News Topic ID

AEMC finalises rules for customers leaving the gas network

02 April 2026

As more Australians choose to switch away from gas to electrify, the Australian Energy Market Commission (AEMC) has finalised Australia's first national framework for customers who want to undertake an abolishment to permanently remove their gas connection.

The new rules establish clear definitions, cost structures and information requirements for gas abolishment services, filling a gap in energy regulations at a time when residential and small commercial gas demand is projected to fall by around 80 per cent over the next two decades.

Why this matters

Until now, there have been no consistent national rules for customers wanting to abolish their gas connection. This has led to confusion about the difference between disconnection (which can be reversed) and abolishment (which is permanent), and uncertainty about who should pay.

As more customers leave the gas network, the costs of operating and maintaining it are shared among fewer remaining customers. Without a clear framework, those costs, including the costs of others' abolishments, risk being passed on to customers who often have the fewest choices about their energy supply: renters, apartment dwellers and low-income households.

For most customers, the new framework will mean no change other than access to better information about their options.

What the new framework introduces

The final rules establish:

Clear, outcomes-based definitions distinguishing disconnection from abolishment
Model standing offers for basic abolishment services with upfront pricing, approved by the Australian Energy Regulator (AER) to ensure charges are prudent and efficient
Cost-reflective charging, so customers who abolish pay the efficient cost of the service rather than those costs being spread across remaining customers
New information requirements so customers can make informed decisions
Flexibility to accommodate different jurisdictional approaches to the future of gas, including phased decommissioning.
Distributors remain responsible for ensuring their networks meet safety requirements, with these costs shared across all customers

Planning for the future of gas networks remains the role of jurisdictional governments, and the new framework is designed to support this.

AEMC Chair Anna Collyer said the framework supports efficient and equitable outcomes as gas demand declines.

"Customers have the right to choose the energy services that work for them, unless there is a safety issue or jurisdictional policy that says otherwise. These rules give customers a clear pathway to leave the gas network on fair terms, while ensuring those who remain are not left paying for someone else's decision," Ms Collyer said.

"Importantly, these rules do not create a barrier for customers who want to switch away from gas. Customers can make the switch and then decide whether to disconnect or abolish their gas connection based on what is right for their circumstances."

The final determination also identifies issues outside the national energy framework and recommends that jurisdictional governments consider these alongside their electrification and decarbonisation policies.

What happens next

The new framework will be implemented in phases from 2027. Information requirements for distributors commence on 1 October 2026, with retailers to follow by January 2027. Key obligations for abolishment services will take effect at the start of each network's subsequent access arrangement period.

This longer lead time allows jurisdictional governments and safety regulators time to develop their approaches, while current costs to remaining customers remain low.

This determination is part of a broader package of AEMC gas reforms, including changes to gas connection charges and the Gas Networks in Transition review.

Visit the project page for the final determination and supporting materials.

About the AEMC

The 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.

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

AEMC proposes clearer rules to manage gas supply risks during Australia's energy transition

26 February 2026

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:

ECGS Enhancing reliability and supply adequacy arrangements - submissions close 9 April 2026
ECGS Supplier of last resort mechanism - submissions close 23 April 2026

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

AEMC proposes changes to gas connection charges to support transition to net zero

18 September 2025

The Australian Energy Market Commission (AEMC) is seeking feedback on a more preferable draft rule that proposes requiring newly connecting retail gas customers to pay the upfront cost of their connection, moving away from the current system where these costs are often shared across all customers.

The draft determination responds to a rule change request from Energy Consumers Australia and addresses challenges created by declining gas demand projected by the Australian Energy Market Operator.

The proposal aligns with the AEMC’s strategic narrative, which focuses on how the gas regulatory framework can best support consumers and the electricity system during the transition to net-zero emissions.

Under the current framework, when a new customer connects to the gas network, the connection costs are typically added to the gas distributors’ capital base and recovered from consumers over time. However, as fewer people use gas and more customers disconnect from networks, the remaining customers increasingly bear the cost of connections that may not be fully paid off.

AEMC Chair Anna Collyer said the proposed changes would particularly help to protect lower-income households, renters and apartment dwellers - who often face barriers to electrification - from bearing the costs of new connections as other users decide to leave the network.

“The existing approach was designed for growing networks, but it’s no longer fit for purpose in a context where gas demand is projected to decline, Ms Collyer said.

“Our preferable draft rule proposes ensuring that the people who benefit from new connections are the ones who pay for them while protecting existing customers from increased network costs.”

