The AEMC has released draft rules to improve how gas supply is managed in Australia's east coast energy system - including new guardrails on when and how the market operator can intervene as a last resort.

Gas continues to play an important role in Australia's energy system - for households, for industries including manufacturing, construction and agriculture, and for the electricity grid, where gas-fired power plants provide critical stability support as coal-fired power gradually retires.

Forecasts from the Australian Energy Market Operator (AEMO), the Australian Competition and Consumer Commission (ACCC) and the Commonwealth's Future Gas Strategy all point to the risk of supply shortfalls in the medium term as the system transforms.

Getting the rules right now reduces the risk of more disruptive and costly interventions later - costs that fall not just on gas users but on electricity consumers too.

The draft rules, submitted by Energy Ministers, propose a package of targeted, practical reforms designed to give the market and AEMO better visibility and tools to anticipate and manage any supply risks before costly last-resort interventions become necessary.

AEMC Chair Anna Collyer said the reforms were designed to give the market every opportunity to act before intervention becomes necessary.

"Gas will continue to play an important role in Australia's energy system as it transitions, and it's our job to make sure the rules keep pace with that,” Ms Collyer said.

These reforms give industry the visibility, tools and time to better respond to supply risks themselves, as well as give AEMO clear boundaries for when and how it steps in if they can't. That balance matters for consumers."

The draft rules propose two key reforms, supported by broader changes to how information is shared across the market:

  • Clearer warning signals: A new framework would require AEMO to assess and communicate gas supply risks more clearly, using a tiered structure that would escalate from early risk signals through to a critical supply threat. This would give market participants time to respond through normal commercial means before any intervention is required.
  • Better forecasting: Enhancements to AEMO's Gas Statement of Opportunities and Victoria's gas planning reports would provide the market with more granular, region-specific forecasts of where and when supply gaps may emerge — giving industry and investors better information to plan and act. The draft rules would also update governance arrangements to ensure market settings stay current over time.

The proposed reforms also address what happens if the market cannot resolve a supply threat on its own.

AEMO already has the legal power to secure gas supply and demand response when the market cannot. The draft rules would not create a new power - they would establish, for the first time, clear rules for when and how that power can be used.

Key features of the proposed Supplier of Last Resort (SoLR) mechanism:

  • Last resort, not first response: AEMO would only use the SoLR mechanism after the market has had a full opportunity to respond to an identified threat. It would sit towards the end of a hierarchy of available tools - other options would need to be exhausted first.
  • Cost protection for consumers: A price limit would apply to what AEMO can pay for contracted SoLR services, protecting consumers from excessive costs while still allowing AEMO to secure what it needs.
  • Transparency and accountability: AEMO would be required to publish notices when it establishes, activates and ceases SoLR contracts, and maintain a separate financial account for SoLR activity. Post-implementation reporting would also be required.

Ms Collyer said that where AEMO does need to step in, the AEMC considers a high level of transparency and accountability to be essential - for industry, consumers and governments alike.

"What we're proposing is to take a power that already exists in law and make it predictable. Under the draft rules, industry would know exactly what AEMO can do, when it can do it, and what it will cost. That transparency is good for the market and good for consumers."

The AEMC is now seeking public submissions on both draft rules. The deadlines are staggered to give stakeholders time to consider each document:

An information session for stakeholders will be held on Friday, 13 March 2026.

Final determinations are expected in mid-2026.

About the AEMC

The Australian Energy Market Commission (AEMC) is an independent statutory body that advises Australian governments on energy market rules and conducts reviews of the energy sector. The AEMC's work is guided by the long-term interests of energy consumers - including reliable, safe and affordable energy. This work forms part of a broader package of gas market reforms underway across governments and market bodies.

Media:  Jessica Rich, 0459 918 964, media@aemc.gov.au