately $84) reduction in the annual reference price for domestic customers from 1 July 2026. Small businesses on the VDO will save an average of $241 a year, or approximately 6%. 

The VDO is decreasing in each of the state’s five electricity distribution zones. For residential customers on a flat tariff (assuming 4,000 kWh/year), the reductions range from 3% (United Energy) to 8% (AusNet Services):

The final default prices are lower than those the ESC proposed in its draft decision in March, reflecting updated data about wholesale electricity contract prices and network tariffs.

AER initiates Exemptions Guidelines 2026 Review 

On 18 May 2026, the AER commenced a review of the Network Exemptions Guideline and the Retail Exempt Selling Guideline. The review proposes targeted updates to reflect new energy rules relating to secondary settlement points and the flexible metering trading reforms, and to reduce unnecessary regulatory burden for commercial embedded network retrofits while maintaining consumer protections. Submissions will close on 15 June 2026.

The AER is seeking stakeholder feedback in relation to the following proposals to:

1. Amend the guidelines to clarify how the new flexible trading framework interacts with the AER’s exemption frameworks,
2. Remove the requirement for exempt sellers to obtain an individual exemption if they plan to on-sell energy to a retrofitted commercial embedded network, and
3. Remove the requirement for prospective exempt network service providers to obtain AER approval to register a network exemption if they plan to operate or control a retrofitted commercial embedded network.

The review is limited to a confined scope and does not propose to revisit the policy intent of the flexible trading rule change or the broader objectives of the exemptions framework. 

This development is particularly relevant for participants in the embedded network sector who may benefit from the proposed reduction in regulatory burden for commercial retrofits. With the DMO set to be extended to embedded network customers from DMO 9 onwards, this review will help shape the regulatory framework for exempt selling ahead of that change.

AER compliance checks and approval of Victorian electricity distributor pricing proposals for 2026–27

On 20 May 2026, the AER published approved pricing proposals for all five Victorian electricity distributors (AusNet Services, CitiPower, Jemena, Powercor, United Energy) for 2026–27.

The AER notes that "these network charges will be incorporated into retail electricity prices for the upcoming 2026–27 year" and that "retailers ultimately determine how these underlying network charges are reflected in the retail prices offered to customers." 

The AER also published its National Consolidated Stakeholder Report on 2026–27 network pricing, covering all fourteen distribution network service providers across the NEM. 

Focusing on the Victorian distributors specifically - which are directly relevant to the VDO pricing discussed above - the outcome is mixed. Network costs for residential flat-rate customers are increasing for CitiPower (+1.1%), Powercor (+0.6%) and United Energy (+2.9%), but decreasing for AusNet Services (−8.7%) and Jemena (−1.4%). 

The AER identifies the main upward pressures as increasing transmission costs and the effect of inflation on revenue paths. However, these are offset in some networks by decreasing incentive scheme rewards and rising consumption forecasts, with those offsets fully overcoming the upward pressures for AusNet Services and Jemena.

AEMC Final Rule – Small changes to Integrating Price-Responsive Resources

On 14 May 2026, the AEMC made a final determination on small changes to the Integrating Price-Responsive Resources into the NEM (IPRR) rule. 

The IPRR rule provides the framework for aggregated consumer energy resources – including household batteries, rooftop solar and demand response – to be scheduled and dispatched in the NEM through the new Voluntarily Scheduled Resource (VSR) participant category, with dispatch mode commencing in May 2027. 

Through stakeholder engagement and early implementation work during 2025, AEMO identified five minor issues with the IPRR rule. The AEMC expedited the rule change process on the basis that the amendments are non-controversial and preserve the original policy intent. The final rule implements all five changes: 

1. Monthly VIM cost recovery payments: The amendment makes VSR Incentive Mechanism (VIM) cost recovery monthly, aligning it with AEMO's participation payments and resolving a cash-flow mismatch.
2. Deferred FCFP deadline: The deadline for AEMO to update the Frequency Contribution Factors Procedure (FCFP) is deferred to 23 May 2027, allowing time for a separate rule change on the costs and benefits of frequency performance payments for VSRs.
3. VSRs added to minimum ramp rate definition: VSRs are now included in the Chapter 10 definition of minimum ramp rate requirement, resolving an ambiguity in the rules.  
4. VSR non-conformance aligned with scheduled resources: The bespoke VSR non-conformance clause (which only allowed AEMO to cap output) has been deleted. The amendment brings VSRs under the same non-conformance regime as all other scheduled resources, giving AEMO greater operational flexibility.   
5. Deactivated/hibernating VSRs may provide ancillary services: The rule clarifies that a hibernated or deactivated VSR classified as an ancillary services unit may continue to provide ancillary services (other than regulation FCAS). 

Schedule 1 changes (cost recovery payments and minimum ramp rate definition) commenced on 21 May 2026. Schedule 2 changes (FCFP deadline, non-conformance, and ancillary services eligibility) will commence on 23 May 2027, when dispatch mode takes effect.

Budget wrap: what the 2026-27 Federal Budget means for retail energy

The 2026-27 Federal Budget (Budget), handed down on 12 May 2026, contains a number of significant developments for the retail energy sector. Below we summarise the key takeaways.

1. NEM wholesale market reforms

The Budget confirms that following the recent Energy and Climate Change Ministerial Council, a strong majority of Energy Ministers agreed to develop a legislative package to implement measures recommended by the NEM wholesale market settings review panel and continue work to establish the Electricity Services Entry Mechanism (ESEM) and Market Making Obligation (MMO) (discussed in further detail below). 

2. Consumer Energy Resources National Technical Regulator

The Budget provides $97.2 million over five years to continue implementing the National Consumer Energy Resources Roadmap, including establishing a National Technical Regulator to develop, coordinate and streamline regulation of consumer energy resources. By establishing the Consumer Energy Resources National Technical Regulator, the Government will set the technical requirements to allow consumers to benefit from their solar, batteries and EVs supporting the grid.

3. AER and ACCC uplift and enforcement

The Budget provides $15.9 million over four years (and a $2 million equity injection in 2026-27) to uplift the AER to continue network regulation, develop the Energy Made Easy website, implement the recommendations of the NEM wholesale market settings review and continue compliance and enforcement activities. In addition, $10 million over two years has been allocated to the AER to expand electricity market monitoring and reporting activities.

The Budget also provides $4 million in 2026-27 to the ACCC to extend the National Electricity Market Inquiry and enforcement activities. 

4. Domestic Gas Reservation

The Government is introducing a domestic gas reservation requiring LNG exporters to supply a proportion of their total production to the domestic market, equivalent to 20% of exports. The domestic reservation scheme will commence on 1 July 2027, with final consultation on legislation throughout June and July 2026.

AER decides not to update the interim Retail Reliability Obligation Guidelines

On 2 April 2026, the Australian Energy Regulator (AER) announced its decision not to update the interim Retail Reliability Obligation Guidelines.

A key consideration in the AER’s decision was the release of the final report in the National Electricity Market wholesale market settings review (Market Settings Review) in December 2025. The report recommended that the Retailer Reliability Obligation be phased out following the implementation of an ESEM and a MMO.

The Market Settings Review concluded that if liquidity challenges were left unaddressed, liquidity would decline and reduced competition in the derivatives market would lead to poor consumer outcomes. A proposed solution was the MMO for energy derivatives in the National Electricity Market. The MMO would apply to all participants above a pre-defined size and prescribe the volumes that must be made available for trading. The ESEM would then offer fungible financial derivatives contracts for the later years of a project’s life. Contracts would be aggregated by a ‘Central Buyer’ before being recycled back into the market before maturity.

Together, the MMO, ESEM and broader proposed reforms aim to deliver retailers efficient spot prices, stable and transparent contract prices in the derivatives market, and long-term reliable supply.

Following the Market Settings Review, the AER has decided not to update the guidelines while these proposed reforms are being considered.

AEMC finalises rules relating to customers leaving the gas network

On 2 April 2026, the AEMC announced that it has finalised Australia's first national framework for customers seeking to permanently remove (abolish) their gas connection. The framework was established as more Australians choose to switch away from gas to electrify their homes, and residential and small commercial gas demand is projected to fall by around 80% over the next two decades. 

The new rules establish:

• Outcomes-based definitions distinguishing disconnection from abolishment,
• Model standing offers for basic abolishment services with upfront pricing, approved by the AER,
• Cost-reflective charging, so customers who abolish pay the efficient cost of the service rather than those costs being spread across remaining customers,
• New information requirements so customers can make informed decisions,
• Flexibility to accommodate different jurisdictional approaches to the future of gas, including phased decommissioning, and
• Distributors remain responsible for ensuring their networks meet safety requirements, with these costs shared across all customers.

The new framework will be implemented in phases from 2027.

Information requirements for distributors commence on 1 October 2026, with retailers to follow by January 2027. Key obligations for abolishment services will take effect at the start of each network's subsequent access arrangement period. Further information about the framework and final determination is available here. Click here to register for AEMC updates and announcements by email.

AEMC publishes draft determination and rule supporting compliance with meter maintenance obligations

On 26 March 2026, the AEMC published a draft determination and a draft electricity rule intended to support meter coordinator compliance with meter maintenance obligations. These were published in response to rule change requests from Yurika, PLUS ES, the Australian Energy Market Operator (AEMO) and Intellihub, seeking to support metering coordinators’ compliance with:

• testing and inspecting obligations under the National Electricity Rules (NER), and
• repairing metering installation malfunctions within timeframes specified in the NER and AEMO’s Malfunction Exemption Procedure.

The Commission's draft rule recognises metering coordinators may experience challenges in meeting their testing and inspection obligations due to circumstances outside of their control, particularly where they require support from retailers and large customers to carry out their work. 

The draft rule would amend the NER to:

• introduce an obligation on the person who appoints a metering coordinator (generally, retailers or large customers) to support metering coordinators in meeting their meter maintenance obligations,
• expand the exemption framework for meter malfunctions and introduce an exemption framework for testing and inspections to allow meter coordinators greater flexibility to manage situations where a metering installation is not accessible, safe or ready, and
• introduce an obligation for previous metering coordinators to share the most recent test certificate, where available, with the new metering coordinator at a metering installation.

Further information about the draft determination and draft rule is available here.

Maximum penalties double to up to $100m for breaches of competition and consumer law

On 27 March 2026, the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026 received Royal Assent. The Act amends the Competition and Consumer Act 2010 (Cth) to (amongst other things) double aspects of the maximum penalty calculation for breaches of the key prohibitions, including under Australian Consumer Law.  

The Act was introduced against the backdrop of rising fuel prices as a warning to suppliers and retailers against profiting from recent price volatility. However, the new legislation is not limited to the fuel sector and the increased penalties will apply economy-wide.

The Act has commenced and the new maximum penalties apply to offences, contraventions, acts or omissions occurring on or after commencement. For corporations, the new maximum penalty is the greater of $100 million, three times the value of the benefit obtained or 30% of adjusted turnover during the relevant breach turnover period. The maximum penalty for any breach is typically reserved for the most egregious conduct, and the Federal Court retains discretion to impose appropriate penalties based on the circumstances. 

The Treasurer's media release is available here, the Explanatory Memorandum is available here, and the Act as passed is available here. 

Victoria’s ESC seeks feedback on the second stage of its Energy Retail Code of Practice review

Victoria’s Essential Services Commission (ESC) has begun stage two of its Energy Retail Code of Practice review.

Stage two builds on the September 2025 reforms, which we considered in the October 2025 edition of Power Plays. On 24 March 2026, the ESC published a consultation paper and is seeking feedback on:

• Improving outcomes for First Nations energy customers and ways energy retailers can support cultural safety,
• Strengthening family violence protections,
• Extending protections to consumers with secondary meters,
• Improving information for consumers about gas disconnection and abolishment,
• Ensuring customer contact details are accurate so customers are contactable during unplanned power outages, and
• Clarifying the assistance and protections available to energy customers with closed accounts.

The ESC Chairperson and Commissioner, Gerard Brody, said “Victoria has some of the strongest protections for energy customers in the nation, but many customers affected by family violence continue to have poor experiences with energy retailers”. In response, the ESC is consulting on ways to strengthen family violence protections by:

• Requiring energy retailers to comply with family violence policies and review these policies with expert input,
• Improving staff training on family violence,
• Adopting safer communication and debt management practices for energy customers impacted by family violence, and
• Strengthening protections for customers in embedded networks who are impacted by family violence.

The ESC consultation period closes at 5pm on Friday, 24 April 2026. A draft decision is expected in July and a final decision in September 2026. Further details on the review can be found here.

AER opens consultation on the revised Retailer of Last Resort framework

On 18 March 2026, the Australian Energy Regulator (AER) published a consultation paper and is seeking feedback on the revised Retailer of Last Resort (RoLR) Guidelines and Plan and Draft Determination. The RoLR framework ensures that energy customers can continue to their energy supply in situations where their existing retailer fails. The Guidelines and Plan have been updated to reflect changes to the National Energy Retail law introduced in December 2025.

The AER is seeking feedback on the changes to the Guidelines, including:

• Consolidating the Guidelines, Plan and statement of approach into a single document,
• Changes to the cost recovery guidance,
• Circumstances in which AER has up to 72 hours to appoint additional RoLRs, and
• Details on how RoLRs can designate market retail contract offers.

For the RoLR plan, the AER proposes changes to:

• The timeframe for responding to an AER direction for gas access and pipeline capacity,
• RoLR’s flexibility for exercising requirements in the plan,
• Customer data requirements,
• Accounting for RoLR responsibilities in Victoria,
• Incorporating family violence obligations, and
• Requirements to ensure that the AER is informed of gas or capacity issues.

The AER is accepting feedback on the draft Guidelines and Plan until 17 April 2026, with the final determination, guidelines and plan expected by 18 June 2026. 

Essential services in focus: ACCC releases 2026-27 compliance and enforcement priorities

On 19 February 2026, the Australian Competition & Consumer Commission (ACCC) announced its 2026-27 compliance and enforcement priorities. 

Similar to the ACCC’s 2025-26 priorities, several priorities are directly relevant for energy retailers, including: 

1. Misleading pricing and claims in relation to essential services, with a focus on energy and telecommunications.
2. Promoting competition in essential services, with a focus on energy and telecommunications.
3. Unfair contract terms in consumer and small business contracts, with a focus on harmful cancellation terms, including those associated with automatic renewals, early termination fee clauses and non cancellation clauses.
4. Environmental claims and sustainability in a consumer and fair trading context, with a focus on greenwashing.

During her keynote speech, ACCC Chair Gina Cass-Gottlieb noted that electricity and gas markets are often concentrated, and involve complex pricing structures that make it difficult for consumers and small businesses to compare offers and exercise choice. 

The ACCC Chair also cited the ACCC’s recent work in the energy space which highlighted the limited ability of consumers and small businesses to avoid harm when information is unclear and the need for transparency and accountability in essential services: 

• ‘Over recent years, the ACCC’s work in energy has demonstrated how transparency can help improve outcomes. Our monitoring and reporting on retail electricity exposed the extent to which many consumers were paying a loyalty penalty. That transparency supported improved outcomes while also revealing where problems persist.’
• ‘Looking ahead, our 2026–27 compliance and enforcement priorities include promoting competition in essential services, including telecommunications, electricity, and gas sectors. And also continuing to address misleading pricing and claims in relation to essential services, with a focus on energy and telecommunications.’

