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Energy Regulators in Australia

With energy playing a significant role in the up-and-coming federal election, it is important to understand who the regulatory bodies for energy are in Australia and the role each plays.

The three key bodies are:

  • Australian Energy Market Commission (AEMC)
  • Australian Energy Regulator (AER)
  • Australian Energy Market Operator (AEMO)

Australian Energy Market Commission (AEMC)

The Australian Energy Market Commission (AEMC) is the expert energy policy adviser to Australian governments. Their role is to make rules which govern the electricity and natural gas markets, including the retail elements of those markets. The objective of the AEMC’s work is to promote efficient, reliable and secure energy markets which serve the long-term interests of consumers.

The work of the AEMC is guided by three National Energy Objectives

  • The National Electricity Objective
  • The National Energy Retail Objective
  • The National Gas Objective

Each objective focuses on the long-term interests of energy consumers.

“The Australian Energy Market Commission is responsible for developing Australia’s energy markets under national electricity and gas laws – bringing consistent decision making and regulation to the energy sector”. ( AEMC website – accessed 16 April, 2019)

Australian Energy Regulator (AER)

The AER regulates the wholesale electricity and gas markets. It’s purpose is to make all Australian energy consumers better off now, and in the future. They regulate electricity networks and covered gas pipelines by setting the amount of revenue that network business can recover from customers who use these networks. They enforce the laws of the National Electricity Market (NEM) and spot gas markets in the southern and eastern states of Australia (Their jurisdiction does not include Western Australia). It is important that the interests of households and small businesses are protected which is the main objective of the AER.

“Our strategic objectives recognise that energy is an essential service for Australian households and businesses and a critical contributor to the long-term success of the Australian economy”. (AER website – accessed 16 April, 2019)

Australian Energy Market Operator (AEMO)

The Australian Energy Market Operator (AEMO) is responsible for operating Australia’s largest gas and electricity markets and power systems, including the National Electricity Market (NEM) and the Wholesale Electricity Market (WEM) in Western Australia.

“As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems information, security advice, and services to our stakeholders”. (AEMO website – accessed 16 April, 2019)

In this mix it is important to understand the following:

  • National Electricity Market (NEM)
  • National Electricity Law (NEL) National Gas Law (NGL) and National Energy Retail Law (NERL)
  • National Electricity Rules (NER)

National Electricity Market (NEM)

The NEM is the Australian wholesale electricity market that covers the electrically connected states and territories of eastern and southern Australia, and the associated synchronised electricity transmission grid. AEMC develops and maintains the Australian National Electricity Rules, which have the force of law for the NEM in the participating states and territories. The Rules are enforced by the AER.

National Electricity Law (NEL), National Gas Law (NGL) and National Energy Retail Law (NERL)

These laws are apply to New South Wales, Queensland, Victoria, South Australia, Tasmania and the Australian Capital Territory, and to a limited extent in the Northern Territory and Western Australia.

National Electricity Rules (NER)

The NER govern the operation of the National Electricity Market. The Rules have the force of law, and are made under the National Electricity Law. Up-to-date versions of the Australian National Electricity Rules can generally be found on the AEMC’s website.

Can this be a little confusing? Yes, maybe but as you read the news and the promises being made for a better energy future for our country, remember as consumers you are protected by regulatory bodies who protect consumers.

Still confusing? Contact our team at Watt Utilities who can help to clarify the roles of each of these bodies and the impact they will have on your future energy investment.

Watt Utilities
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