The AER exists to ensure consumers are better off now and in the future

Consumers are at the heart of everything we do.

The AER works to ensure energy consumers have access to a reliable and secure market and that they pay no more than necessary for energy to their homes and businesses.

We do this by setting the maximum amount of revenue that monopoly electricity networks and natural gas pipelines can earn from consumers.

We monitor network, wholesale and retail market performance and compliance with national energy legislation. We take enforcement action when there is potential or actual harm to consumers.

We set the Default Market Offer which is a price cap on standing energy contracts and we provide a price comparison website, Energy Made Easy, so consumers can find the best energy contract for them.

Where we fit in Australia's energy system

The AER is one of 3 major market bodies that oversee national electricity and gas markets in Australia. 

Collectively, the AEMC, AEMO and the AER support the Energy and Climate Change Ministerial Council in its role to develop and coordinate national energy policy.  

While the market bodies work closely together, each is an independent decision-maker with clear functions, accountabilities and powers.  

Illustration showing the hierarchy of national energy market governance.

Markets we oversee

We regulate electricity networks and gas pipelines in all states and territories of Australia, except Western Australia.

Electricity

The National Electricity Market (NEM) operates across 6 interconnected states and territories in southern and eastern Australia and is made up of almost 800,000 km of overhead lines and underground cables in its distribution and transmission networks. The NEM services close to 11 million customers. 

Western Australia and the Northern Territory are not connected to the NEM. They have their own electricity systems and separate regulatory arrangements. 
Graphic showing the Eastern side of a map of Australia, with the electricity distribution routes shown.
A grey map of eastern Australia on a white background, with fully regulated pipelines and lightly regulated pipelines shown.

Gas

The total length of pipe in the gas distribution networks across the 7 interconnected states and territories is just over 73,500 km long, servicing more than 4.3 million customers.

Read the latest gas and electricity network performance data

Our functions

Energy networks regulation 

The AER regulates electricity networks and natural gas pipelines by setting the maximum amount of revenue they can earn from consumers. 

Network businesses submit proposals to the AER on their required revenues and we make decisions based on factors including: 

  • Projected demand for electricity and natural gas 

  • Age of infrastructure 

  • Operating and financial costs 

  • Network reliability and safety standards. 

Decisions generally apply for 5 years and network businesses adjust their prices annually during the 5-year period. 

Wholesale energy market regulation

Wholesale gas and electricity markets are where generators, distributors and retailers buy and sell energy.  

Prices are set by matching energy supply with real time demand and consumption by households and businesses.  

The AER monitors  

  • Market dispatch and prices

  • Participant bidding and rebidding 

  • Network constraints and outages 

  • Demand forecasts 

  • Forecasts of production and capacity. 

We also report on market performance and outcomes, prices outside normal thresholds and compliance monitoring activities. 

Retail energy market regulation

The AER has a key role in enabling consumers to make informed choices about their energy supplier. 

Our role includes:  

  • Setting the Default Market Offer to protect consumers from unjustifiably high prices  
  • Approving customer hardship policies required by energy retailers  
  • Administering a retailer of last resort scheme, if an energy retailer fails  
  • Monitoring and enforcing compliance with energy retail law and rules 
  • Approving retailer authorisations and exemptions 
  • Administering the retailer reliability obligation.   

We do not set retailers’ energy prices. We require retailers to provide their most up-to-date energy contract for our Energy Made Easy bill comparison website. 

Laws that guide us

The AER operates within a legislative and regulatory framework for Australia’s energy markets, where South Australia is the lead legislator. 

The National Electricity Law 

The National Gas Law 

The National Energy Retail Law

The AER’s Compliance and Enforcement team works to ensure that market participants are operating fairly and that consumers are protected.