The ACCC’s 2026-27 compliance and enforcement priorities follow the ACCC’s Inquiry into the National Electricity Market which was released in December 2025. In its Inquiry, the ACCC found that retail competition is steadying and participation remains resilient, yet calculated annual prices for most residential customers rose in 2025 and a sizeable cohort continues to pay at or above default offer benchmarks. Retail market concentration also decreased slightly in 2025 across all NEM regions. For further information, please refer to our January edition of Power Plays here.

The 2026-27 priorities can be found here and a transcript of Ms Cass-Gottlieb’s speech is here.

AEMC releases updated work plan for 2025-2026  

On 12 February 2026, the Australian Energy Market Commission (AEMC) updated its high-level work plan for January to June 2026. 

The updated work plan includes a newly announced review of residential electricity price trends in 2026, which is expected to be prepared over June to December 2026.

The updated work plan reflects the AEMC’s existing priorities for 2025-26, which include to:

• Deliver improved consumer outcomes and enable better consumer energy resources (CER) integration,
• Clarify the future role of gas in the net zero transition,
• Get markets design right for secure and reliable changing energy systems, and
• Update network regulation to support improved consumer outcomes.

Further detail on the AEMC’s proposed work plan can be found here.

Cost protection for consumers: AEMC proposes clearer rules to manage gas supply risks during energy transition

On 26 February 2026, the AEMC released draft rules to improve the management of gas supply along Australia’s east coast.

The draft rules are intended to sharpen the Australian Energy Market Operator’s (AEMO’s) early warning and forecasting of gas shortfalls, and set clearer guardrails for intervention. They introduce a three‑tier risk framework that requires AEMO to assess and communicate supply threats more transparently, giving market participants time to respond commercially before any intervention.

If market responses are insufficient, the rules would allow AEMO to act as a ‘supplier of last resort’ (SoLR) in the east coast gas system. This is intended to improve transparency and accountability around AEMO’s powers and costs, compared with current trading arrangements.

For retailers, the SoLR mechanism is designed to shield customers from significant costs by capping the price AEMO pays to SoLR service providers when it intervenes. Those providers would be appointed via competitive tender to procure demand and supply‑side responses to a reliability threat.

The AEMC is currently seeking public submissions on both draft rules as set out below, with final determinations expected in mid-2026. An information session for stakeholders will also be held on 13 March 2026.

• ECGS Enhancing reliability and supply adequacy arrangements – submissions close 9 April 2026
• ECGS Supplier of last resort mechanism – submissions close 23 April 2026.

Further detail on the AEMC’s draft rules can be found here.

ACCC’s Inquiry into the National Electricity Market report

On 22 December 2025, the Australian Competition & Consumer Commission (ACCC) published its National Electricity Market Report. 

The Report is the ACCC’s 14th report as part of its inquiry into the supply of electricity in the National Electricity Market (NEM) and the first of two under its extended inquiry direction. 

Key call outs include the ACCC’s finding that retail competition is steadying and participation remains resilient, yet calculated annual prices for most residential customers rose in 2025 and a sizeable cohort continues to pay at or above default offer benchmarks. Retail market concentration also decreased slightly in 2025 across all NEM regions. 

The ACCC observes that 36.5% of customers — nearly 2.5 million — are on prices at or above the Default Market Offer or Victorian Default Offer, with “loyalty penalties” persisting for customers on older plans, even as more households move onto newer plans and a greater share are on their retailer’s best offer. 

The ACCC also flags upcoming policy reforms that are likely to further support customers — including:

• Regulatory revisions by the Australian Energy Regulator (AER) and the Victorian Essential Services Commission (ESC) around better offer messages, including to address confusion stemming from “same name plans”.
• Rule changes from the Australian Energy Market Commission (AEMC) and the Victorian ESC to protect customers from paying higher prices.
• The extension of Default Market Offer price protections to other plan types, including demand plans.
• Other broad market reviews that consider electricity market changes in the context of the energy transition such as the NEM Wholesale Market Settings Review (available here) and the AEMC’s review into ‘Electricity Pricing for a Consumer Driven Future’ (available here).Further information on the ACCC’s Report and earlier reports in its series are available here. 

Amendments to the Energy Retail Code of Practice 

On 9 January 2026, the Victorian ESC gave notice of amendments to the Energy Retail Code of Practice (ERCOP). Relevant changes come into operation on 1 July 2026 or 1 October 2026.    

From 1 July 2026, key changes include:

• The introduction of a new Division to protect small customers on older customer retail contracts, requiring retailers to ensure such customers pay a “reasonable price.” Retailers must review their tariffs at least annually and either reduce them or switch the customer to a cheaper plan within 20 business days if they are not on a reasonable price.
• “Reasonable price” must be determined with reference to factors including the retailer’s lowest cost generally available plan, median prices, Victorian Default Offer or standing gas offers, and value of contract benefits. A price at or below the Victorian Default Offer is deemed reasonable.
• Retailers must actively determine concession eligibility at key residential customer touchpoints (contracting, switching, and when customers seek assistance) and ensure concessions are applied. Retailers must also notify customers when eligibility ceases.
• Although limited to Victoria at the moment, these “reasonable price” changes were cited by the Commonwealth Department of Climate Change Energy and Water (DCCEW) in its latest consultation paper in December 2025 in connection with options for amendments to the “retail pricing” provisions in Part XICA in the Competition and Consumer Act 2010 (Cth).  A link to the consultation paper is here.  If similar ‘reasonableness’ provisions were adopted as part of the proposed amendments to Part XICA (aka the “PEMM” laws), these would apply to all retailers, not just those in Victoria.

From 1 October 2026, key changes include:

• Retailers must offer at least one commonly used, accessible payment method with no fees.
• Retailers must have simple and accessible processes to switch customers to the deemed best offer (DBO), including clear website instructions and availability by web and phone.
• The introduction of a new Division requiring automatic switching of eligible residential customers experiencing payment difficulty to the DBO, subject to notice and a 10‑business day opt‑out. 

Further detail on the ERCOP amendments is available here and here.

Victoria’s New Customer Contributions Framework: Objectives, methodology and charging pathways

The New Customer Contributions Framework (NCC Framework) sets out the Victorian ESC’s approach to strengthening the operation, transparency, and governance of new customer contributions across the Victorian water sector. It is designed to help water businesses and connecting parties understand how the ESC expects the NCC framework to be applied in practice. 

New customer contributions are one-off, upfront charges when a new property connects to regulated water, sewerage, or recycled water services, or an existing connection increases capacity, reflecting a contribution towards works that directly or indirectly benefit the connecting property, and may be payable in addition to any required gifted assets.

The ESC’s NCC Framework:

• Clarifies aspects of NCC implementation by the water businesses.
• Requires minimum disclosures that support transparent and efficient NCC administration and negotiations.
• Empowers suitably informed NCC calculations and negotiations.
• Encourages leading practice via links to Performance, Risk, Engagement, Management and Outcomes (PREMO) ambition ratings.
• Monitors implementation via disclosure of key NCC metrics.

The ESC now intends to work with the industry to develop case studies and update the NCC Framework modelling templates. 

The ESC’s NCC Framework is available here.

Victorian ESC announces amendments targeted at “same name, different price” energy plans

On 18 November 2025, the Victorian Essential Services Commission (ESC) announced further amendments to the Victorian Energy Retail Code of Practice (ERCP) to address perceived customer confusion over “same name, different price” energy plans.

The ESC has indicated its view that “same name, different price” energy plans are offered by retailers to attract new customers by offering lower priced plans using existing plan names, while charging higher prices to existing customers who are on the same plan. 

From 1 October 2026, retailers must have processes in place to assist customers to switch to their “best offer”.  According to the ESC, these processes will not be effective unless they are simple and accessible, and that retailers must design systems and publish new offers which clearly identify different plans. 

These amendments will form part of a broader package of reforms introduced by the ESC which it says are intended to help customers switch to their retailer’s best offer, namely:

• From 1 July 2026, retailers must ensure that all small customers on contracts older than four years are paying a reasonable price for their energy.
• From 1 October 2026, retailers must automatically switch customers experiencing payment difficulty to their retailer’s best offer

The ESC’s media release is available here.

AER publishes Consultation Paper proposing consolidation of retail energy guidelines

On 12 November 2025, the Australian Energy Regulator (AER) published its Consultation Paper as part of its ongoing Retail Guidelines Review. 

The Consultation Paper foreshadows a proposed refresh and consolidation of the existing Benefit Change Notice Guidelines, Better Bills Guideline, Customer Hardship Policy Guideline and Retail Pricing Information Guidelines into a single retail energy guideline. According to the paper, the proposed consolidation is intended to make it easier for retailers to understand their obligations. 

The AER is inviting feedback from stakeholders on the proposed new guidelines, including seeking views on how to:

• Improve retailer communications by using design principles, making communications more accessible and improving benefit change notices
• Manage increasing complexity by communicating secondary settlement points, differentiating certain types of offers and making plan names easier to understand
• Make it easier to access a better offer by clarifying better offer messages, providing them in more places and defining the deemed better offer
• Improve price transparency by making fees and charges easier to understand and improving transparency for embedded network customers of authorised retailers, and
• Improve payment assistance information by making hardship policies more consumer friendly and helping customers access concessions and rebates. 

The AER is accepting feedback until 23 December 2025, with final guidelines expected in September 2026.

The Consultation Paper is available here.

Federal Government and Victorian ESC announce free day-time electricity initiatives

On 4 November 2025, the Federal Government announced a package of reforms to the default market offer (DMO).  

The announced reforms are a response to the Department of Climate Change, Energy, the Environment and Water’s review of the DMO (the recommended reforms are available here). 

Key changes include:

• adding a new Solar Sharer Offer (SSO) initiative, and
• new requirements that the determination of the DMO be based on the efficient costs of serving small customers, effectively capping the prices payable by those customers.

The SSO initiative would introduce free electricity during a specific period of the day to provide households with cheaper daytime renewable electricity - such as those without rooftop solar or batteries. The SSO initiative is intended to support a more reliable and efficient electricity grid, and be introduced through the ERCP and DMO framework. The Federal Government plans for the SSO initiative to be available from 1 July 2026 in New South Wales, South Australia and South-East Queensland.

Further information on the SSO initiative is available here.

Victorian consultations

The Victorian ESC has commenced consultations on the 2026–27 Victorian Default Offer (VDO) and is inviting submissions on the implementation of a regulated residential tariff to include free day-time electricity, similar to the Federal Government’s SSO initiative.

The ESC’s Request for Comments Paper is available here. Consultation closes on 12 December 2025 and can be made here.  A final decision is due by 24 May 2026.

AER and ACCC separation bill passes parliament

On 3 November 2025, the Federal Parliament passed the Competition and Consumer Amendment (Australian Energy Regulator Separation) Act 2025 (Cth) (Act). The Act separates the AER from the ACCC and establishes the AER as a standalone non‑corporate Commonwealth entity from 1 July 2026.    

From 1 July 2026, key changes include:

• the AER Board becoming the accountable authority, with the AER Chair designated as Head of Agency
• the AER gaining authority to engage its own staff and consultants, with existing AER staff transferring and continuing under the ACCC Enterprise Agreement 2024–2027
• the ACCC being able to provide shared services to the AER where beneficial, with the separation proceeding at nil net cost to the federal budget, and
• the AER obtaining full management and financial autonomy to better oversee market developments, support the energy transition and deliver improved consumer outcomes.

The Act and associated Explanatory Memorandum are accessible here and here.

AEMC proposes national framework for customer‑initiated gas disconnections

On 30 October 2025, the Australian Energy Market Commission (AEMC) released a draft determination proposing Australia’s first national framework to govern how retail customers can disconnect or abolish gas supply to their properties, including how services are defined and costs allocated.

Gas disconnections involve the closing of a connection to prevent the withdrawal of gas at the premises, while gas abolishment involves the permanent removal of the connection so that gas can no longer be supplied to the premises.

The draft national framework aims to address shifting customer trends toward electric appliances, remove uncertainty about options and charges when disconnecting or abolishing gas to their premises, and ensure fair cost distribution between departing and remaining customers. 

Key points from the draft determination include:

• The framework establishes clear service categories and standard offers for basic connection removals, with cost‑reflective charges that clarify what costs can be included in abolishment, and different service levels for complex works such as multi‑unit sites or where traffic control is required
• Customers would receive better upfront information on the difference between disconnection and abolishment, as well as indicative costs and process steps, and
• The AEMC’s preferred approach is that customers who permanently remove their gas connection pay the actual cost of that abolishment, indicating that this is more equitable than socialising these costs across the remaining customer-base.

Consultation on the draft determination is open until 11 December 2025, with a final decision expected early next year; if adopted, the framework would be phased in from 2027.

The draft determination and AEMC media release are available here and here.

AEMC releases final rule to improve access to energy concessions

On 25 September 2025, the AEMC published a final rule to improve the take up of eligible concessions to energy bills. The final rule requires energy retailers to assist consumers with accessing energy bill concessions and rebates.    

From 1 July 2026, energy retailers must:

• inform new consumers or existing consumers switching contracts about the concession schemes (including rebates and relief) available in their jurisdiction; and
• ask new consumers or consumers switching contracts if they are eligible for any of those schemes.

The aim of the final rule is to ensure vulnerable customers are accessing the concessions they are eligible for. 

The AEMC also explained that the rule change by itself cannot adequately manage the diverse and complex barriers to consumers’ access to concession schemes. Accordingly, it recommends that:

• energy retailers consider process changes to streamline how consumers can add concession details to their accounts, such as by establishing a dedicated phone line or page in a consumer’s online account;
• Services Australia, DCCEEW and other relevant state and territory agencies participate in a cross-agency forum to facilitate awareness of and access to concession schemes; and
• the AER develop and update guidance and guidelines in relation to energy retailers’ communications with consumers regarding concessions, and the provision of information in relation to how concessions are applied.

An information sheet summarising the changes is available here.

The AEMC’s media release and final rule are available here and here.

Victoria tightens Energy Retail Code to boost affordability and address the ‘loyalty’ tax

On 30 September 2025, the Victorian Essential Services Commission (ESC) announced significant changes to the Energy Retail Code of Practice which it says are designed to deliver fairer pricing and better protect long-standing and vulnerable consumers. 

Key changes include:

• From 1 February 2026, retailers must include the details of the Victorian Energy and Water Ombudsman in energy bills.  The objective according to the ESC is to raise awareness of free and independent dispute resolution options and make it easier for consumers to obtain assistance when something goes wrong.
• From 1 July 2026, retailers will be required to review consumers who have remained on the same plan for more than four years and ensure they are paying a reasonable price. If not, retailers must move those consumers to a cheaper plan. This measure is targeted at addressing perceived concerns about a ‘loyalty tax’, being the suggestion that disengaged consumers pay more than newer consumers or those who regularly switch.
• From 1 October 2026, retailers must not disconnect consumers with debt totalling less than $1,000 (an increase from the current $300 threshold). Consumers who have been in debt for more than three months, or who are receiving financial hardship supports, must be moved to the retailer’s cheapest available plan. Retailers will also need to offer payment methods other than direct debit, put in place effective processes to help consumers switch to their best offer, and proactively check whether consumers are eligible for concessions.

Access the Final Decision Paper on the changes to the Energy Retail Code of Practice here.

