The Australian Energy Market Commission (AEMC) is an independent statutory body with two key roles: making and amending rules for the National Electricity Market, elements of the natural gas market and related retail markets; and providing strategic and operational advice to the COAG Energy Council.
The National Electricity, Gas and Retail Rules made by the AEMC have the force of law.
Under the National Energy Laws, all of the AEMC’s work is guided by the three legislated national energy objectives:
- National electricity objective (NEO)
- National gas objective (NGO)
- National energy retail objective (NERO).
Each objective requires an explicit focus on the long-term interests of energy consumers in our rule making decisions and advice.
“None of our decisions are taken lightly. The security, reliability and cost of energy underpins our quality of life.”
Energy is at the core of economic and social activity in industrialised countries. Efficiently functioning energy markets are integral to Australian living standards.
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.
Governance and history
The AEMC is one of three market bodies responsible for energy in Australia, all of which report to the Council of Australian Governments (COAG) through the COAG Energy Council. Additionally, the three market bodies also work together to advise the Energy Security Board (ESB).
The AEMC Commissioners are appointed by Australia’s state, territory and federal governments to make the rules under the national energy laws, and to advise governments on overall energy market development.
The Commissioners are supported by the Chief Executive and the Executive Leadership Team and staff, and together they discharge rule making and market development roles in line with the AEMC’s Code of Conduct which requires AEMC staff to act with fairness, honesty, impartiality and integrity in all our dealings.
we make and amend the:
that underpin the National Electricity Market (NEM). These rules:
- govern the operation of the NEM – the competitive wholesale electricity market and the associated national electricity system
- govern how market participants can operate in gas and retail sectors
- govern the economic regulation of the services provided by monopoly transmission and distribution networks and gas pipelines
- facilitate the provision of services to retail customers and provide specific rights for consumers to whom energy is sold or supplied
The AEMC cannot propose rules (except for minor changes such as corrections). However any stakeholder including governments, industry participants and consumers can request rule changes.
Our role is to manage the rule change process and to consult and decide on rule change requests made by others. We do this in accordance with processes set out in the law, the central focus of which is the long-term interests of consumers.
Reviews and advice
Energy markets are adapting to changing circumstances, such as the transformation of the natural gas sector and growth in renewable and local generation. In accordance with the National Electricity Objectives, the AEMC undertakes reviews and provides advice to governments on improvements to regulatory and energy market arrangements, in order to provide consumers with reliable energy in the most cost efficient way within this changing environment.
Many of our reviews arise from terms of reference provided by the nation’s energy ministers, but we can also initiate our own reviews on matters related to the rules.
In conducting our reviews and preparing advice we consult widely on matters which are related to the progress of the COAG Energy Council’s energy reform agenda.
Our current work and forward looking work program
The AEMC regularly monitors and reports on a range of matters including the level of competition in energy retail markets, future price trends, and energy market performance. We also seek to understand the impact on the energy sector of policies outside the energy market portfolio – such as emissions reduction policies – and highlight any issues in our advice to help promote integrated and consistent policy outcomes.
As part of our technology-focussed work program, the AEMC also publishes papers and reports which inform our advice to governments and analysis of rule change requests.
Our forward looking work program connects multiple rule changes, reviews and advice, and is currently focused on the following key areas:
- helping energy shoppers be more engaged and better informed
- reliability: encouraging the right amount of investment in the power system's long term capacity
- security: making sure the power system can be operated within the correct technical range.
- making it easier to buy and sell gas
The Reliability Panel, which forms part of the AEMC’s institutional arrangements, reviews and reports on the safety, security and reliability of the national electricity system.