The draft rule is supported by AEMO’s Gas Statement of Opportunities and distributors’ own demand forecasts, with AEMO projecting distribution-connected residential and commercial demand will fall by around 30 per cent in the next 10 years and 70 per cent over 20 years.

“This is about giving customers better price signals so they can make informed decisions about their energy choices,” Ms Collyer said.

“Customers will still be able to connect to gas if they choose to, they'll just pay the true cost of connecting upfront rather than having those costs spread across all gas users."

If implemented following consultation, our rule would apply to new retail customers connecting to the main gas distribution networks in the ACT, NSW, South Australia and some Queensland gas distribution networks from 1 July 2026.

It would maintain existing consumer protections, including standardised pricing for basic connections and regulatory oversight by the Australian Energy Regulator.

The proposed changes aim to:

prevent new gas connection costs from being added to gas distributors’ capital bases, protecting existing customers from rising network costs
provide clearer price signals to help customers make informed decisions about their energy choices
support a more equitable allocation of costs and risks in the energy transition.

As part of the energy system's transition to net zero emissions, the AEMC has published a separate consultation paper today on related rule change requests addressing capital expenditure criteria, depreciation, asset redundancy and planning requirements for gas distribution networks in the context of projected declining demand.

The AEMC is seeking stakeholder feedback on the draft determination until 30 October 2025. A final decision is expected by 11 December 2025.

Visit the project page for more information and contact details.

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

Enhancing the Retailer of Last Resort scheme

20 June 2024

The Australian Energy Market Commission (AEMC) has released its final report with 10 recommendations to improve the Retailer of Last Resort (RoLR) scheme, drawing on valuable insights gained by regulatory agencies, market participants, and governments during the energy crisis of 2022, which saw an unprecedented number of retailer failures.

AEMC Chair Anna Collyer said the recommendations would simplify and improve both the RoLR scheme and the gas directions framework, providing market participants with greater certainty and clarity before, during, and after retailer failure events.

‘’The recommendations focus on supporting more timely access to critical information in the event of retailer failures, reducing the cost of such failures for consumers and designated RoLRs, and improving incentives within the RoLR scheme.

‘’These recommendations were informed and shaped through extensive stakeholder consultation over the past two years.

''We believe they will enhance the RoLR scheme as an effective safety net, helping address the risks faced by retailers and consumers when a retailer fails, ultimately supporting better market outcomes and ongoing financial resilience in the retail market," Ms Collyer said.

In the National Electricity Market’s (NEM) competitive retail market, high levels of entry and a dynamic spot market create the risk of retailer failures. As such, retailer failures are likely to occur over time, necessitating efficient and effective exit arrangements that ensure continuity of supply for impacted consumers while minimising costs and systemic risks.

Most of the AEMC’s recommendations involve changes to the National Energy Retail Law (NERL), meaning they must be implemented by jurisdictions.

‘’The AEMC welcomes the opportunity to work constructively with jurisdictions, to progress these recommendations for implementation,’’ said Ms Collyer.

Background:

The RoLR scheme protects consumers by ensuring continuity of supply to a customer if their retailer fails. This framework is supported by a gas directions framework which allows the AER to direct gas supply in the event of a retailer failure.

Between 2012 and 2022, the RoLR scheme had only been used four times, and the AER had never used its gas directions powers. Following the unprecedented number of retailer failures in mid-2022, Energy Ministers sought the AEMC’s expert advice on managing retailer failures and improving market resilience.

A key recommendation supported by Energy Ministers was for the AEMC to initiate this Review to consider improvements to the RoLR scheme. Our final report and 10 recommendations deliver upon this work.

View the project page for more information and contact details.

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

Consultation starts on rule changes on compensation for AEMO gas direction

22 June 2023

The Australian Energy Market Commission (AEMC) is considering a rule change request relating to compensation for market participants that may be impacted following intervention by AEMO in gas markets.

Federal and State Energy Ministers recently placed additional responsibilities on the Australian Energy Market Operator (AEMO) to monitor threats and risks to gas supply within Australia’s East Coast Gas System (ECGS) and to take actions to address shortages and ensure reliability for consumers.

Through these responsibilities, AEMO may make directions to support the reliability and adequacy of supply.

In the event AEMO intervenes in the ECGS, participants may incur costs and be eligible for compensation.

Compensation measures for the broader ECGS are currently based on the existing compensation frameworks in the Victorian Declared Wholesale Gas Market (DWGM). However, recent experiences in the National Electricity Market (NEM) and DWGM compensation frameworks have highlighted opportunities for refinements of the compensation and dispute resolution frameworks.