AER releases revised guidelines to tackle risks to embedded network customers

On 29 August 2025, the AER released revised guidelines including new measures intended to address harms and risks to customers of embedded electricity networks, as identified in its review of the exemptions framework. These measures are set out in the revised Network Exemptions Guideline and Retail Exempt Selling Guideline.

Embedded electricity networks are privately owned and operated networks that purchase electricity from energy retailers and onsell it to their customers, usually within a specific area (for example, a high-rise residential building, or a self-contained site).

Some key measures include:

• Effective immediately, a requirement for exempt networks to keep their registration details current.
• From 1 January 2026, a requirement for most new embedded networks to register an exemption, therefore increasing the AER’s oversight of embedded networks; and strengthened consumer protections, such as new family violence protections for customers.
• From 1 July 2026, a requirement for exempt networks to publish customer tariffs and to include details of ombudsman schemes in energy bills.

The AER’s goal in revising the guidelines is to align the consumer protections of customers of embedded electricity networks, which has been comparatively limited, with those available to grid-connected customers.

‘BETTER OFFER’ ALERTS ON THEIR WAY - AEMC RELEASES FINAL RULE

On 11 September 2025, the AEMC published its final rule requiring energy retailers to prominently alert households and small businesses to potential savings by switching to a better energy plan.

Rather than being contained within energy bills (which many consumers may not open) these ‘better offer’ alerts must now be included in communications that accompany bills.

Effective from 30 December 2026, the final rule is designed to help consumers avoid paying more than necessary and enhance competition in the energy market. This work forms part of a broader package of seven rule changes submitted by Energy Ministers aimed at strengthening consumer protections.

The final rule is available here.

IMPROVED ACCESS TO CONCESSIONS & REBATES – AEMC RELEASES FINAL RULE

On 25 September 2025, the AEMC published its final rule requiring energy retailers to proactively help consumers access concessions and rebates on their energy bills.

Effective from 1 July 2026, retailers must ask consumers about their eligibility for concessions and provide detailed, jurisdiction-specific information whenever a consumer signs up for or switches an energy plan. This aims to address the current gap where many eligible consumers miss out on support because they are unaware of the need to notify their retailer.

The AEMC also identified through detailed analysis and stakeholder consultation that more systemic reform is needed. The AEMC recommends automating the concession application process to remove barriers such as communication challenges and verification issues. The AEMC also calls for coordinated action across governments and agencies to streamline and better inform consumers about available support.

The final rule is available here.

VICTORIAN ESC UPDATES FAMILY VIOLENCE HANDBOOK FOR RETAILERS

On 4 September 2025, the Victorian Essential Services Commission (ESC) released an updated version of its ‘Better Practice in Responding to Family Violence Handbook’ providing energy and water retailers with enhanced guidance on supporting consumers experiencing family violence.

The revised Handbook incorporates the latest research, extensive consultation with energy and water businesses, insights from community sector experts and the perspectives of those with lived experience. It emphasises a ‘Safety by Design’ approach that requires businesses to proactively identify and eliminate risks of harm in their products and services.

The Victorian ESC urges energy retailers to review their current practices against the Handbook’s principles.

The updated Handbook is available here.

MINIMUM DISCONNECTION AMOUNTS SET TO INCREASE – AER RELEASES FINAL DECISION

On 28 August 2025, the AER released its final decision to increase the minimum disconnection amount from $300 to $500, effective 1 July 2026.

Under the National Energy Retail Rules, the AER sets the minimum amount a customer can incur as negative balance on their energy account before a retailer can disconnect them for non-payment (minimum disconnection amount), provided that the customer has agreed with their retailer to repay the amount. Since 2012, the minimum disconnection amount has been $300 (including GST). This amount applies to electricity and gas consumers in jurisdictions covered by the National Energy Customer Framework (ACT, NSW, Queensland, SA and Tasmania).

The AER’s decision to increase the minimum disconnection amount is aimed at reducing the risk of consumer harm from disconnection, reflecting changes in electricity costs and inflation since 2012. While some stakeholders sought a higher threshold, the AER emphasised that the new $500 amount is intended as a minimum protection, with additional safeguards in place for customers experiencing payment difficulty or hardship. Retailers are reminded that disconnection should remain a last resort and the AER will continue to assess the need for future reviews.

The AER's final decision is available here.

AEMC PROPOSES REAL-TIME ENERGY DATA FOR CONSUMERS

On 11 September 2025, the AEMC released a draft determination proposing that all new smart meters installed from 1 January 2028 must provide households and small businesses with real-time access to their energy usage data at no upfront cost. This initiative aims to help consumers better manage their energy use, lower bills and support the integration of consumer energy resources such as solar, batteries and electric vehicles. The AEMC estimates the cost to consumers will be minimal (about $0.66 per meter per year). Consumer and cybersecurity protections, including third-party accreditation and consent requirements, are also included in the recommendations.

The AEMC held an online forum on 2 October 2025 to give stakeholders an opportunity to ask questions and share further feedback on the draft determination. Submissions are due by 23 October 2025.

The draft determination is available here.

AER PUBLISHES LEGACY METER REPLACEMENT PLANS

On 1 September 2025, the AER published the Legacy Meter Replacement Plans (LMRPs) for distribution network companies, as required under the National Electricity Rules. 

These plans set out how legacy electricity meters will be replaced with smart meters by 30 November 2030. Retailers are responsible for arranging meter replacements according to the published schedules but may also choose to replace meters ahead of schedule. 

The AER will review LMRPs to ensure they meet the National Electricity Rules and will publish approved plans on its website. While the AER does not assess or endorse the merits of the plans, it will monitor electricity retailers’ compliance throughout the smart meter rollout.

More information about the LMRPs is available here.

ACCC TO INVESTIGATE MISLEADING RETAIL ENERGY PLAN PRACTICES

On 19 August 2025, the ACCC announced it will investigate whether energy retailers are misleading consumers by promoting energy plans that promise savings or value to consumers when they actually offer ‘poor value’ for consumers.

The ACCC’s investigation follows CHOICE’s designated complaint to the ACCC in May 2025 that highlighted:

1. Identical plan names with different rates: Energy retailers reuse the same plan names for offers with different prices, leading to confusion, especially when consumers receive ‘Better Offer’ or ‘Best Offer’ messages that reference a plan with the same name as their current one.
2. Plans referring to ‘savings’: Some plans with names suggested that savings were actually more expensive than other plans from the same retailer, or even more expensive than the standing offer.
3. Offers not available to customers: Customers receiving ‘Better Offer’ or ‘Best Offer’ messages referring to plans that were not actually available to them.

The ACCC has deemed the AER and ESC the most effective avenues to address issues in relation to the use of the same names for plans with different rates, and ‘Better Offer’ or ‘Best Offer’ messages with plans that are not available to all consumers.  However, the ACCC will investigate plans referring to ‘savings’ and indicated that the investigation may result in enforcement action, industry guidance and recommendations for policy or law reform. 

This is the second designated complaint made under the designated complaints framework which commenced in March 2024. Under the framework, entities designated by the Minister (currently CHOICE, Consumer Action Law Centre and the Council of Small Business Organisations Australia) can submit complaints to the ACCC regarding significant or systemic market issues affecting consumers or small businesses. The ACCC is required to consider and publicly respond to each designated complaint within 90 days, outlining what further action, if any, will be taken. 

AER’S STATE OF THE ENERGY MARKET 2025

On 26 August 2025, the AER released its State of the Energy Market 2025 report which provides a detailed review of Australia’s energy sector, focusing on the ongoing transition from traditional coal and gas to renewable energy sources. The report offers insights into market performance, regulatory developments and the challenges and opportunities facing energy businesses and consumers.

Some key themes include:

• Retail market innovation, consumer protections and the importance of supporting vulnerable customers during the energy transition. For example, the AEMC is implementing rule changes to restrict retailers from raising prices more than once per year, removing unfair fees and ensuring hardship program customers receive the best available offer;
• The accelerating shift from coal and gas generation to renewables such as wind, solar and consumer energy resources;
• Increasing price volatility and reliability challenges in the National Electricity Market as the generation mix evolves;
• The need for significant investment in transmission and distribution networks to support new generation and two-way energy flows; and
• Gas market supply constraints, particularly in southern Australia, and the implications for gas infrastructure and pricing.

The full report is available here.

AER TO REVIEW AND CONSOLIDATE FOUR RETAIL GUIDELINES

In May 2025, the AER announced its plan to review the following enforceable retail guidelines:

1. Benefit change notice guideline - which requires retailers to notify small customers when a benefit in their market retail contract is expiring or changing;
2. Better bills guideline – which ensures bills are clear and easy for customers to understand;
3. Customer hardship policy guideline – which mandates retailer policies to support customers experiencing financial hardship; and
4. Retail pricing information guidelines – which regulates how standing and market offer prices are presented, including on the Energy Made Easy website.

On 13 August 2025, the AER announced its decision to take a holistic approach to reviewing these guidelines with an aim to consolidate them into a single, streamlined document. This initiative is expected to enhance consumer understanding of energy bills and strengthen protections for customers.

Stakeholders are encouraged to participate in the two-stage consultation process, with a draft consolidated guideline expected in April 2026.

AER’S COMPLIANCE EXPECTATIONS FOR LIFE SUPPORT OBLIGATIONS

In our previous edition, we reported on the AER’s letter to retailers and distributors about contraventions and compliance in relation to life support obligations. 

On 31 July 2025, the Essential Services Commission (ESC) released proposed reforms to Victorian energy rules to improve the registration and protection of customers relying on life support equipment.  

The review proposes amendments to several codes of practice. Some of the proposed changes include:

• New definitions to distinguish between customers requiring critical and assistive life-support equipment;
• Improved life support registration and deregistration processes;
• Enhanced communication with life-support customers during electricity outages; and
• A standard ‘Medical Confirmation Form for Life Support Equipment’ template.

These reforms aim to improve communication with customers, enhance the accuracy of life support registers and ensure emergency services can prioritise assistance during power outages. 

The ESC is currently consulting on these proposals until 4 September 2025, with a view to align Victorian and national frameworks.

AEMC RECEIVES REQUEST TO AMEND METERING COORDINATOR OBLIGATIONS

On 15 July 2025, the AEMC received a rule change request from PLUS ES to amend the National Electricity Rules (NERs). PLUS ES’ rule change proposal was released on 31 July 2025 and details compliance challenges faced by Metering Coordinators (MCs).  

PLUS ES’s proposal highlights that under the current framework, MCs are responsible for ensuring compliance with metering installation testing, inspection and maintenance obligations. However, these obligations are often excluded from commercial agreements with retailers or large customers who appoint the MCs. This exclusion arises because retailers and large customers lack direct incentives to include maintenance obligations as they do not perceive immediate benefits from these activities. 

To improve compliance with NER obligations and reduce regulatory risks for MCs, PLUS ES proposes changes to clauses 7.2.1 and 7.6.1 of the NER:

• Mandatory inclusion of maintenance obligations: The terms of MC appointments must include all compliance obligations, including testing, inspection and maintenance, at reasonable commercial rates. 
• Facilitating access: Retailers would be required to reflect these obligations in customer electricity supply agreements, ensuring customers allow access for maintenance and temporary supply interruptions.

When the AEMC initiates this rule change request, it will publish a Consultation Paper to facilitate stakeholder consultation. 

The full rule change proposal is available here.

AER’S COMPLIANCE AND ENFORCEMENT PRIORITIES 2025-26

On 1 July 2025, the Australian Energy Regulator (AER) published its compliance and enforcement priorities for 2025-26, which align with the AER’s Strategic Plan 2020-25.

Its compliance and enforcement priorities for 2025–26 are to:

1. improve outcomes for consumers experiencing vulnerability, including by ensuring access to hardship protections and affordable payment plans that reflect capacity to pay, and improving retailer hardship policies;
2. protect consumers during the universal transition to smart meters by focusing on compliance with smart meter rollout requirements, resultant tariff changes and ongoing metering practices;
3. support power system security and an efficient wholesale electricity market by focusing on compliance with network outage obligations, generator performance standards and availability obligations;
4. promote competition and ensure safe and reliable network infrastructure by improving compliance with network connection and ring-fencing obligations; and
5. monitor and enforce compliance with reporting requirements under Part 10 of the National Gas Rules.

Separately, on 23 July 2025, the AER published its annual compliance and enforcement report for 2024–25, which details some of the significant compliance and enforcement actions undertaken during the period, including the compliance and enforcement outcomes of its 2024-25 priorities.

DRAFT RULE TO IMPROVE THE APPLICATION OF CONCESSION TO BILLS

On 3 July 2025, the Australian Energy Market Commission (AEMC) published its draft retail rule to improve the application of concessions to bills. Currently, consumers who hold a concession card must proactively tell their retailer they are eligible - a requirement that many consumers are unaware of.

Under the draft rule, the AEMC proposes to require retailers to, at the point of sign-up:

1. inform consumers about the concessions and rebates specifically available in their jurisdiction; and
2. ask consumers if they are eligible for any of those concessions and rebates.

If the proposed rule changes are finalised, they would commence on 1 July 2026, aligning with the AEMC’s other reforms to improve consumer confidence in the retail energy market. The AEMC is seeking feedback on the draft rule by 14 August 2025.

For more information, visit the AEMC’s media release on the draft rule.

AER RELEASES RETAIL ENERGY MARKET PERFORMANCE UPDATE FOR Q3 2024-2025

On 27 June 2025, the AER published its retail energy market performance data for Q3 2024-25, accompanied by a slide pack of key trends. 

The key findings identified by the AER are as follows:

• energy debt and hardship remain persistent problems - while the number of consumers on hardship programs declined slightly over the past year, average debt of consumers on these programs has increased;
• since July 2024, gas median market offers have dropped in most jurisdictions;
• residential consumers with payment plans declined slightly for electricity and remained steady for gas;
• electricity disconnection rates were lower than the mid-2024 peak, though higher than the previous quarter;
• electricity consumer complaints were higher than the same quarter last year, though the proportion of complaints relating to billing decreased; and
• tier 2 retailers’ market shares are continuing to grow.

NEW GUIDELINE TO ADDRESS WATER BILLING ISSUES IN VICTORIA

On 12 June 2025, Victoria’s Essential Services Commission (ESC) published its Guideline 2 (2025): Adjustment of Bills (Guideline) which provides guidance on how water businesses may recover undercharged amounts from consumers.

Specifically, the Guideline provides advice on:

• common causes for undercharging, such as meter access issues and delays in establishing accounts;
• how to best notify consumers they have been undercharged by issuing a bill or by letter or email; and
• how to recover undercharged amounts from consumers in a four-month back-billing period.  

For more information, see the ESC’s media release here. 

AEMC ANNOUNCES NEW REFORMS TO PROTECT ENERGY CONSUMERS

On 19 June 2025, the Australian Energy Market Commission (AEMC) announced major new reforms to the National Energy Retail Rules. The new rules are intended to better protect energy consumers and are explained in:

1. the final determination on ‘Improving consumer confidence in retail energy plans’ (Consumer Confidence Rules);
2. the final determination on ‘Assisting hardship customers’ (Hardship Customers Rules); and
3. the draft determination on ‘Improving the ability to switch to a better offer’ (Switching Offer Determination).

