Australian electricity and gas markets – February 2025 and March 2025 Update

In our February and March update, we take a look at the latest rule changes and market updates affecting participants in the Australian electricity and gas markets.

What you need to do

• Stakeholders should note the market updates below, and note any impacts on their compliance obligations.

National Electricity Rules

Final Rules

On 27 March 2025, the Australian Energy Market Commission (AEMC) published a final determination and final rule to remove Electricity Transmission Information Guidelines. The rule means that:

• Transmission Network Service Providers will not need to provide the same information to the Australian Energy Regulator (AER) under both the Annual information Orders for transmission networks (the Orders) and the Information Guidelines; and
• The AER will not need to publish and maintain the Information Guidelines.

Draft Rules

On 13 February 2025, the AEMC released a more preferable draft rule and a draft determination including network resilience in the National Electricity Rules program. The draft rule:

• Establishes a formal framework for distribution network resilience in the National Electricity Rules; and
• Provides regulatory clarity for Distribution Network Service Providers (DNSPs) and the AER around how to assess the economic efficiency of resilience expenditure proposals to reduce the risk and impact on consumers of power outages caused by severe weather events.

Submissions for the draft determination and rule close on 27 March 2025.

On 13 March 2025, the AER released its draft determination for the Default Market Offer (DMO) for electricity prices in 2025-2026. The DMO is an electricity price safety net for residential and small business customers on standing offers in New South Wales (NSW), South East Queensland (SE Queensland) and South Australia (SA). The AER invites written submissions on the draft DMO by close of business 3 April 2025.

Market Price Cap

On 27 February 2025, the AEMC updated its market price cap for 2025-26. The National Electricity Rules dictate that the National Energy Market's market price cap (MPC) and cumulative price threshold (CPT) must be adjusted in line with the consumer price index by 28 February each year.

From 1 July 2025 to 30 June 2026, the MPC will be $20,300/MWh and the CPT will be $1,823,600/MWh.

Consultation Papers

The AEMC is seeking feedback on its:

• National Energy Retail Amendment (Improving the application of concessions to bills) Rule consultation paper by 6 March 2025.

National Energy Retail Rules

No energy retail rule requests were initiated in February 2025. No AEMC determinations relevant to the National Energy Retail Rules were published.

On 27 March 2025, the AEMC made a more preferable draft rule. The draft rule aims to:

• increase support and improve outcomes for hardship customers if they do not take up their retailer's deemed better offer. This includes not incurring more debt or expenses than is necessary;
• place a stronger onus on retailers to assist hardship customers with deemed better offers but afford retailers flexibility in delivering these protections; and
• improve the reporting and transparency of the type of hardship offers customers are on and assist the AER with monitoring to ensure retailers comply with the proposed rule.

The AEMC are seeking feedback on our draft determination and draft rule by 8 May 2025.

On 27 March 2025, the AEMC made a more preferable draft retail rule. The draft determination seeks to improve consumer protections for small customers on retail energy contracts, increase the certainty and transparency of the prices they will pay and improve confidence in the retail energy market.

National Gas Rules

No gas rule change requests were initiated in February 2025. No AEMC determinations relevant to the National Gas Rules were published.

On 20 March 2025, the AEMC published a consultation paper and are seeking stakeholder feedback on building a reliability standard for the ECGS and updating associated market settings for facilitated gas markets. Submissions close 17 April 2025.

Other Updates

The AER released updated guidance on the family violence protections in the National Energy Retail Rules.

The AER published version 5 of the Electricity transmission ring-fencing guideline. The amendments seek to ensure the guidelines remains fit for purpose by:

• extending ring-fencing obligations to negotiated transmission services;
• reinforcing that transmission network service providers must not use their monopoly to discriminate between providers of contestable connection services; and
• introducing additional reporting and compliance obligations.

Transmission network service providers will need to comply with version 5 of the guideline from 24 August 2025.

The AEMC initiated a review into the wholesale demand response mechanism, with the release of a consultation paper on 13 March 2025.

Key considerations include:

• The impact of recent market reforms on two-sided market development;
• Whether the WDRM continues to serve its intended purpose given evolving market conditions; and
• How the WDRM fits within the broader framework of demand-side participation.

Written submissions responding to the consultation paper close COB 24 April 2025.

On 17 March 2025 the AER released the Review of the AER exemptions framework for embedded networks Draft Decision, incorporating Notice of Draft Instruments for the Draft Retail Exempt Selling Guideline (version 7) and Draft Network Exemptions Guideline (version 7), along with draft guidelines for consultation. This framework pertains to the regulatory exemptions granted to certain energy providers operating within embedded networks, which are private electricity networks typically found in apartment buildings, shopping centres, and retirement villages.

The AER stated that the objectives of the review were to:

• better understand the harms, or risk of harms, residential embedded network customers may be facing;
• better understand the benefits of residential embedded networks, and the extent to which customers are receiving them; and
• determine whether they should make changes to the Network Exemptions Guideline and Retail Exempt Selling Guideline (the guidelines), to address any issues identified.

Stakeholders are invited to make submissions by 28 April 2025.

On 31 March 2025, the AER published the Phase 3 low-voltage network visibility report. This report identifies the actions the AER will take to ensure distribution networks are transparently providing information to stakeholders and the public.

The four actions that are proposed by the AER to ensure there is adequate visibility of distribution network data for third parties are:

• Support for a change to the National Electricity Rules to ensure DNSPs publish key information they possess;
• Publishing network performance metrics as reputational incentives for DNSPs to facilitate the connection of distributed energy resources;
• Investigating if new incentive arrangements are needed to align DNSP actions with consumer outcomes; and
• Encouraging innovation in data sharing within the regulatory framework through policy-led sandboxing.

Authors: Dan Brown, Partner; Dale Gill, Partner; Paul Newman, Consultant; Savannah Tindiglia, Graduate and Isabella Skene, Paralegal.