The AEMC is now investigating proposed changes from Energy Ministers to improve clarity, efficiency and consistency for entities that may be affected by AEMO interventions.

Examples of potential solutions identified by Energy Ministers, and explored in the consultation paper, include changes to the governance and procedural arrangements, the scope of the frameworks, and the funding arrangements that underpin them.

The consultation paper outlines the issue, proposed solutions and asks a number of key questions for stakeholders.

Submissions close 20 July 2023. A public forum will be held on 6 July to assist those preparing written submissions, please click here to register.

For more information, visit the project page.

Media: Nicole Stokes, 0401 826 522, media@aemc.gov.au.

New rules to manage the risk of reduction in supply for Victorian gas users

15 December 2022

The Australian Energy Market Commission (AEMC) has made a final rule to enable the Australian Energy Market Operator (AEMO) to better respond to and manage the risk of reduction in supply for Victorian gas users that may arise due to the tight demand-supply conditions expected from 2023 to 2025.

The final rule provides an interim solution to the low levels of contracted capacity at the Dandenong liquefied natural gas (LNG) storage facility observed since 2019 by requiring AEMO to act as a buyer and supplier of last resort to ensure AEMO does not crowd out other participants.

The final rule also sets out the contractual, cost recovery, proceeds distribution, accountability and transparency arrangements that will apply to the buyer and supplier of last resort roles over this period.

These measures are intended to reduce the risks to the safety, security and reliability of gas supply in Victoria and support the efficient operation of the declared wholesale gas market (DWGM) over 2023-2025.

Under the rule, AEMO will be able to manage threats to system security in the DWGM more effectively through the use of the Dandenong LNG facility, even if market participants do not contract for LNG capacity themselves.

The rule was made in response to a rule change request submitted by the Victorian Minister for Energy, Environment and Climate Action (Victorian Minister) on 8 August 2022. The rule change request was one of the priority actions that was agreed to by Energy Ministers on 8 June 2022, as they acknowledged the critical role of gas storage facilities.

The final rule will be in operation from 2023 to 2025 while the Energy Ministers' gas market supply adequacy and reliability reform program is undertaken.

Visit project page for more information and contact details.

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

AEMC recommends rules for hydrogen and renewable gases

24 November 2022

Recommended rules that will help pave the way for Australia’s hydrogen and renewable gas industry and support our emissions reduction plans have been sent to Energy Ministers for approval.

The Australian Energy Market Commission’s (AEMC) recommended rules enable Energy Ministers to change the national gas and retail regulatory frameworks so that low-level hydrogen gas blends and renewable gases can be safely supplied through existing distribution pipelines to appliances in homes and businesses.

Under the Review’s terms of reference, the AEMC was required to consult upon the proposed rules contained in the final report. Having done this, we are now publishing the recommended rules.

AEMC Chair Anna Collyer says these rules represent critical steps towards the development of a national hydrogen and renewable gas industry.

“The changes we are recommending be made to the framework aim to provide clear ‘rules to the game’ for future potential investors, and pilot projects that are taking those key steps today," Ms Collyer said.

"We want to ensure those investors can confidently make informed decisions that will in turn grow the sector, paving the way for a decarbonised economy.

“We can’t know exactly what shape a net zero power system will take, but we can define the problems we need to solve to get there and create space for innovation to find the solutions.”

In line with the terms of reference, once the AEMC provides Energy Ministers with recommended rules for their approval, the legislation and rules would then be made.

Visit project page for more information and contact details.

Media enquiries: Georgina Kentwell 0411 043 964, media@aemc.gov.au

AEMC publishes final rule to incorporate distribution connected facilities in Victorian gas market

08 September 2022

The Australian Energy Market Commission (AEMC) has made a final rule to allow distribution connected facilities to participate in the Victorian declared wholesale gas market (DWGM). These facilities will be able to supply natural gas, low-level hydrogen blended gas, biomethane and other renewable gases.

Currently, the Victorian DWGM only recognises transmission-connected facilities and does not allow market participation from entities connected to distribution pipelines.

This work addresses that by amending the National Gas Rules (NGR) to also recognise facilities connected at the distribution level. The new framework will commence on 1 May 2024.

Chair of the AEMC, Anna Collyer said the final rule will provide the foundation for innovation that will allow the hydrogen industry to develop further.
“These reforms will enable proposed pilot projects to participate in the Victorian gas market, encouraging technological innovation in an evolving market and regulatory environment as it seeks to promote safety, reliability, and security of supply,” Ms Collyer said.