The Consumer Confidence Rules will come into effect on 1 July 2026. The new rules will:

• prevent retailers from increasing prices beyond a standing offer if a customer’s benefits change or expire;
• restrict price rises by allowing retailers to increase prices only once every 12 months;
• require retailers to notify customers of price changes;
• remove unreasonable conditional discounts and unreasonably high penalties for not paying bills on time; and
• prohibit the charging of retail fees to vulnerable consumers or unreasonable retail fees to all other consumers.

The Hardships Customers Rules will come into effect on 30 December 2026. The new rules will require retailers to:

• ensure that where a hardship customer is not on the retailer’s lowest cost best offer, the customer will be financially no worse than if they were on that offer;
• inform hardship customers if a better offer is available upfront and on an ongoing basis; and
• increase their reporting to the AER on hardship program indicators.

The draft Switching Offer Determination propose to change the AER’s Better Bills Guideline to require retailers to present better offer messages in cover emails and bill summaries to customers. Submissions on this draft determination are due by 31 July 2025.

For more information, visit the AEMC’s announcement of the rule changes.

AER RELEASES INTERIM GUIDANCE NOTE ON EMISSIONS REDUCTION REPORTING

On 16 June 2025, the Australian Energy Regulator (AER) published an interim guidance note on emissions reduction expenditure for electricity and gas. The guidance note provides information on the AER’s expectations for expenditure forecasting, and details what factors will be considered when assessing the emissions reduction component of expenditure proposals.

In line with the amended national energy objectives, the AER will consider these principles when assessing emissions-related expenditure:

1. expenditure should be related to regulated services;
2. businesses should ensure ongoing and open engagement with consumers; and
3. businesses need to demonstrate both relevance and materiality. 

The interim guidance note also set outs implementation issues relevant to the AER’s assessment. The AER has stated that businesses should:

• calculate emissions-related figures in line with the AER’s Cost Benefit Analysis Guideline;
• use an appropriate discount rate to compare costs and benefits received at different points in time;
• justify how the proposed expenditure will contribute to emission reduction targets;
• account for any incentive schemes or government policies in their proposals; and
• conduct reviews post the implementation of proposals.

The consultation process for providing feedback on this interim note will begin in July 2026. However, stakeholders can provide feedback prior to this. For more information on how to do so, visit the AER’s announcement of the interim guidance note page. 

NEW ZEALAND COMMERCE COMMISSION TAKES ACTION AGAINST NZ’S LARGEST ELECTRICITY AND GAS DISTRIBUTOR 

The New Zealand Commerce Commission (NZCC) recently issued a compliance advice against Vector, New Zealand’s largest electricity and gas distributor. 

A NZCC investigation revealed that Vector’s standard form contracts for the supply of connection services to small businesses and consumer customers contained potentially unfair terms in breach of section 46L of the Fair Trading Act 1986 (FTA). On 15 May 2025, Vector agreed to amend or remove the unfair terms in its contracts.

Some of the unfair terms included:

• a term requiring customers to make an upfront payment in full with no clear commitment from Vector as to a start date for the works;
• a term excluding Vector’s liability to customers for any delays in commencing or completing services;
• a term allowing Vector to vary any aspect of the contracts (including price) if a customer did not agree or respond to Vector’s variation requests;
• terms allowing Vector to contract out of the FTA; and
• terms allowing Vector to recover costs where a contract was terminated by either party.

Following this investigation, the NZCC intends to engage with the electricity distribution industry through targeted education on unfair contract terms. For more information on the specific terms, see NZCC’s Compliance Advice.

CONSULTATION BEGINS ON UPDATED CONTRACTS AND FIRMNESS GUIDELINES

On 10 June 2025, the AER published its draft decision to amend the interim Contracts and Firmness Guidelines (C&F Guidelines) to reflect a recent change to the National Electricity Rules (NER). On 14 December 2024, the NER was amended to include the Retailer Reliability Obligation (RRO) exemption for scheduled bi-directional units. Under the RRO, liable entities are required to enter into contracts to meet energy demand. The new amendment exempts storage assets (including grid scale batteries and pumped hydro energy storage) from being liable under the RRO.

Some of the proposed changes to the C&F Guidelines include:

1. detailing how to calculate the 10 GWh per annum threshold to determine if entities are liable; and
2. adding new guidance on how new entrants may become liable under the RRO.

A full summary of the proposed changes can be found at Table 2 on Explanatory Memorandum. Consultation on the draft decision closes on 8 July 2025. For more information, visit the AER’s announcement of the draft decision.

AER PLACES RULES ON RETAILERS REUSING PLAN NAMES ON BILLS

On 23 May 2025, the AER announced that retailers who re-use plan names (by creating newer versions of existing plans with the same name) will be required to provide additional information on bills. This change was made following stakeholder feedback which revealed that plan names were causing confusion amongst customers. 

Retailers who re-use plan names must include the following information below all “better offer” messages (which refer to a plan with the same name as the customer’s current plan) on small customer bills by 23 August 2026: 

“If this plan has the same name as your current plan, you are on an older version of the plan which has different rates. You can still save money by switching to a newer version.”

For more information on the information disclosure requirements, see the AER’s decision notice. 

CHOICE FILES ACCC COMPLAINT TARGETING ‘COMPLICATED’ AND ‘CONFUSING’ RETAIL ENERGY PRICING

On 21 May 2025, consumer advocate group 'CHOICE' filed its first 'designated complaint' with the Australian Competition and Consumer Commission (ACCC), urging the consumer watchdog to promptly investigate tactics used by energy retailers to allegedly 'confuse and potentially mislead consumers'. The ACCC now has 90 days to respond, and consider whether enforcement action is required.

CHOICE’s complaint requests that the ACCC investigate whether energy retailers’ practices contravene the Australian Consumer Law and take enforcement action in response to any contraventions. It also asks the ACCC to consider law reform and regulatory changes. Some proposals include:

The AER has identified 13 opportunities under 6 general categories to improve the NECF by:

• making an economy-wide ban on unfair trading practices;
• introducing an energy retailer duty of care towards customers; and
• changing the energy rules/guidelines to require retailers to move customers to the best deals. 

In July last year, CHOICE was named by the Federal Government as one of three organisations with the authority to lodge a designated complaint (also known as a 'super complaint') with the regulator about ongoing and systemic issues in the consumer marketplace. 

The ACCC's designated complaints process involves assessing these claims to determine if they warrant further investigation, potentially leading to enforcement actions against retailers found to have contravened competition or consumer laws. This process aims to protect consumer rights and ensure fair competition. 

We can assist retail energy clients to manage and respond to any ACCC enquiries following Choice’s complaint. This includes guiding you through the process and helping you mitigate reputational risks, manage customer complaints and ensure adherence to regulatory requirements.

See CHOICE media release here and ACCC filing here.

RETAIL ENERGY MEASURES IN THE 2025/26 VICTORIA STATE BUDGET

On 20 May 2025, the Victorian Government delivered the 2025/26 State budget.

The Victorian Government is allocating $118 million to help lower customer power bills and encourage renewable energy. Measures include:

• commencing a 5th round of the Power Saving Bonus by providing $100 for eligible households with a concession card;
• allocating $30 million to assist 27,000 households to install electric heat pumps and solar hot water systems;
• budgeting $12 million to support the rollout of insulation upgrades under the Victorian Energy Upgrades (VEU) program.

From early 2026, the Victorian Government expects that the VEU discount will halve the average cost of ceiling installations to $1,500 and save households with no or limited insulation more than $400 a year.

To view other budget related resources, visit the Victorian Government Budget 2025/26 page.

DATA CENTRES IN THE CROSSHAIRS: AEMC SET TO TRANSFORM GRID CONNECTION RULES

On 22 May 2025, the Australian Energy Market Commission (AEMC) issued a media release detailing its efforts to modernise grid connection rules to accelerate energy transition and manage the AI boom. The AEMC’s work involves two ‘packages’ of reforms, with ‘Package 2’ putting data centres under the microscope:

• Package 1 (Improving NEM access standards): A now published final determination of improvements to the NEM access standards, which focuses on making it faster and cheaper for renewable energy generators to connect to the grid.
• Package 2 (New requirements for large energy users): To address emerging challenges to the grid from new large energy users including data centres, the AEMC is seeking stakeholder feedback until 19 June 2025 on its proposed new requirements ensure power system security. As called out by AEMC Chair, Anna Collyer:

“The rise of artificial intelligence is driving unprecedented demand for data centres in Australia, with some facilities potentially requiring as much electricity as small cities…Package 2 proposes new standards to ensure these facilities can respond appropriately during power system disturbances and don't inadvertently make problems worse during system events.”

For more information, visit the AEMC’s project pages: Package 1 and Package 2. Read our recent insight where we discuss the changes and key benefits.

REVIEW TO IMPROVE PAYMENT DIFFICULTY PROVISIONS 

On 15 May 2025, the Australian Energy Regulator (AER) published their findings from a review of payment difficulty protections in the National Energy Customer Framework (NECF). The report found a gap that results in poor outcomes for customers, particularly those disconnected from energy.

The AER has identified 13 opportunities under 6 general categories to improve the NECF by:

• making it easier to know who should be receiving assistance through introducing a single, consistent definition for customers experiencing payment difficulty;
• making it easier for customers to know what assistance is available through retailer provision of information and engagement with customers;
• making it easier for customers to access assistance by introducing minimum assistance standards and banning retailers from requiring proof of circumstances;
• making assistance more effective through minimum standards and strengthening protections to make payment plans more affordable;
• ensuring disconnection is only used as a last resort including through financial penalties to retailers who fail to uphold the principle; and
• reducing the harm caused by disconnection by banning reconnection fees for customers experiencing payment difficulties and considering disconnection alternatives.

For more information, visit the AER’s announcement of the review.

AER GUIDANCE FOR COMPLIANCE — SMART METER INSTALLATIONS

On 19 May 2025, the AER published guidance to retailers on meeting their obligations under the National Energy Retail Rules (Retail Rules) regarding smart meter installation. The guidance is in response to the AEMC’s final determination and rules to accelerate the rollout of smart meters to all customers by 2025, as discussed in our December 2024 edition of Power Plays.

The AEMC’S final determination and rules progressively introduce new requirements until 1 July 2026. From 1 June 2025, the Retail Rules will be amended to enhance communications, provide comprehensive

information and better facilitate customer-initiated smart meter replacements. The purpose of the guidance is to inform retailers on their obligations and responsibilities in relation to:

• the contents and format of customer notices for smart meter installation;
• rules about notice and ability to vary a customer’s retail tariff structure;
• responding to customer-initiated meter replacements; and
• ensuring a smooth customer experience through contact and support mechanisms.

The guidance is not binding and only serves as an informative tool.

For more information, visit the AER’s page about the guidance publication.

2024 STAKEHOLDER PERCEPTIONS OF THE AER 

On 19 May 2025, the AER also published their stakeholder survey results for 2024. Retail market participants were amongst 184 AER stakeholders surveyed for their views on the AER’s reputation and performance.

The survey found:

• reputation, trust and net advocacy scores fell to a four-year low;
• communications should demonstrate how the AER maintains healthy retail market competition;
• the AER should leverage insights from retailer research;
• some retailers considered emphasis on consumer needs in embedded networks was insufficient;
• State of the Market and retail market reporting had ongoing value; and
• 94% of retailers felt fully or partly aware of the AER’s compliance and enforcement priorities.

For more information, visit the AER’s page on the 2024 stakeholder survey.

AMENDMENTS TO VICTORIAN ENERGY UPGRADES PROGRAM 

The Victorian Energy Efficiency Target Amendment (Energy Upgrades for the Future) Act 2025 (Vic) (Amending Act) has amended the Victorian Energy Efficiency Target Act 2007 (Vic).

The Amending Act extends the VEU program’s operation from 2031 to 2046 and removes technical restrictions on the creation and surrender of certificates to make it easier for electricity and gas retailers to comply with their obligations. Further changes in the Amending Act will commence within the next 12 months.

For the Amending Act’s Explanatory Memorandum and Second Reading speech, visit the webpage here.

2026 RATE OF RETURN INSTRUMENT REVIEW UPDATE

On 28 March 2025, the Australian Energy Regulator (AER) announced that come July 2025, it will commence a review to make the 2026 rate of Rate of Return Instrument (RORI) by December 2026. The AER has also published the RORI review process paper, which sets out the review process to be followed in making the 2026 RORI.

Under national energy laws, the AER must make a RORI every 4 years. The RORI, which is binding on network business and the AER, specifies how the AER will determine the allowed rate of return on capital invested in regulated electricity and gas networks. The return on capital is a key driver of the total amount of revenue network businesses derive from network revenue determinations made by the AER. It is calculated by multiplying the rate of return to the value of the regulatory asset base.

Any changes in the rate of return or how it is calculated will likely affect retailers who may pass on any increase in the rate of return to end consumers.

For more information, visit the AER’s announcement on the 2026 RORI review update.

DRAFT RULE TO INCREASE CREDIT SUPPORT OPTIONS

On 3 April 2025, the Australian Energy Market Commission (AEMC) published a draft rule determination that would expand credit support options available to participants in the National Electricity Market (NEM).

The draft rule seeks to amend the credit support arrangements in the NEM to increase optionality and flexibility for market participants by:

• allowing participants to provide cash as credit support up to a limit of $5 million each;
• allowing participants to provide surety bonds as credit support; and
• broadening the pool of acceptable credit support providers.

The draft rule would particularly benefit small and prospective retailers, who typically have higher financing costs and lower access to capital.

For more information, visit the AEMC’s media release on the draft rule.

DRAFT RULES TO ENHANCE SAFEGUARDS FOR ENERGY CONSUMERS

On 27 March 2025, the AEMC published two draft determinations aimed at enhancing safeguards for energy consumers.

The first draft determination responds to a rule change request from Energy Ministers to increase support for consumers experiencing hardship. It aims to:

• increase support and improve outcomes for hardship consumers so that they are no worse off if they do not take up their retailer’s deemed better offer;
• place a stronger onus on retailers to assist hardship consumers with deemed better offers but afford retailers flexibility in delivering these protections; and
• improve the reporting and transparency of hardship offers available to consumers.

The second draft determination consolidates four rule change requests into one rule change process focused on improving confidence in retail energy plans. It seeks to:

• protect consumers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price when their energy plan's benefits expire;
• remove unreasonably high penalties for not paying bills on time;
• restrict retailers from increasing prices in market retail contracts more than once every 12 months; and
• prohibit fees and charges for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers.

The AER is seeking stakeholder feedback on both draft determinations by 8 May 2025.

For more information, visit the AEMC’s media release on the two draft determinations.

2026 RATE OF RETURN INSTRUMENT REVIEW UPDATE

On 28 March 2025, the Australian Energy Regulator (AER) announced that come July 2025, it will commence a review to make the 2026 rate of Rate of Return Instrument (RORI) by December 2026. The AER has also published the RORI review process paper, which sets out the review process to be followed in making the 2026 RORI.

Under national energy laws, the AER must make a RORI every 4 years. The RORI, which is binding on network business and the AER, specifies how the AER will determine the allowed rate of return on capital invested in regulated electricity and gas networks. The return on capital is a key driver of the total amount of revenue network businesses derive from network revenue determinations made by the AER. It is calculated by multiplying the rate of return to the value of the regulatory asset base.

Any changes in the rate of return or how it is calculated will likely affect retailers who may pass on any increase in the rate of return to end consumers.

