On 13 August 2026, the Australian Energy Market Commission (AEMC) published a consultation paper for the Electricity Network Regulation Review (ENRR) Package 2.  

The ENRR will consider the important role of electricity network regulation in providing consumers with a low cost, reliable supply of electricity as the NEM transitions to a net-zero system. Network costs make up the largest component of power bills so ensuring the regulatory framework remains fit for purpose is critical to achieving outcomes in the long term interest for consumers.  

The Commission is conducting the Review across two work packages:

• Package 1 focuses on the service classification and ring-fencing framework. It is examining which services Network Service Providers (NSPs) should provide in a regulated capacity, where should the boundary of regulation sit, and if NSPs engage in the delivery of contestable services, what market power mitigants should apply? Package 1 includes consideration of service classification, ring-fencing, as well as cost allocation and shared asset frameworks. A consultation paper on Package 1 was published on 25 June 2026 under project code EPR0106 available here.
• Package 2 (this package) examines whether regulatory processes are efficient and support positive consumer outcomes, how the framework can best support efficient service delivery, and whether it provides for appropriate risk allocation and compensation.  

We are consulting on three key elements of the economic regulatory framework

Our consultation paper explores reform opportunities in relation to three elements of the electricity economic regulatory framework to improve long term consumer outcomes:

1. Revenue determination process – whether the process for setting an NSP's regulated revenue for a forward regulatory period is efficient, supports prudent and efficient expenditure proposals and ensures consumer views are appropriately reflected.  
2. Incentives – whether the framework that aligns NSPs' decisions and behaviours with consumers’ long-term interests supports innovation, efficient network utilisation and DNSPs acting as a Distribution System Operator (DSO), while also levelising NSPs’ incentives when selecting capital or operating expenditure solutions.
3. Risk allocation – how risks are allocated between NSPs and consumers, and how NSPs are compensated for bearing risks under the framework. This includes reviewing how the existing risk allocation mechanisms operate as a package, the framework for anticipatory investment and consideration of the framework for developing the rate of return instrument under the National Electricity Law.

Submissions to the consultation paper will be open until 24 September 2026.  

We are engaging with stakeholders in multiple ways

Effective stakeholder engagement and involvement is essential for a review of this nature.  

We have developed a stakeholder engagement plan with a number of ways of engaging with stakeholders, including:

• A Senior Advisory Group to provide advice on strategic direction
• Staff level Working Groups from across the sector to engage regularly with the AEMC project team during the policy development process
• Public forums enabling both in person and online discussion to help shape policy development and for stakeholders to share and understand each other’s views
• We also welcome bilateral or multilateral engagement.  

Key documentation from our public forums, the membership of our Senior Advisory Group and details of our working groups can be found in the Stakeholder engagement section below.  

We thank those who attended our first hybrid forum on 18 August 2026 which covered both package 1 and package 2 of the ENRR, plus the two rule change requests that relate to the areas covered in package 1.  

Terms of reference

The AEMC initiated the ENRR with publication of the Package 1 consultation paper and a final Terms of Reference for the Review on 25 June 2026. These are available on the ENRR Package 1 project page.  

Next steps  

The next for the Review are as follows:

• Submissions to the consultation paper for ENRR Package 2 close on 24 September 2026.  
• The AEMC will host a second hybrid forum in February 2027. Further information on the forum's content, timing, venue and registration will be provided once available.

We value stakeholder feedback and input and there will be future options and opportunities to provide feedback through the Review process. Please use the contact project leader link on this page if you wish to contact the project team directly.