The rule change will ensure the current design of the Victorian gas market is maintained whilst clarifying the roles and responsibilities of all market participants.

The changes primarily apply to distribution connected facilities with minor changes being made to existing facilities where a cohesive approach was required. The changes are categorised across three key areas:

Market operations, including registrations, scheduling and bidding
Market settlements, including title, custody and risk, and allocations
System operations, including connections, metering, and gas quality.

The AEMC notes that there may be technical matters governed by Victorian legislative and regulatory arrangements that still need to be considered by other bodies to safely enable injections into distribution networks which are beyond the scope of this rule change and the AEMC’s rule making power.

The Commission recommends stakeholders collaborate with Energy Safe Victoria, the Victorian Department of Energy, Land, Water and Planning, and any other relevant regulatory bodies to progress any further work required to enable distribution connected facilities to operate in a safe and efficient manner.

This rule change was requested by the Victorian Minister for Energy, Environment and Climate Change, The Hon. Lily D’Ambrosio and works towards facilitating the Victorian Government work program, such as the Renewable Hydrogen Industry Development Plan, Gas Substitution Roadmap, Towards 2050: Gas Infrastructure in a Zero Emissions Economy initiative and Climate Change Strategy to reach net-zero emissions by 2050.

This rule change was progressed in parallel with the AEMC’s Review into extending the regulatory framework to hydrogen and renewable gases. The final report has also been published today.

Visit the project page for more information and contact details.

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

AEMC publishes final report for hydrogen and renewable gas review

08 September 2022

The Australian Energy Market Commission (AEMC) has recommended to Energy Ministers that changes be made to the national gas and retail regulatory frameworks to enable the natural gas sector to use hydrogen and renewable gas to support Australia’s emissions reduction plans.

The recommendations in the final report and accompanying proposed draft rules published by the AEMC are critical steps toward the development of a national hydrogen and renewable gas industry.

The AEMC’s recommendations pave the way for setting up national regulatory frameworks so that hydrogen blends and renewable gases can be safely supplied through the existing distribution systems to appliances in homes and businesses.

AEMC Chair Anna Collyer said improvements to the regulatory framework will lay the foundations for the development of a decarbonised gas sector and keep Australia firmly at the forefront of reform in the hydrogen industry.

“From our perspective at the AEMC, hydrogen is fascinating because of the way it uniquely intersects with both gas and electricity markets. It’s a future source of renewable fuel, but it’s also set to become the largest industrial customer for electricity in the NEM’s history.

"We can’t know exactly what shape a net zero power system will take, but we can define the problems we need to solve to get there and create space for innovation to find the solutions.

That’s what this work does. Hydrogen has the potential to deliver solutions we need for a net zero future, and by extending the regulatory frameworks, we allow participants to develop their business and facilitate innovation,” Ms Collyer said.

The AEMC’s work not only offers certainty to market participants and investors but provides clarity around access to pipelines, as well as supports well-informed decision-making by market participants and consumers.

The AEMC’s final recommendations also aim to enable the safe supply of low-level blended gases and consumer protections including billing and pricing.

As well as outlining recommendations for an efficient, safe and secure framework, the final report also sets out recommended draft rule changes for the National Gas Rules and National Energy Retail Rules. These accompanying draft rules are intended to operationalise the policy recommendations.

Written submissions on the recommended draft rules are open until Thursday 13 October 2022.

The final initial rules will be provided to Energy Ministers in November 2022.
Visit project page for more information and contact details.

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

AEMC consults on interim LNG storage measures in Victoria’s Declared Wholesale Gas Market

01 September 2022

The Australian Energy Market Commission (AEMC) has started consultation on an urgent rule change to the National Gas Rules received from the Victorian Minister for Energy, Environment and Climate Action to reduce the risks to system security and public safety and improve the reliability of supply in the Victorian declared wholesale gas market (DWGM) between winter 2023 and 2025.

The rule change request was one of the priority actions that was agreed to by Energy Ministers on 8 June 2022, as they acknowledged the critical role of gas storage facilities.

The proposed rule would provide an interim solution to the low levels of contracted capacity at the Dandenong LNG facility observed since 2019 by requiring AEMO to act as a buyer and supplier of last resort to ensure AEMO does not crowd out other participants.

Submissions are invited from stakeholders on the matters identified in the consultation paper, and any other relevant issue by 29 September 2022. Written objections to the use of the expedited process need to be received by 15 September 2022. A final determination is expected to be published by 24 November 2022.

More information about the rule change can be found here.

For media inquiries: media@aemc.gov.au

Contact: Jessica Rich 0459 918 964

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