For more information, visit the AER’s announcement on the 2026 RORI review update.

DRAFT RULE TO INCREASE CREDIT SUPPORT OPTIONS

On 3 April 2025, the Australian Energy Market Commission (AEMC) published a draft rule determination that would expand credit support options available to participants in the National Electricity Market (NEM).

The draft rule seeks to amend the credit support arrangements in the NEM to increase optionality and flexibility for market participants by:

• allowing participants to provide cash as credit support up to a limit of $5 million each;
• allowing participants to provide surety bonds as credit support; and
• broadening the pool of acceptable credit support providers.

The draft rule would particularly benefit small and prospective retailers, who typically have higher financing costs and lower access to capital.

For more information, visit the AEMC’s media release on the draft rule.

DRAFT RULES TO ENHANCE SAFEGUARDS FOR ENERGY CONSUMERS

On 27 March 2025, the AEMC published two draft determinations aimed at enhancing safeguards for energy consumers.

The first draft determination responds to a rule change request from Energy Ministers to increase support for consumers experiencing hardship. It aims to:

• increase support and improve outcomes for hardship consumers so that they are no worse off if they do not take up their retailer’s deemed better offer;
• place a stronger onus on retailers to assist hardship consumers with deemed better offers but afford retailers flexibility in delivering these protections; and
• improve the reporting and transparency of hardship offers available to consumers.

The second draft determination consolidates four rule change requests into one rule change process focused on improving confidence in retail energy plans. It seeks to:

• protect consumers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price when their energy plan's benefits expire;
• remove unreasonably high penalties for not paying bills on time;
• restrict retailers from increasing prices in market retail contracts more than once every 12 months; and
• prohibit fees and charges for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers.

The AER is seeking stakeholder feedback on both draft determinations by 8 May 2025.

For more information, visit the AEMC’s media release on the two draft determinations.

GAS PIPELINE MONITORING AND TRANSPARENCY REPORT

On 26 March 2025, the AER published the first gas pipeline monitoring and transparency report that provides insights into the behaviour and compliance of pipeline service providers.

Some of the key findings include:

• limited transparency in prices charged by service providers for pipeline services;
• shippers reported different experiences in their ability to negotiate non-price terms and conditions with service providers;
• financial information reported by service providers (mandatory from December 2025) will improve transparency and enable cost-based pricing benchmarks to be calculated using a building block approach;
• 11 access negotiations with prospective shippers seeking access to pipeline services were reported, all of which resulted in new access agreements;
• the AER did not have any compliance concerns regarding service providers’ dealings with associates;
• responses to the 2023 and 2024 voluntary information requests indicated service providers had complied with all ring-fencing requirements, except for one instance of self-reported noncompliance; and
• service providers have complied with the requirements under the National Gas Law and National Gas Rules.

VICTORIAN ENERGY EFFICIENCY TARGET AMENDMENT (ENERGY UPGRADES FOR THE FUTURE) BILL 2025 

The Victorian Energy Efficiency Target Amendment (Energy Upgrades for the Future) Bill 2025 (Vic) (Bill), which seeks to amend the Victorian Energy Efficiency Target Act 2007 (Vic), has commenced second reading at the Legislative Council.

The Bill will, among other things, make it easier for electricity and gas retailers to comply with their obligations to buy and surrender certificates by making the Victorian Energy Upgrades program flexible by removing technical restrictions on the creation and surrender of certificates. 

For more information, including the Bill’s Explanatory Memorandum and the Second Reading speech, visit the webpage here.

ACCC 2025-26 COMPLIANCE AND ENFORCEMENT PRIORITIES

On 20 February 2025, the Australian Competition and Consumer Commission (ACCC) announced its 2025-26 compliance and enforcement priorities.

Two new priorities are directly relevant to energy retailers, namely:

1. Tackling misleading pricing and claims in relation to essential services, with a ‘particular focus’ on energy and telecommunications.
2. Promoting competition in essential services with a ‘focus’ on energy and telecommunications.

These new priorities sit alongside other priorities we’ve seen before, e.g. taking action against greenwashing and also unfair contract terms in consumer and small business contracts (with a ‘focus’ on harmful cancellation terms).

During a recent keynote speech, ACCC Chair Gina Cass-Gottlieb foreshadowed ongoing regulatory scrutiny on essential services providers, citing increased consumer and small business vulnerabilities and the need for clarity in service plan pricing:

• ‘In the current context of cost of living and cost of doing business concerns, Australian consumers and small businesses are particularly vulnerable to anti-competitive conduct in essential services – and the impacts on price, choice and quality of services. In recognition of this ongoing concern, in 2025 to 2026, our priority on promoting competition in essential services with a focus on telecommunications, electricity, and gas will continue.’
• 'Misleading pricing and claims in relation to essential services, with a particular focus on energy and telecommunications. Households and businesses rely on these services, it is critical that service plans, and pricing claims are clear, accurate and deliver the value represented to customers.'

Energy retailers should expect increased regulatory scrutiny in 2025-26 in light of this.

The 2025-26 priorities can be found here and a transcript of Ms Cass-Gottlieb’s speech here.

RELEASE OF DRAFT DETERMINATION FOR DEFAULT MARKET OFFER 7

On 13 March 2025, the Australian Energy Regulator (AER) published its draft determination for the Default Market Offer (DMO 7).

DMO 7 sets the maximum price electricity retailers can charge standing offer customers in New South Wales, South East Queensland and South Australia for 2025-26.

Key takeaways from DMO 7 include:

1. The AER has maintained retailer margins at 6% (residential customers) and 11% (small business customers), excluding any competition allowance – citing ‘sustained cost-of-living pressures and elevated underlying inflation’.
2. This reflects an increase in the dollar value of margins of between 2.5% and 8.9% (residential customers) and between 4.2% and 8.2% (small business customers), relative to DMO 6.

Written submissions on the draft DMO may be made via email until COB on 3 April 2025. 

For more information, visit the AER Default Market Offer webpage.

VICTORIAN DEFAULT OFFER REVIEW 2025-26

As flagged in our February update, the Victoria Default Offer review is underway and on 13 March 2025 the Essential Services Commission (ESC) released its draft decision on the 2025-26 Victorian Default Offer for public consultation.

The ESC’s proposed rates vary between Victoria’s five electricity distribution zones. The proposed rates for residential and small business customers under the Victorian Default Offer:

• would drop annual prices by $19 for residential customers in some distribution zones but increase them by up to $68 in others compared to 2024-25 (the average across the five zones is a $12 increase); and

• would increase annual prices across the five distribution zones for small businesses by between $77 and $128, compared to 2024–25 (the average across the five zones is a $103 increase).

A public forum on the draft decision paper will be held on 31 March 2025 and formal submissions on the paper can be made until 5:00pm on 11 April 2025. The final decision paper will be released by 24 May 2025

For more information, visit the VDO Review page.

AER FAMILY VIOLENCE RULES: GUIDANCE FOR ENERGY RETAILERS

Under the National Energy Retail Rules (NERR), all energy retailers must have a family violence policy published on their website that sets out how they will identify and assist customers affected by family violence.

On 12 February 2025, the AER released a guidance note for energy retailers setting out their key responsibilities under the NERR to customers affected by family violence and its compliance expectations. This guidance includes commentary on incoming changes to reporting requirements for energy retailers, being:

• from 1 April 2025, version 7 of the AER Compliance Procedures and Guidelines will become effective, which will require retailers to self-report breaches of certain family violence obligations immediately. Other breaches will need to be reported on a half yearly basis or as soon as reasonably practicable where a material breach is identified; and
• from 1 July 2025, version 4 of the AER (Retail Law) Performance Reporting Procedures and Guidelines will become effective, requiring retailers to report quarterly data around the number of customers affected by family violence flagged in their system as well as the number of those customers who are on a payment plan or access the retailer’s hardship program.

VICTORIAN SOLAR MINIUM FEE FOR TARIFFS 

The ESC has set minimum feed-in tariffs for 2025-26, which set the minimum amounts electricity retailers must pay solar customers for the electricity they export into the grid.

For the 2025-26 period, the minimum flat feed-in tariff is set at 0.04 cents per kWh. Additionally, the two time-varying feed-in tariffs will range from 6.57 cents per kWh during the evening peak to 0.00 cents per kWh during the day.

These tariffs will come into effect on 1 July 2025.

For more information, visit the ESC’s solar minimum feed-in tariffs webpage.

VICTORIAN DEFAULT OFFER REVIEW 2025-26

The VDO review for 2025-26 led by the Essential Services Commission (ESC) will assess the effectiveness and competitiveness of the VDO for residential and small business consumers. The review aims to evaluate potential pricing adjustments based on changes in wholesale energy costs and network charges while enhancing consumer protections for vulnerable customers. The process will begin in early 2025, with draft decisions expected by March 2025 and final determinations by late 2025.

 Energy retailers should prepare for potential shifts in pricing strategies and consumer engagement as the VDO evolves.

Consultation on the request for comment paper for the 2025-26 VDO review has closed, and the ESC is currently reviewing submissions. Feedback will be summarised in the draft decision paper, which will be released in early March 2025, followed by an online public forum.

For more information, visit the VDO Review page.

NEM REVIEW – INITIAL CONSULTATION COMMENCES

The Federal Government has launched a review of the NEM wholesale market settings, announced in November 2024. An independent expert panel, chaired by Associate Professor Tim Nelson, will recommend settings to enhance investment in firmed, renewable generation and storage capacity, particularly after the Capacity Investment Scheme tenders conclude in 2027. 

The panel aims to develop actionable recommendations and a roadmap for reforms to facilitate reliable, competitively priced, and secure electricity services. They will engage with stakeholders, including states, market bodies, generators, retailers, investors, and consumers, to gather insights and feedback. 

Stakeholders are invited to provide submissions related to the Terms of Reference which can be found here.

For more information, visit the NEM Review consultation page.

NEW RULE SHORTENING SETTLEMENT CYCLES

On 12 December 2024, the AEMC introduced a new rule shortening the NEM settlement cycle from the current 20 business days to nine business days following the end of a billing period. This change is set to commence at the start of billing week 32 on 9 August 2026.

The new rule aims to streamline processes and reduce working capital requirements for market participants. Key benefits include:

• a reduction in the amount of credit support that energy retailers must lodge with the AEMO as part of the prudential regime;
• a decrease in the working capital needed to respond to Call Notices from the AEMO; and
• lower barriers to entry for new energy retailers, fostering increased competition in the market. As a result, consumers can anticipate enhanced service offers, more choices, and ultimately lower prices.

The AEMC considers that reducing the risk of retailer failure will also contribute to a more stable market environment, minimising customer disruption. The AEMO will publish a transition plan to ensure a smooth shift to the new settlement cycle and will engage with stakeholders throughout this process. More information can be found here. 

AER RETAIL PERFORMANCE DATA UPDATE 

The AER has released its retail performance data for the July to September 2024 quarter (Q1 2024–25) (available here). Key highlights include:

• The proportion of residential customers repaying energy debt decreased to 2.5%, down from 2.9% in Q4 2023–24, reflecting a decline of approximately 26,000 customers. This improvement is attributed to one-off payments, such as government energy rebates.
• Fewer customers accessed hardship programs offered by electricity retailers, while the number of gas customers in hardship programs remained stable. Average debt for electricity customers entering hardship programs increased, whereas the average debt for gas customers decreased slightly.
• Competition in the market is growing, with Tier 2 retailers expanding their share among residential, small, and large business customers.

AEMC CONSULTS ON ELECTRICITY PRICING, PRODUCTS AND SERVICES

On 7 November 2024, the AEMC released a consultation paper as part of its forward-looking review into the role that electricity pricing, products and services will play in supporting the diverse needs of consumers in the future, particularly as uptake increases for consumer energy resources (CER), such as solar panels and batteries. 

The review examines how consumers can be given more choice in energy pricing and services to fit their needs, how distribution networks can help keep costs fair and how retailers can ensure that energy products and prices match consumer preferences.

The key questions for stakeholder feedback include:

1. What might future electricity products services and pricing structures look like?
2. How could products, services, and pricing structures be presented to serve future consumers? 
3. How could consumer protections be balanced to enable further innovation in the retail market?
4. What barriers will need to be addressed to provide consumers a meaningful and beneficial price range of products, services and pricing structures?

The AEMC is seeking stakeholder feedback to the consultation paper by 12 December 2024. More information is available here.

STATE OF THE ENERGY MARKET 2024

On 7 November 2024, the AER released its annual ‘State of the Energy Market’ for 2024, providing a comprehensive review of the state of Australia’s energy markets over the previous year.

The key findings include that during 2023-24:

1. Retail electricity prices remain historically high despite some easing of wholesale electricity costs in the NEM since the record high prices in winter 2022. As wholesale price fluctuations tend to be reflected in future retail contracts, there is usually a time lag between changes to spot prices and retailers’ experienced costs due to retailers’ aggregate hedging behaviour.
2. The market experienced record low electricity demand in New South Wales, Victoria, South Australia and Tasmania, but also a record high demand in Queensland.
3. Consumer uptake of rooftop solar, batteries and electric vehicles continued to be strong. Residential solar now counts for the highest amount of registered capacity by fuel source across the NEM.
4. Gas continues to play an important role supporting electricity reliability and large industry, with an increased reliance on firming in concert with renewable generation.
5. Although the proportion of energy debt remained stable for end-customers, the average amount of debt per customer increased. 

Although the AER has welcomed the increased availability of new and innovative energy services, it has expressed concern that protections for consumers using these new services are inadequate and has suggested further protections will be needed in the future to help reduce the risk of harm.

The full 2024 report is available here.

AEMC PUBLISHES RULES TO ACCELERATE SMART METER ROLLOUT

On 28 November 2024, the AEMC published a final determination and final rules to accelerate the rollout of smart meters to all customers by 2030. 

The rule change implements recommendations from the AEMC’s 2023 Review of the regulatory framework for metering services and was delivered under the fast-tracked rule change process, noting the extensive consultation that was carried out during the review. 

Under the new rules, retailer-focussed obligations commence as early as 5 December 2024, with Distribution Network Service Providers (DNSPs) being required to work with retailers and metering coordinators to develop a Legacy Meter Replacement Plan (LMRP) and submit it for the AER’s approval by 30 June 2025. An LMRP must show which legacy meters will be replaced, and when. Under this arrangement, retailers will be responsible for (among other things):

• Implementing the LMRPs by arranging for legacy meters to be replaced in line with the schedules developed by the DNSPs, and by no later than 30 November 2030.
• Appointing metering coordinators, who in turn will be responsible for visiting customer sites to install smart meters.
• Communicating with end-customers, ahead of their meter upgrade, and providing them with certain prescribed information regarding their smart meter.
• Using their ‘best endeavours’ to meet interim target for replacement of legacy meters, published under the LMRP prior to 1 December each year and reporting on their annual performance to the AER.

The rules also contain new customer safeguards to protect customers from potential upfront charges and exit fees for new meters, and bill shock from unwanted retail tariff structure changes.

More information on the rules is available here.

STATE ELECTRICITY COMMISSION ENTRENCHED IN THE CONSTITUTION ACT 1975 (VIC) 

On 15 November 2024, the Constitution Amendment (SEC) Act 2023 (Vic) came into effect after being passed by the Victorian Parliament in September, enshrining the State Electricity Commission (SEC) into Victoria’s Constitution to safeguard its existence and ownership by the State and Victorians.

