The Australian Energy Market Commission (AEMC) has formally commenced a comprehensive review of the economic regulation governing electricity networks as Australia’s power system undergoes its most significant transformation in a generation.
The AEMC has published the final Terms of Reference alongside its first consultation paper for its Electricity Network Regulation Review, which initiates Package 1 of a two-package process.
The review is set to consider a range of fundamental questions, including the changing role of networks at both transmission and distribution level, how revenues are set and the incentives for networks to deliver their services at least cost. AEMC Chair Anna Collyer said the review was both timely and necessary.
“Renewables now account for more than half of electricity generation in the national market. Transmission networks play a critical role in keeping the system secure, as its characteristics change and need the right framework to do so effectively,” Ms Collyer said.
At the same time, distribution networks are being transformed with nearly half a million home batteries installed in the past five years and last month, one in six cars purchased was fully electric.”
“Power now flows in two directions, new products and services are rapidly emerging, and the rules that govern how networks operate and get paid need to reflect that. This review is about making sure consumers get value for the significant share of their power bill that goes to network costs, now and into the future."
Structure of the review
Given the size and complexity of the issues to be examined, the review will be structured in two packages.
Package 1, commenced today, examines what services networks should provide, and which services should be subject to competition
It will consider service classification, ring-fencing, and the arrangements that govern how network businesses interact with contestable markets, areas where the energy transition is already challenging the existing framework.
Package 2 will commence shortly and will consider how the framework ensures networks operate and spend efficiently, how risks and costs are shared between network businesses and consumers, and whether the process for setting network revenues is working as it should. Package 2 is expected to conclude with a final report in the fourth quarter of 2027.
EV charging infrastructure
Package 1 is being initiated alongside two related rule change requests that also go to fundamental questions about the role of network businesses in emerging markets.
The first, from Energy Networks Australia, proposes allowing distribution networks to install and operate kerbside electric vehicle (EV) charging infrastructure as a regulated service.
The second, from Nexa Advisory, proposes strengthening the rules that govern how network businesses operate in markets where third party providers, such as Charge Point Operators, can also compete.
AEMC Chair Anna Collyer said the rule change requests raised important questions at the heart of the review.
"Reliable and convenient charging is critical to supporting the mainstream uptake of electric vehicles, particularly for people who cannot charge at home, those in apartments, townhouses, or without off-street parking," Ms Collyer said.
"These rule change requests raise fundamental questions, including whether and how electricity networks should play a role in providing EV charging infrastructure, and under what conditions. Considering them alongside the review will allow us to reach consistent conclusions across both processes.”
The AEMC is also separately progressing a rule change request from the Commonwealth Government related to its $40 million Accelerating EV Charging Program. That process is being run on an accelerated timeline, with a final determination expected by the end of 2026 which would allow the program to commence in 2027.
Australian Energy Regulator reviews to run in parallel
The Australian Energy Regulator (AER) will also today initiate a combined review of its Distribution Ring-Fencing Guideline and Shared Asset Guideline.
Its review covers immediate issues that can be addressed through its guidelines, while the AEMC's review considers whether changes to the National Electricity Rules or other more principles-based changes are warranted.
The AEMC and AER will work collaboratively throughout both processes to ensure issues are considered through the appropriate forum and to support efficient stakeholder engagement.
Submissions and next steps
The AEMC is seeking submissions on the Package 1 consultation paper by 23 July 2026. A public forum will be held in August, with further details about precise timing available closer to the time. Additional engagement opportunities including working groups and bilateral meetings will be available throughout the process.
For more information, visit the project pages for each of the rule change requests: Electricity Network Regulation Review, Enabling distribution network service provider led electric vehicle charging infrastructure and Clarifying distribution ringfencing in emerging energy markets
About the AEMC
The AEMC is Australia's independent energy market rule maker. We make and amend the rules that govern electricity and gas markets, conduct reviews of the energy sector, and advise Australian governments on energy market development. Our work is guided by the long-term interests of energy consumers, including reliable, safe and affordable energy.
Media: Jessica Rich, 0459 918 964, media@aemc.gov.au