On 25 June 2026, the Australian Energy Market Commission (AEMC) published a consultation paper that included Nexa Advisory’s rule change request on distribution ring fencing.  

This rule change request by Nexa Advisory seeks to strengthen the distribution ring-fencing arrangements to address what it describes as “existing deficiencies and emerging competitive challenges within contestable energy service markets”.

Nexa has proposed that the ring-fencing provisions and associated governance arrangements in Chapter 6 of the National Energy Rules (NER) be strengthened by:

• elevating core ring-fencing obligations and waiver conditions from the AER’s distribution ring-fencing guidelines into the NER
• only allowing Distribution Network Service Providers (DNSPs) to obtain ring-fencing waivers as a last resort where there is an independently verifiable market failure and measurable consumer benefit
• providing more guidance in the NER on affiliate dealings and data access, and branding and cross-promotion ring-fencing obligations
• introducing financial resilience requirements that can be used to financially ring-fence a DNSP if its financial position deteriorates, and
• providing for greater transparency of the AER’s compliance monitoring and enforcement activities and establishing a ring-fencing complaint handling process.

The rule change request is being conducted alongside the Electricity Network Regulation Review

The consultation paper that the Nexa rule change request is part of is also the first step for Package 1 of the Electricity Network Regulation Review (ENRR or the Review) and the Enabling DNSP led electric vehicle charging infrastructure (ERC0435) rule change request from Energy Networks Australia (ENA).  

These three projects raise important questions about the role of networks and the boundaries of network regulation. Considering these rule change requests alongside the review will allow the Commission to assess them against a consistent set of policy principles and in the broader context of the evolving regulatory framework.  

Package 1 of the ENRR (EPR0106) focuses on the question of what services NSPs should provide in a regulated capacity in this changing environment, and whether the current service regulation and contestability framework in the National Electricity Rules (NER) continues to promote the long term interests of consumers. Click here to view project page.

Submissions to the consultation paper are due by on 23 July 2026.

More on Enabling DNSP led electric vehicle charging infrastructure (ERC0435)  

This rule change request from Energy Networks Australia (ENA)  seeks to enable distribution network service providers to roll out kerbside electric vehicle charging infrastructure (EVCI) as a regulated service, and is also consulted on in the same paper. Click here to view project page.

Read the fact sheet: The Electricity Network Regulation Review and related rule change requests below for more information.

Extension for making a draft determination 

The AEMC will also extend the time to make a draft determination on the rule change request due to the breadth and complexity of the issues raised. We plan to publish a draft determination by 20 May 2027. This will allow the Commission to publish a directions paper at the end of 2026 to test draft policy positions and undertake stakeholder engagement. We will aim to provide a draft determination earlier than this date, if possible.  

Next steps for the rule change is as follows:

• Stakeholder consultation period until 23 July 2026
• The AEMC will host a public forum in August 2026
• A directions paper for both rule change requests will be published by the end of December 2026 alongside a final report for the ENRR Package 1
• We plan to publish a draft determination by 20 May 2027.