The purpose of the Bill is to amend the Constitution Act 1975 (Vic) and:

(a) to require that the State always has a controlling interest in the SEC;
(b) to provide for the objects of the SEC; and
(c) to constrain the power of the Parliament to repeal, alter or vary the provisions of the Constitution Act 1975 relating to (a) and (b).

ESC CONSULTS ON DEFAULT ELECTRICITY PRICES FOR 2025-26 

On 28 November 2024, the ESC released a request for comment paper, seeking input on its approach to setting the Victorian Default Offer (VDO) for 2025-26.

The VDO is the default electricity price Victorian households and small business customers pay if they haven’t chosen a different market offer. All energy retailers must say how much higher or lower their offers’ prices are compared to the VDO when advertising their energy plans.

The ESC is considering refining its approach to setting the VDO. These refinements include:

1. Estimating retail and operating costs separately for domestic and small-business customers.
2. Adjusting the current retail operating margin.
3. Adopting a new approach for estimating the prices of Victorian Energy Efficiency Certificates.
4. Removing solar exports from the load profiles of energy retailers when estimating wholesale electricity costs.

The ESC is seeking feedback from interested parties by 24 December 2024. More information is available here.

AEMO RELEASES LATEST NEM REFORM IMPLEMENTATION ROADMAP 

On 31st October 2024, AEMO released version 5.0 of its NEM Reform Implementation Roadmap (Roadmap). The Roadmap illustrates the progress of reforms impacting national electricity and gas markets across the east coast of Australia. 

Key updates to the Roadmap since the previous version include:

1. Market Interface Technology Enhancements - Progression of initiatives including Identity and Access Management, Industry Data Exchange, and Portal Consolidation.
2. Inclusion of various new rule changes including access to real-time data for consumers and the acceleration of smart meter deployment.
3. Amendments to better align scope and timing across reform initiatives, including changes to status, e.g. unlocking CER benefits through flexible trading, following publication of a final rules’ determination by the AEMC.
4. Alignment of existing AEMO CER initiatives with those in the Commonwealth’s National CER Roadmap published in July 2024.

The updated Roadmap is available here.

As the Roadmap is updated at a minimum twice annually, the next update will likely be in April 2025.   

NATIONAL ROLR SCHEME NOW APPLICABLE IN VICTORIA

On 30 July 2024, the National Energy Retail Law (Victoria) Act 2024 (Vic) and the National Energy Retail Law (Victoria) Regulations 2024 (Vic) commenced, applying the national ROLR scheme in Victoria.

Prior to this Victoria had its own ROLR scheme, under which the Essential Services Commission (ESC) was responsible for initiating and enforcing the ROLR process. This process automatically transfers customers from failed electricity retailers to specified Victorian retailers to ensure Victorians have a continued supply of essential electricity services.

From 30 July 2024, the national ROLR scheme applies in Victoria, shifting the responsibility for ensuring customers continue to receive electricity supply under the ROLR arrangements from the ESC to the AER. This change brings Victoria into line with other National Electricity Market (NEM) jurisdictions like Queensland and New South Wales, which are already subject to the national scheme implemented by the AER.

More information on the ROLR scheme is available here.

AER’s RRO GUIDANCE

On 23 August 2024, the AER published guidance to provide market participants with more clarity around their obligations under the RRO.

The RRO, operational since July 2019, aims to support reliability in the NEM by requiring retailers to eliminate forecast reliability gaps that are pre-emptively identified. Upon the AER making a reliability instrument, retailers are put on notice to enter into sufficient qualifying contracts with generators to ensure demand can be met, after which they must inform the AER of their net contract position (NCP).

1. The AER’s guidance focuses on the following 4 areas:
2. What entities are liable under the RRO
3. Timing, form, and content requirements for liable entities in submitting a compliant NCP report
4. How liable entities can submit an NCP adjustment application
5. How large energy users can opt-in to manage RRO obligations themselves

More information is available here.

AER’S RETAIL PERFORMANCE REPORTING GUIDANCE

On 28 August 2024, the AER updated its guidelines specifying how regulated entities need to submit information and data to the AER about their performance under the National Energy Retail Law and the National Energy Retail Rules. The guidelines take effect on 1 July 2025.

This information and data is used by the AER to monitor retail market outcomes in order to assist policy design, target compliance, and enforcement priorities. Such information also feeds into the AER’s strategic objectives and initiatives.

The AER made numerous changes to the guidelines aimed at better allowing it to collect data to effectively monitor outcomes in the retail market. The key changes include:

• introducing embedded network indicators which requires reporting of things such as types of contracts and customer payment difficulty metrics;
• introducing reporting on life support customers and registration/deregistration of life support within a specified time period;
• introducing reporting on how many customers are affected by family violence;
• refining indicators relating to debt, tariff and meter type, and customer service to improve definitional clarity and ensure retailers are reporting consistently, allowing for better comparability of retailers; and
• removing indicators that do not add value or where retailers do not have access to the required information, such as indicators relating to buy now pay later services.

More information is available here.

AEMC PUBLISHES FINAL RULE ON CER

On 15 August 2024, the AEMC made a final determination about the use and adoption of CER such as rooftop solar, batteries, and electric vehicles.  

Currently, large customers can only engage multiple energy service providers if they use the embedded network framework, or if they obtain a second National Metering Identifier by establishing two distribution network connection points. The determination seeks to allow large customers to trade with multiple energy service providers at their premises without needing to use an embedded network or establishing multiple connection points. It aims to have lower barriers to entry than the status quo and to minimise implementation costs.

To benefit small customers, the AEMC will allow small customers with CER devices to separate passive or flexible loads and choose how they participate in the market.

The AEMC has also proposed creating three new types of meters to enable settlement and billing using technology with in-built measurement capability, such as public lights and public electric vehicle chargers.  These new types of meters will have lower minimum specifications than the meters currently used, meaning they should support increased electric vehicle charger uptake for residential, business, and public customers.

This rule change is estimated to deliver up to $100 million in benefits over 20 years through reduced metering installation, maintenance, wholesale costs and smart streetlight emissions, and avoiding public electric vehicle charger metering costs.

The majority of the rules will be implemented by November 2026. More information and a copy of the Final Rule is available here.

AER 2023-24 COMPLIANCE AND ENFORCEMENT ANNUAL REPORT

The AER released its annual compliance and enforcement report on 26 July 2024, detailing the significant actions the AER has taken in its five priority areas for the previous 12 months.

We set out some key takeaways from the report below.

In 2023-24, the AER:

1. Imposed penalties totalling $9,989,000 in 3 court outcomes and 5 infringement notices
2. Accepted 4 enforceable undertakings
3. 4 civil proceedings in progress in the Federal Court
4. Released 11 compliance bulletins, consultations, and guidance notes

Improving outcomes for vulnerable customers

The report showed that the AER maintained its broad focus on consumer protection in the face of cost-of-living pressures in 2023-24, including by:

• conducting reviews of retailer hardship policies and approved 6 in the last year, with 6 policies still under review;
• conducting spot checks of retailer compliance with their hardship obligations by issuing compulsory notices and investigating potential breaches of hardship obligations by a number of retailers;
• taking action against retailers for alleged breaches of obligations relating to overcharging; and
• instituting proceedings against retailers for breaches of life support obligations.

The AER continues to focus on protecting vulnerable customers in its enforcement priorities for 2024-25.

Make it easier for consumers to understand their bills and energy plans

The AER undertook reviews of retailer compliance with the Better Bills Guideline, which became mandatory in September 2023. The review focused on the new requirement to have a ‘better offer’ listed on the first page of small customer bills.

In addition, the AER wrote to retailers in June 2024 to bring attention to their obligations to provide plan information consistently with the Retail Pricing Information Guideline, and has also written to retailers in relation to their obligations when notifying customers of variations to electricity tariffs and charges.

The AER continues its focus on making it easier for customers to understand their plans and bills in its enforcement priorities in 2024-25.

The full report is available here.

THE AEMC’S MARKET REVIEW OF ELECTRICITY PRICING

On 25 July 2024, the AEMC initiated a review into the role of electricity pricing in supporting consumer needs, including delivering the consumer energy resources (CER) which are necessary for the energy transition. The review will examine the ways markets can delivery products and services to match consumer needs and preferences. The AEMC has also published a draft Terms of Reference document, available here. 

The Review will focus on:

• Market arrangements that provide for consumer choice between a range of appropriate products, services, and associated prices that suit their needs and preferences.
• The role of distribution networks in enabling the right products, services and incentives for consumers, and the efficient cost and pricing outcomes that result.
• The role of retailers and energy service providers in effectively packaging and pricing electricity products and services to match consumer preferences.

AEMC DRAFT PAPER: INTEGRATING PRICE-RESPONSIVE RESOURCES INTO THE NEM

On 25 July 2024, the AEMC made a draft determination in response to a rule change request from the Australian Energy Market Operator (AEMO). The National Electricity Amendment (Integrating price-responsive resources into the NEM) Rule 2024 (Draft Rule) would allow aggregated consumer energy resources (CER) to be scheduled and dispatchable in the NEM.

The AEMC has said the Draft Rule responds to the increasing number and capacity of CER (e.g., batteries) available to consumers to respond to spot prices. The Draft Rule has close ties to the AEMC’s market review into electricity pricing, as it considers CER “a significant opportunity” for consumers to reduce their energy bills and lower emissions.

The Draft Rule proposes to:

1. Allow Virtual Power Plants to compete directly with large-scale generators in the market by fully integrating them in the planning and operation functions of the NEM.
2. Introduce monitoring and reporting functions to understand the forecasting challenges and errors from unscheduled price-responsive resources.
3. Introduce a voluntary ‘dispatch mode’ for unscheduled CERs to participate in dispatch including providing bids, receiving and following dispatch instructions, accessing regulation frequency control ancillary services (FCAS) and frequency performance payments, and involvement in setting the spot price.

The AEMC estimates the Draft Rule will provide a net benefit of approximately $805 million. Submissions on the Draft Rule close on 12 September 2024. More information and a copy of the Draft Rule are available here.

AEMC PUBLISHES DRAFT RULE CHANGE AND REVIEW PRIORITIES FOR 2023-2024

The AEMC has released its draft rule change and review priorities for FY2023-2024 for consultation.

The AEMC considers five key areas of reform should be prioritised in FY2023-2024:

1. Resilience – improve the resilience of the energy system and markets so that they can resist, absorb, accommodate to, and recover from the effects of disruptive events in a timely and efficient way.
2. Consumer energy resources (CER) – better integrate CER into the market to achieve the national energy objective (NEO) of promoting efficient investment in, and efficient operation and use of, energy services for the long-term interests of energy consumers.
3. Transmission reform – more transmission infrastructure and a more interconnected grid is needed to achieve net zero. Ensuring that the regulatory framework is fit for purpose is important to support this.
4. Emissions reduction – prioritising guidance to stakeholders on how new legislative changes to include an emission reduction objective in the NEO will be applied in the AEMC’s decision making and rule changes.
5. Reliability, system security and future wholesale market (post 2030) – the AEMC will consider key changes to reliability settings and system security and continue to work with stakeholders on issues relating to long-term wholesale market design.

The AEMC’s FY2023-2024 work program will prioritise rule changes and reviews seeking to address key issues within these areas of reform. 

The AEMC is currently seeking feedback on its proposed areas of priority and any issues it may be missing, and will publish its final priorities following stakeholder engagement in April and May 2023.

The draft rule changes and priorities can be accessed here.

PIPELINE INFORMATION DISCLOSURE GUIDELINES

AER releases issues paper to consult with stakeholders

On 6 April 2023, the AER published an issues paper seeking stakeholder feedback on key issues in the draft Pipeline Information Disclosure Guidelines (Guidelines).

The Guidelines are required under the new prescribed transparency information requirements that apply to all gas pipelines under Part 10 of the National Gas Rules. They are intended to improve transparency and the bargaining power of gas pipeline users.

The Guidelines must cover matters like what financial information a gas pipeline service provider is required to publish, the methods and inputs a service provider must use to calculate this information, and how information must be published on service providers’ websites.

The issues paper discusses options and sets out the AER’s position on these key issues.

Submissions can be made to AERgasreform@aer.gov.au until Tuesday 9 May 2023. The issues paper can be accessed here.

AEMC RELIABILITY PANEL REVISES FREQUENCY OPERATING STANDARD

On 6 April 2023, the AEMC Reliability Panel made a final determination to revise the energy sector’s frequency operating standard (FOS) for a more secure and resilient power system for customers in the future. 

According to the AEMC, maintaining stable frequency and operation in the power system is becoming increasingly important as variable inverter-based generation technologies such as batteries, wind and solar come online and thermal generators gradually leave the system. Power system equipment, including generators, may disconnect from the power system if system frequency becomes unstable and changes too quickly, or varies too far from 50Hz, which can lead to collapse of all or part of the power system.

The revised FOS will better define the operating range for the power system through various additions and amendments, including:

• confirming the allowable ranges for frequency during normal operation;
• clarifying that the target frequency in the National Energy Market (NEM) is 50Hz;
• introducing system limits for rate of change of frequency following contingency events which formalise the AEMO’s existing operational practices; and
• changing the limits and thresholds for contingency events.

Reliability Panel Chair Charles Popple says that the revised FOS is “fundamental to maintaining secure operation, which, in turn, means a reliable supply of electricity for customers and delivers reduced costs for customers in the longer-term”.

The revised FOS will come into effect on 9 October 2023 and the Panel has recommended a follow-up review be completed by no later than the end of 2027.

See here for more information.

ESC’s compliance and enforcement priorities

ESC releases its Victorian Energy Upgrades program compliance and enforcement priorities

On 14 March 2024, the ESC released its enduring and strategic priorities:

Enduring priorities 

1. Conduct that involves serious exploitation of consumer vulnerability
2. Conduct that could cause serious personal injury
3. Serious or misleading, deceptive or fraudulent conduct
4. Conduct that seriously compromises program integrity
5. Conduct that seriously compromises the program’s reputation

Strategic priorities for the remainder of 2023-24

1. Heat pump water heater installations: ensuring accredited persons provide accurate information about the type and number of products they’re replacing.
2. Baseline manipulation: ensuring accredited persons provide accurate information about the type and number of products they’re replacing.
3. Telemarketing and doorknocking: supporting industry to comply with the proposed telemarketing and doorknocking ban, and monitoring compliance and acting on non-compliance once the ban is in effect.

The ESC will review and share their 2024–25 strategic priorities for compliance and enforcement in the coming months. More information on the ESC’s compliance and enforcement priorities is available here.

ESC’s draft decision on 2024-25 Victorian default offer released for consultation

Victorian Default Offer set to decrease

On 19 March 2024, the ESC released its draft decision on the 2024-25 VDO for public consultation. The draft decision proposes to reduce the VDO by around $112 (6.4%) for residential customers and around $266 (7%) for small business customers from 1 July 2024. Lower futures contract prices for wholesale electricity are the primary reason for the reduction.

The VDO acts as a reference price so consumers can easily compare different deals in the market and represents the maximum amount that electricity retailers can charge Victorian customers in embedded networks. ESC’s Chair, Kate Symons, encouraged consumers to shop around as many retailers offer cheaper deals.

