Watt’s up: Regulatory round-up – July 2025

The AER invites stakeholders to provide feedback on proposed conditions within the Retail Guideline, as part of its review of the exemptions framework for embedded networks. These new conditions require an exempt seller to:

• Include the contact of the relevant energy ombudsman scheme on their residential customers’ energy bills.
• Refund any credits applied to its customer’s account upon termination of the customer’s energy supply agreement.

The final instrument is anticipated to be released on or before 29 August 2025.

Implemented under the Primary Frequency Response Incentives rule, FPP introduces a double-sided mechanism that incentivises market participants in real time based on how their assets impact system frequency. Participants with helpful impacts on frequency will receive incentives, which are recovered from those with unhelpful impacts – forming a zero-sum system.

This interim guidance note takes a principles-based approach on the AER’s expectations for expenditure forecasting in relation to emissions reduction. It covers topics related to:

• Prescribed transmission services and standard control services for electricity distribution.
• Regulated pipeline services for gas expenditure.
• Other related matters such as tariffs and alternative control services, including public lighting.

The interim guidance note took effect on 16 June 2025.

Currently the DMO sets a price cap on how much energy retailers can charge households and small businesses on standing offer contracts in NSW, South Australia and south-east Queensland. It also acts as a reference price so customers can easily compare different electricity plans.

On 18 June 2025, the Australian Government announced it was reforming the DMO. The reformed DMO will:

• Still act as the maximum price retailers can charge customers on standing offers.
• Make sure those customers pay a fair and efficient price that only compensates retailers for the costs of supplying electricity.
• Move closer in line with other areas like Victoria.
• Help to set up the energy market to better reflect Australia’s changing energy grid.

The AEMC has introduced new reforms to:

• Protect customers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price if their energy plan's benefits change or expire.
• Remove unreasonably high penalties for not paying bills on time.
• Restrict retailers from increasing prices in market retail contracts more than once every 12 months.
• Prohibit retail fees for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers. 

The AEMC has expanded credit support options available to participants in the National Electricity Market, with particular benefits for smaller retailers and consumers.

The final rule will allow participants to provide up to $20 million each in cash as credit support, in addition to existing bank guarantee and letter of credit options.       

The Department of Industry, Science and Resources and the Department of Climate Change, Energy, the Environment and Water (DCCEEW) is reviewing gas market regulation. The review will consider:

• The effectiveness of current policies and regulations.
• Whether the regulatory interventions remain suitable.
• Opportunities for streamlining and consolidating the regulatory approach.
• Alternative approaches to addressing current challenges.

The current regulations will remain in place until the review is finalised and changes are made.

The purpose of the Electric Line Clearance regulations is to prevent vegetation growing too close to electric lines. If it does, this can result in safety risks.

The updates give effect to the National Electricity Amendment (Regulated stand-alone power systems) Rule 2022 which amended Chapter 6 of the NER to classify regulated stand alone power systems (SAPS) as standard control services. 

The changes were published on 30 June 2025.