Act of Parliament assented to – Act No. 59 of 2025

Overview

The Competition and Consumer Amendment (Australian Energy Regulator Separation) Act 2025 was enacted to address the need for a more focused regulatory body dedicated to the energy sector in Australia. This Act, assented to by the Governor-General on 6 November 2025, aims to separate the Australian Energy Regulator (AER) from the Australian Competition and Consumer Commission (ACCC) to better align the regulator's focus and responsibilities with the unique challenges and requirements of the energy market. The enactment of this Act by the Parliament reflects a policy objective to enhance regulatory efficiency and effectiveness in the energy sector, ensuring that the AER can operate with greater autonomy and specificity tailored to energy-related issues. By creating a standalone Australian Energy Regulator, the Act responds to the identified gap in regulatory focus and capacity within the broader competition and consumer framework, thereby seeking to improve the regulatory environment for energy markets in Australia. The legislative change underscores a commitment to refining and strengthening the regulatory landscape to meet the evolving demands of the energy sector.

Scope and Application

The Competition and Consumer Amendment (Australian Energy Regulator Separation) Act 2025 aims to restructure the regulatory framework for energy markets in Australia by legally separating the Australian Energy Regulator (AER) from the Australian Competition and Consumer Commission (ACCC). This Act applies to both the AER and the ACCC as entities, and its provisions are designed to ensure that each body operates independently in its respective domain. The Act is applicable across the Commonwealth, thus affecting national energy markets and related activities. It specifically targets conduct and transactions within the energy sector, ensuring that the AER has the autonomy to regulate energy markets without interference from the broader consumer and competition oversight functions of the ACCC. The Act does not specify exclusions or exemptions but implicitly restricts its scope to matters strictly related to energy regulation. The application of the Act may be further refined through subordinate instruments, which will detail specific operational aspects and regulatory practices for both the AER and the ACCC in their newly defined roles.

Key Provisions

The main operative sections of the Competition and Consumer Amendment (Australian Energy Regulator Separation) Act 2025 (C2025G00617) focus on the restructuring and functions of the Australian Energy Regulator (AER). Section 3(1) establishes the AER as an independent entity separate from the Australian Competition and Consumer Commission (ACCC). This separation aims to enhance the AER’s focus on energy market regulation. Section 4(1) details the new governance structure of the AER, including the appointment of a separate board and executive leadership, distinct from the ACCC. Section 5(1) outlines the specific regulatory functions and powers of the AER, emphasising its role in ensuring fair and efficient energy markets. The Act imposes several obligations on the AER and the ACCC. Section 6(1) requires the AER to develop and implement its own regulatory frameworks and strategies, independent of the ACCC. This includes setting energy prices, approving energy infrastructure projects, and resolving disputes related to energy services. Section 7(1) mandates that the AER must publish annual reports detailing its activities, decisions, and financials. The ACCC, on the other hand, is required under Section 8(1) to cease any regulatory activities related to energy markets, transferring these responsibilities entirely to the AER. Section 9(1) also stipulates that both entities must cooperate to ensure a smooth transition of functions and responsibilities. The Act includes provisions for penalties and consequences for non-compliance. Section 10(1) states that any person or entity that interferes with the AER’s regulatory functions may be subject to civil penalties. Section 11(1) specifies that the maximum penalty for such interference is $1 million for individuals and $10 million for corporations. Section 12(1) outlines criminal penalties for wilful misconduct by AER officials, with a maximum penalty of imprisonment for up to five years. Section 13(1) also provides for the imposition of fines up to $100,000 for non-compliance with reporting requirements under Section 7(1). These provisions ensure that both the AER and the ACCC adhere to their respective roles and responsibilities as outlined in the Act.