The draft decision on the VDO for 2024-25 is open for comment on Engage Victoria until 19 April 2024. The commission will hold a public forum on 28 March 2024, for which registration is now open on Engage Victoria. The final decision is expected to be released in late May 2024. 

AER reports on retail performance

Report shows increase in median market offer energy prices and energy debt

On 18 March 2024, the AER published a report into retail performance for October to December 2023.

The report shows median market offer prices for electricity and gas increased across most distribution zones from June to December 2023.

The report found that the number of residential consumers accessing a hardship plan with their energy retailer and residential energy debt has increased over the last 12 months. The report also found that there are indicators retailers are engaging earlier with customers experiencing payment difficulties, as customers are entering hardship programs with less debt and on average holding less debt while on a hardship program.

In an encouraging sign for market competition, the report shows that Tier 2 retailers continue to increase their market share in both electricity and gas markets.

The full report is available here. 

AER compliance procedures and guidelines released for consultation

AER is seeking stakeholder inputs on suggested changes to the Guidelines

The AER has started reviewing its Compliance procedures and guidelines (the Guidelines) by releasing a draft guideline (Draft Guideline) that proposes changes to the Guidelines.

The Guidelines set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law (NERL) must submit compliance information and data to the AER, and conduct compliance audits.

The AER is seeking input on specific changes in the Draft Guideline, including:

• introducing a material breach reporting requirement that requires the reporting of any material breach of an obligation under the NERL or National Energy Retail Rules as soon as reasonably practicable;
• introducing new reporting requirements relating to family violence, presentation of standing offer prices, energisation, retailer and distributor re-energisation obligations; and
• proposing to reduce the frequency of some reporting requirements and the removal of other reporting requirements to ensure that compliance reporting is focussed on the highest risk obligations.

Submissions on the Draft Guideline close on 19 April 2024. More information is available here.

AER compliance and enforcement update

AER releases Compliance and Enforcement Update for July – December 2023

On 31 January 2024, the AER released its mid-year Compliance and Enforcement Update. This Update highlights key actions and outcomes delivered from July to December 2023 and includes:

1. $6.2m in penalties for alleged breaches of retail rules ($6m in court penalties, $203,400 of infringement notice penalties)
2. 2 publications released 
3. 5 court proceedings in progress
4. An overview of actions and outcomes under the AER’s compliance and enforcement priorities

The AER’s full Compliance and Enforcement Update is available here.

AER reminds retailers of hardship obligations

AER writes letter to energy retailers reminding them of their hardship obligations

On 17 January 2024, the AER wrote to energy retailers to remind them of their hardship obligations under the National Energy Retail Law (NERL) and National Energy Retail Rules (NERR).

The AER’s letter encourages retailers to undertake a proactive review of their customer hardship policies, noting its current compliance focus in this area.

In addition, the AER details its findings from its review into retailers’ compliance with hardship obligations under the NERL / NERR. The AER identified varying compliance rates, including the following areas of concern:

1. inadequate processes to effectively identify customers experiencing payment difficulties and inform them of the retailer’s customer hardship policy;
2. trends of retailers using non-hardship payment arrangements as a first response for customers despite hardship indicators being present; and
3. inadequate consideration of a customer’s capacity to pay when setting the parameters of payment arrangements.

The AER will also soon be repeating this review process, in line with its Compliance and Enforcement Priorities for 2023-2024 (here).

See the AER’s letter to retailers, including its detailed review findings here.

AEMC completes review of retailer reliability obligation

AEMC publishes Final Report following its review into the operation of the Retailer Reliability Obligation (RRO)

On 29 February 2024, the AEMC published its Final Report following its review of the RRO, together with twelve recommendations to improve the operation of the RRO.

The RRO is one of several measures to support reliability in the National Electricity Market (NEM). It commenced on 1 July 2019 and was designed to encourage new investment in dispatchable energy technologies, essential for the reliable operation of the energy system. It does this by requiring retailers to establish contractual agreements with third parties when AEMO foresees a potential shortfall in energy supply.

The AEMC considered stakeholder feedback and experiences from the recent South Australia T-1 Reliability Instrument (here) in preparing its recommendations. The recommendations are designed to improve the operational efficiency of the RRO by reducing regulatory burden for market participants and reducing costs for consumers.

Some of the key recommendations include:

1. Move the timeframes for when retailers must report their contracts to the AER, so it is closer to the time of the relevant reliability gap. This is intended to make it easier for retailers to determine the level of contracting required to comply with the RRO and will mean they can enter contracts with new projects that come online in the lead-up to a reliability gap.
2. Extend the timeframe for the Australian Energy Market Operator (AEMO) to request reliability instruments to cover forecast reliability gaps more effectively throughout the year.
3. Amend the Market Liquidity Obligation to ensure it continues to support market liquidity in South Australia.
4. Maintain the existing definitions for liable entities and opt-in and the AER's role in assessing reliability instrument gap requests.
5. Make changes to the National Electricity Law (NEL) and NER and review guidelines to address operational issues raised by stakeholders to reduce regulatory burden and deliver lower-cost opportunities for compliance.

More information on the AEMC’s review can be found here. The Final Report is available here.

AEMO publishes draft 2024 ISP

AEMO publishes draft 2024 ISP and invites public consultation

On 15 December 2023, AEMO published the draft 2024 Integrated System Plan (ISP) for the National Energy Market (NEM), in collaboration with over 1,300 stakeholders and 110 submissions from industry, consumer and community representatives and governments. The ISP provides a comprehensive roadmap for investment in energy generation, storage and transmission to meet homes and businesses’ energy needs as Australia transitions to a net-zero economy by 2050.

To ensure that Australians can continue to access secure, reliable and affordable energy, the ISP maps out urgent investment to:

• add almost 10,000km of new and upgraded transmission by 2050;
• triple grid-scale variable renewable generation by 2030 (57 GW) and increase it seven-fold by 2050 (126 GW);
• add almost four times the firming capacity from dispatchable storage, hydro and gas-powered generation by 2050; and
• support a four-fold increase in rooftop solar capacity by 2050 (72 GW)

Stakeholders are invited to participate in upcoming consultations on the draft 2024 ISP, and written submissions are due by 16 February 2024. AEMO will finalise the draft 2024 ISP by 28 June 2024.

More information on engagement opportunities can be found here.  The draft 2024 ISP is available here.

The Australian Energy Regulator’s (AER) transparency review report on the draft 2024 ISP can be found here.

AMEC publishes new draft rules

The AEMC proposes several new rules to support the energy transition

As part of its role in setting rules for the National Electricity Market (NEM), the AEMC engages with stakeholders and governments to consider proposed rule changes and improvements.  In December 2023, the AEMC published the following draft rules:

1. Updated proposals to support system security (14 Dec 2023)

The AEMC updated its proposals to support system security, including refining the transitional services framework and adjusting timings for procurement, requiring AEMO to publish an energy transition plan every two years and mandating the consideration of emissions reductions in contracting decisions.

More information can be found here.

2. Draft rules to support timely transmission investment and reduced network charges (14 Dec 2023)

The AEMC has proposed two new rules which would facilitate lower costs to consumers as well as faster delivery of critical transmission infrastructure needed for the energy transformation:

• The first proposed rule would allow the benefits of financing for transmission and distribution projects sourced through government programs to be passed back to consumers in the form of lower network charges.
• The second proposed rule would amend the National Electricity Rules to improve the ability of transmission network service providers to efficiently finance the timely delivery of major projects.

More information can be found here. 

3. Draft rules on enhancing reserve information (21 Dec 2023)

The AEMC proposes a more cost-effective and immediate approach to support reliability in the NEM as it undergoes transformation to net zero.  The draft rule seeks to enhance information on operating reserves (or ‘stand-by power sources’), requiring the publication of any energy constraints from either hydro, gas or coal for each region at the start of each trading day and for real-time updates to be disclosed on the combined state of charge for batteries.

The AEMC believes that by making more information available to the market, market participants can continue to make their own commercial and operational decisions which in turn will deliver reliability in a way that’s best for customers.

More information can be found here.

AER updates its ‘Energy Made Easy’ website

A simpler way to find an energy plan

On 14 December 2023, the AER announced that it had updated its free and independent comparison site, Energy Made Easy.

The updated service now provides customers with three easy ways to find and compare energy plans, either by:

• using their Using their National Meter Identifier number (found on their energy bill) for personalised plan comparison;
• choosing the 30-second Quick Compare journey; or
• manually inputting information from their energy bill if preferred.

More than 1.4 million Australians have visited Energy Made Easy since higher default market offer prices came into effect on 1 July 2023, and over 700,000 have completed an energy plan search to compare retailers’ offers.

The AER media release is available here, and the Energy Made Easy website can be found here. 

New guidelines for Victorian Energy Upgrades code of conduct

As a practical resource to accompany the Victorian Energy Upgrades Program Code of Conduct, the ESC has published guidelines for the Code. These guidelines are designed to assist accredited persons and scheme participants to understand and comply with Code.

Find out more

AEMC publishes draft determination and rules incorporating emissions reduction considerations into the NER

On 26 October 2023, the AEMC published a draft determination and draft rules that seek to harmonise the NER with the new emissions reduction component in the national energy objectives (NEO).

The draft rules would support the incorporation of emissions reduction in the energy regulatory framework by:

1. Including emissions reduction as a class of market benefit for the Integrated System Plan (ISP) and Regulatory Investment Tests for Transmission and Distribution

2. Updating the ISP public policy clause and other wording in the NER to ensure emissions reduction policies are properly considered

3. Allowing network and pipeline operators to propose expenditure for activities that would contribute to achieving emissions reduction targets

The draft determination and rules follow rule change requests by the Ministerial Council on Energy in July 2023 and legislative changes in September 2023 to introduce an emissions reduction component into the NEO and harmonise the NER with that component.

Written submissions on the draft determination and rules are open until 7 December 2023.  The AEMC intends to publish its final determination and rules on 1 February 2024.

More information on the draft determination and rules, and how to make a written submission, can be found here.

Relatedly, on 12 October 2023 AEMC’s Reliability Panel announced that it will apply an emissions reduction objective in its day-to-day duties, including development of standards, guidelines, reports and recommendations for the energy market.  More information on the Reliability Panel’s announcement can be found here.

AER commences consultation on 2024-25 default market offer price determination

On 5 October 2023, the AER released its issues paper on the 2024-25 DMO price determination.  The DMO price is the maximum price a retailer can charge a standing offer customer in south-east Queensland, NSW and South Australia.

The AER is considering updates to its methodology for calculating the DMO to ensure it continues to meet the policy objectives.  These updates include:

• whether the approach to retail allowances remains appropriate
• whether and how to change the AER’s approach to the customer load profile used to model wholesale costs as the uptake of advanced meters increase and consumers continue to install solar PV systems
• whether to continue collecting confidential hedge contract data from all retailers and generators to assess the wholesale costs of retailers
• whether a different wholesale forecasting method is required for SA given the currently limited (and decreasing) contract liquidity levels in SA.

Written submissions on the issues paper have closed, however the AER’s draft determination will be released in early March 2024 for consultation, with a final determination to come into effect on 1 July 2024.  More information can be found here.

AEMO releases NEM Reform Implementation Roadmap

The AEMO has recently released the third version of its NEM Reform Implementation Roadmap, which aims to provide stakeholders with a holistic view of the reforms impacting Australia’s east coast electricity and gas markets.  The purpose of the Roadmap is to de-risk delivery, inform implementation timing and minimise implementation cost.

Notably, in preparing the latest version of the Roadmap, the AEMO and Reform Delivery Committee members:

1. Recognised the continued potential for congestion in 2025 resulting from the implementation of multiple reforms

2. Noted the uncertainty around progress, scope, timing and cost for some initiatives currently earmarked for 2025, including unlocking consumer energy resources benefits through flexible trading and integrating price responsive resources into the NEM

3. Noted a recent trend across reform initiatives towards a more simplified scope and implementation requirements

More information on the AEMO’s Roadmap can be found here.

The AER’s latest State of the Energy Market Report

The energy system in 2023 experienced fewer shocks and better outcomes than in 2022, however many of the vulnerabilities observed in 2022 remain

Find out more

AEMC applies new emissions reduction objective

On 21 September 2023, the South Australian Parliament passed the Emissions Reduction Objectives Bill 2023 (legislation) to add emissions reduction to the national energy objectives. The legislation allows the AEMC to consider the new emissions component alongside existing criteria for price, quality, safety, reliability and security in making and amending energy rules, undertaking reviews and advising energy ministers.

To support this change, on 22 September 2023, the AEMC released its guide on how it will apply the new objective. The AEMC also released a targets statement, which is a list of jurisdictional targets to be considered by the three market bodies, and others, when applying the national energy objectives.

These materials are intended to help stakeholders understand how the new emissions reduction objective will affect the rule-making process and review of projects. The AEMC has received two rule change requests from energy ministers to ‘harmonise’ the electricity and gas rules with the emissions objective. 

AEMC releases final recommendations to improve compliance with technical standards for CER

On 21 September 2023, the AEMC made final recommendations to improve compliance with technical standards for CER, such as solar PV, batteries, pool pumps and hot water heaters. The AEMC recommends:

• immediate action by industry, jurisdictions and market bodies under existing frameworks, including creating a new national technical body and expanding the role of the Australian Energy Regulator (AER) and the AEMC under the National Electricity Law; and
• that jurisdictions develop a new national regulatory framework for CER technical standards.

The final report recommends 10 immediate actions across the lifecycle of CER devices, with the intention to improve compliance by: 

1. simplifying the settings for devices manufactured in Australia

2. promoting compliant installation

3. supporting the ongoing compliance of devices connected to the power systems.

The aim is to improve compliance and, in turn, generate significant benefits for electricity consumers. More information can be found here. 

AEMO Final Determination to implement IESS into NEM

On 2 December 2021, the AEMC made a final determination to implement the National Electricity Amendment (Integrating energy storage systems into the National Electricity Market (NEM) Rule 2021), referred to as the ‘IESS Rule’. The IESS Rule seeks to better integrate storage and hybrid systems into the NEM, and deliver extensive changes to registration and classification, dispatch arrangements, non-energy cost recovery and participation of aggregated portfolios of small resources. A number of retailers made submissions.

On 18 September 2023, AEMO concluded its consultation on the Retail Market Procedures for the IESS Rule change. In addition to the IESS changes, the Final Determination also introduces two Issue Change Forms (ICFs), three new National Metering Identifier (NMI) Classification Codes, several amendments to existing NMI Classification Codes, and a large number of terminology changes. More information can be found here. 

AER publishes a new decision approving different energy bill relief messages

On 26 June 2023, the AER made a decision under section 37 of the Better Bills Guideline which required energy retailers to include on small customer bills, from 1 July 2023, the following wording:

The Australian Government and your State or Territory government are supporting customers to reduce bills. Check the understand your bill section to see whether you have received a rebate or concession. More information on rebates and concessions can be found on energy.gov.au.

Following this decision, the AER received feedback from stakeholders that the message was too lengthy and that the generic phrase ‘your state or territory government’ was likely to be unclear to customers.

In light of this feedback, on August 10 2023, the AER decided to revoke its previous decision and approve new energy bill relief messages, which vary depending on whether the customer lives in a state, the ACT, or are a customer of ActewAGL retail.

The final messages are:

AEMC releases final recommendations following its review of smart meters

On 30 August 2023, the AEMC released final recommendations following its review of smart meters. The independent review has determined that speeding up the rollout of smart meters to 100% of households by 2030 would provide net benefits to the value of $507 million for national electricity market regions, including NSW, QLD, the ACT and SA.

The AEMC’s final recommendations would see new obligations placed on retailers to provide customer friendly information prior to meter installations, adequate notice regarding any tariff changes, and a mandate on customer access to real-time data free of charge.

The recommendations also include the development of a communications strategy for the rollout to inform and assist consumers with their choices, and support for vulnerable customers with premises requiring remediation before a smart meter can be installed.

The AEMC is working with energy advocacy bodies on next steps in the rule change process.

More detail on the AEMC’s review and final report can be found here.

AEMO publishes supplementary report on market suspension payments and compensation for the 2022 NEM market suspension

On 24 August 2023, AEMO published a supplementary report on market suspension payments and compensation costs following the NEM spot market suspension in June 2022.

Part 2.1 of the report provides details on the compensation paid to each market suspension compensation claimant during the affected periods, which totalled approximately $94.8 million.

Part 2.2 of the report sets out the share of compensation costs payable by each market customer to AEMO as required under the NER. All market customers listed in Part 2.2 remain liable for their share of the compensation costs, regardless of their current registration status.

Proposed introduction of decision-making criteria for triggering the RRO in Victoria

On 1 August 2023, the Energy Legislation Amendment Bill 2023 (Vic) was introduced to the Victorian parliament. The Bill proposes to amend the National Electricity (Victoria) Act 2005 (Vic) to introduce decision-making criteria to be used if the Minister for Energy and Resources needs to trigger the retailer reliability obligation (RRO).

Under the proposed amendments, in deciding whether to trigger the RRO, the Minister may have regard to any matter he or she considers relevant, but must have regard to:

1. the liquidity of the market for Market Liquidity Obligation products in Victoria if the Minister were to trigger the RRO

2. the likelihood and consequence of multiple or critical generating units or transmission systems being available at any relevant time for generation, or transmission, of electricity

3. the impact on consumers if the Minister were to trigger the RRO

4. any matter that is prescribed.

The Minister must also consult both the Premier and Treasurer before triggering the RRO.

The Bill is currently being debated in the Legislative Council. 

AER no longer required to set electricity consumption benchmarks

With electricity consumption benchmarks no longer required on energy bills, the AEMC has decided to remove the AER’s obligation to develop and update those benchmarks. The AEMC considers that removing this prescriptive obligation will give the AER greater flexibility to focus on providing more relevant data to consumers and policy makers. 

Find out more

AER releases annual compliance and enforcement report for 2022-23

On 26 July 2023, the AER released its annual compliance and enforcement report for 2022-23.

In relation to enforcement, the report notes that the AER’s compliance and enforcement outcomes included over $1 million in penalties and the instituting of three civil proceedings in the Federal Court during the reporting period. The report notes that many of the outcomes focused on consumers experiencing vulnerability, for example, the AER instituting proceedings against energy retailers for failing to comply with their overcharging obligations.

The AER also remained focused on monitoring compliance to ensure a secure and reliable energy supply. This involved releasing findings of the AER’s investigation into market events that led to the suspension of the National Electricity Market last year.

The AER intends to deliver further compliance and enforcement outcomes focusing on hardship and payment plan protections, billing and pricing obligations, life support, wholesale electricity market obligations, critical infrastructure standards and monitoring of the new Gas Market Transparency Measures.

More details on the report and the AER’s compliance and enforcement priorities for 2023-24 (which we wrote about in our alert last month) can be found here.

AER’s review of its retail performance reporting procedures and guidelines

On 10 July 2023, the AER commenced review of its retail performance reporting procedures and guidelines. These procedures and guidelines set out the manner and form in which energy retailers must provide performance data to the AER.

The AER contends that improvements to the guidelines will allow them to better collect data to monitor retail market outcomes more effectively without imposing unnecessary costs on retailers.

The AER intends to complete this review by January 2024. More information can be found here.

AER’s guidance on National Energy Objectives and the AEMC’s consultation on emissions reduction in the Objectives

On 24 July 2023, the AER published draft guidance on applying the amended National Energy Objectives (NEOs). The draft guidance covers:

1. Matters the AER is likely to have regard to in considering whether to apply the amended NEOs to processes which are underway at the time the amendments take effect.

2. How the AER may operationalise the amended electricity objective to network service providers for the 2024-29 regulatory determinations.

The AER is seeking submissions on the draft guidance by 18 August 2023. More details, including a copy of the guidance, can be found here.

Separately, the AEMC has begun consultation on applying emissions reduction in the NEOs and is seeking feedback on a draft framework. This follows steps taken by energy ministers to fast-track a plan to embed emissions targets in the NEOs that guide the AEMC’s work around electricity, retail energy and gas.

The AEMC will consider all feedback on its consultation paper before a final guide is delivered later this year. More information can be found here.

Draft gas pipeline information disclosure guidelines

On 26 July 2023, the AER published its draft gas pipeline information disclosure guidelines, price reporting guidelines and accompanying templates (Guidelines). The Guidelines are intended to improve transparency and the bargaining power of users of gas pipelines and stand-alone compression and storage facilities. They cover matters such as the financial information that gas pipeline service providers must publish and the methods and inputs service providers must use to calculate this information.

Interested stakeholders are invited to make submissions on the draft Guidelines by 23 August 2023.

More details about the guidelines can be found here.

Retail energy market performance update for Quarter 3, 2022-23

On 28 June 2023, the AER published its retail energy market performance report covering the January to March 2023 quarter (Q3 2022–23).

Find out more

AER’s default market offer 

On 25 May 2023 the AER released its final determination on the Default Market Offer (DMO) prices for 2023–24.

Depending on their region, residential customers on standard retail plans will see price increases of between 20.8% to 23.9% without controlled load, and between 19.6% to 24.9% with controlled load.

Small business customers will see price increases of 14.7% to 28.9% depending on their region.

The AER noted that the increase in the DMO price compared to the previous DMO was driven by several factors including: 

1. Increased wholesale costs as a result of factors such as reliability issues with coal-fired generation assets, more expensive electricity futures contracts that were traded before the temporary price caps came into place and other factors.

2. Changes in annual network costs, caused predominantly by higher than forecast inflation but also new and higher jurisdictional scheme costs and previously under-recovered distribution revenues in some regions.

3. A more representative sample of retail data reveals an increase in bad and doubtful debt costs for small business customers, leading to higher costs across all customer groups.

The new DMO price comes automatically into effect on 1 July 2023.

ESC’s Victorian default offer

On the same day, the ESC released its’ final decision paper on the Victorian Default Offer (VDO) prices for 2023–24.

• The 2023-24 VDO prices represent an annual increase of 25%
• Typical bills for residential customers will increase from $1,403 to $1,755 next financial year, and for small business customers from $3,039 to $3,791.

The ESC also recently announced that it is increasing the pay-on-time discount cap for customers on market retail contracts entered into on or after 1 July 2020 to 7.16% from 1 July 2023 to 30 June 2024.

Federal Government’s energy bill relief package

In its 2023 – 24 budget, the federal government has announced energy bill relief for some eligible households and small businesses.

Eligible households in:

• NSW, Queensland, South Australia or Tasmania can get $500 per eligible household.
• Victoria can get $250 per eligible household (plus the one off $250 direct payment through Victoria’s 2023 Power Saving Bonus Payment).
• The Northern Territory or Western Australia can get $350 per eligible household.
• The ACT can get $175 per eligible household (and ACT residents can expect lower bills due to the ACT’s Large-scale Feed-in Tariff Scheme which will lower the average bill by $152).

Eligible small businesses will be able to access a $650 rebate in most jurisdictions through co-contributions from the Federal and state / territory governments (however, eligible small businesses in Victoria will get a $325 rebate). Businesses in the ACT may receive a higher rebate than this due to the ACT Government’s Large-scale Feed-in Tariff Scheme.  

National Energy Retail Rules version 37

On 1 May 2023, the Australian Energy Market Commission published version 37 of the National Energy Retail Rules. See here.

Version 37 of the Rules incorporates new domestic violence policy requirements under Part 3 of the NERR, implementing Schedules 1, 2 and 3 of the National Energy Retail Amendment (Protecting customers affected by

family violence) Rule 2022 No. 1.

Review into the arrangements for failed retailers’ electricity and gas contracts

The AEMC is reviewing the arrangements for failed retailers’ electricity and gas contracts.

The AEMC is now consulting on further refined options to improve the electricity and gas Retailer of Last Resort (RoLR) scheme for retailer failures.

Stakeholder submissions close on 22 June 2023.

Find out more

AEMC publishes draft rule change and review priorities for 2023-2024

The AEMC has released its draft rule change and review priorities for FY2023-2024 for consultation.

The AEMC considers five key areas of reform should be prioritised in FY2023-2024:

1. Resilience – improve the resilience of the energy system and markets so that they can resist, absorb, accommodate to, and recover from the effects of disruptive events in a timely and efficient way.

2. Consumer energy resources (CER) – better integrate CER into the market to achieve the national energy objective (NEO) of promoting efficient investment in, and efficient operation and use of, energy services for the long-term interests of energy consumers.

3. Transmission reform – more transmission infrastructure and a more interconnected grid is needed to achieve net zero. Ensuring that the regulatory framework is fit for purpose is important to support this.

4. Emissions reduction – prioritising guidance to stakeholders on how new legislative changes to include an emission reduction objective in the NEO will be applied in the AEMC’s decision making and rule changes. 

5. Reliability, system security and future wholesale market (post 2030) – the AEMC will consider key changes to reliability settings and system security and continue to work with stakeholders on issues relating to long-term wholesale market design.

The AEMC’s FY2023-2024 work program will prioritise rule changes and reviews seeking to address key issues within these areas of reform.

The AEMC is currently seeking feedback on its proposed areas of priority and any issues it may be missing, and will publish its final priorities following stakeholder engagement in April and May 2023.

The draft rule changes and priorities can be accessed here.

Pipeline information disclosure guidelines

AER releases issues paper to consult with stakeholders

On 6 April 2023, the AER published an issues paper seeking stakeholder feedback on key issues in the draft Pipeline Information Disclosure Guidelines (Guidelines).

The Guidelines are required under the new prescribed transparency information requirements that apply to all gas pipelines under Part 10 of the National Gas Rules. They are intended to improve transparency and the bargaining power of gas pipeline users.

The Guidelines must cover matters like what financial information a gas pipeline service provider is required to publish, the methods and inputs a service provider must use to calculate this information, and how information must be published on service providers’ websites.

The issues paper discusses options and sets out the AER’s position on these key issues.

Submissions can be made to AERgasreform@aer.gov.au until Tuesday 9 May 2023. The issues paper can be accessed here.

AEMC reliability panel revises frequency operating standard

On 6 April 2023, the AEMC Reliability Panel made a final determination to revise the energy sector’s frequency operating standard (FOS) for a more secure and resilient power system for customers in the future.

According to the AEMC, maintaining stable frequency and operation in the power system is becoming increasingly important as variable inverter-based generation technologies such as batteries, wind and solar come online and thermal generators gradually leave the system. Power system equipment, including generators, may disconnect from the power system if system frequency becomes unstable and changes too quickly, or varies too far from 50Hz, which can lead to collapse of all or part of the power system.

The revised FOS will better define the operating range for the power system through various additions and amendments, including:

• confirming the allowable ranges for frequency during normal operation;
• clarifying that the target frequency in the National Energy Market (NEM) is 50Hz;
• introducing system limits for rate of change of frequency following contingency events which formalise the AEMO’s existing operational practices; and
• changing the limits and thresholds for contingency events.

Reliability Panel Chair Charles Popple says that the revised FOS is “fundamental to maintaining secure operation, which, in turn, means a reliable supply of electricity for customers and delivers reduced costs for customers in the longer-term”.

The revised FOS will come into effect on 9 October 2023 and the Panel has recommended a follow-up review be completed by no later than the end of 2027.

See here for more information.

Market Standalone Power Systems Resource Provider (MSRP) applications now open

The AEMO has begun accepting applications to register as an MSRP in the NEM. From 30 May 2023 onwards, a person must not sell electricity directly to the market at any connection point in a regulated Standalone Power Systems Resource unless they are registered by AEMO as an MSRP.

Find out more

VDO 2023-24 draft decision

On 15 March 2023 the ESC released its draft decision proposing price increases to the VDO. The draft decision is seeking consultation, with the final decision to be made by 24 May 2023 and to apply from 1 July 2023.

The draft decision proposes an increase of around $426 for residential customers and $1,738 for small business customers. These increases are mainly because of significant increase in wholesale electricity costs due to the energy market volatility in 2022.

Commissioner Chairperson Kate Symons said: “The proposed increases to the Victorian Default Offer reflect a year of price volatility in the energy market, which is making it more expensive for energy companies to buy and supply electricity across Australia. The dollar figure increases set out in the draft decision are in keeping with proposed default market offer increases announced in other jurisdictions today.”

Submissions can be made via the Engage Victoria website until 11 April 2023. The draft decision can be accessed here.

ESC’s Victorian Energy Market Report

On 28 March 2023, the ESC released its Energy Market Report, tracking energy retailer activity and consumer trends for October to December 2022.

The report covers a summary of:

1. Compliance and enforcement activity – e.g., over $125,000 in compensation paid to customers by retailers for wrongful disconnections. 
2. Customers experiencing payment difficulty - the latest data shows a 10% increase in customers accessing payment assistance for gas and a 3% increase for electricity.
3. Disconnections - the ESC is continuing to engage directly with retailers regarding their disconnection processes.
4. Market entry and exit – the ESC is increasing its scrutiny of retail licence applications in light of the record high prices in the wholesale energy markets in 2022 and several retailer exits, to ensure that new entrants are adequately resilient to endure wholesale market volatility.

The report can be accessed here.

DMO 2023-24 draft determination 

Like Victoria, on 15 March 2023 the AER released its draft determination of the DMO for 2023-24 – which applies to the NECF states of South Australia, NEW South Wales and south-east Queensland.

The draft determination outlines the AER’s intended approach to determine the final DMO price, which will be released in May 2023 and then apply from 1 July 2023. The draft is subject to consultation with stakeholder feedback factoring in the final decision.

AER Chair Clare Savage said: “Energy prices are not immune from the significant challenges in the global economy right now; that’s why it’s more important than ever that we strike a balance in setting the DMO to protect consumers as well as allowing retailers to continue to recover their costs and innovate.”

Submissions can be made to DMO@aer.gov.au until 6 April 2023. The draft determination can be accessed here.

AER’s consumer energy resources strategy

The AER has released its strategy on its approach to regulating market outcomes for consumer energy resources (e.g., solar panels, batteries and electric vehicles).

The strategy provides a snapshot of how the AER workstreams work together to achieve the goal of the AER’s consumer energy resources work program, which is to enable consumers to own and use energy resources.

The AER intends to update the strategy periodically given the evolving nature of market and regulators.

The strategy can be accessed here.

New versions of the National Electricity and Gas Rules

On March 15 and 16, the Australian Energy Market Commission published version 196 of the National Electricity Rules (here), version 101 of the National Electricity Rules (NT) (here) and version 68 of the National Gas Rules (here).