Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026

Explanatory Statement

Issued by the authority of the Minister for Climate Change and Energy

Competition and Consumer Act 2010

Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026

Legislative Authority

The Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026 (Amendment Regulations) are made under sections 44AH, 51AE and 172 of the Competition and Consumer Act 2010 (the Act) and amend the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 (the Electricity Retail Regulations).

Subsection 172(1) of the Act enables the Governor-General to make regulations, not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed, or that are necessary or convenient to prescribe for carrying out or giving effect to the Act.

Paragraph 44AH(1)(b) of the Act allows regulations to prescribe functions on the Australian Energy Regulator (AER), including the power to make legislative instruments under subsection 44AH(2).

Subsection 51ACAA(1) of the Act defines an industry code as a code that regulates the conduct of participants in an industry towards other participants in the industry, or towards consumers in the industry.

Section 51AE of the Act allows the regulations to prescribe an industry code and declare whether it is mandatory or voluntary.

Purpose and Operation

The purpose of the Amendment Regulations is to amend the Electricity Retail Regulations to strengthen consumer price protections in the retail electricity market and improve price transparency for small customers.

The Amendment Regulations achieve this by:

• introducing a new objective provision, which provides that the objective of the Electricity Retail Regulations, being the industry code, is to provide small customers with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service;
• introducing new matters that the AER must have regard to when determining the ‘comparison price set by the AER’, formerly known as the ‘reference price’;
• requiring the AER to develop and publish a guideline on its website setting out its intended approach and methodology for determining model annual usages, comparison price, and tariff caps;
• introducing new regulated tariffs and a new power for the AER to determine additional regulated tariff types;
• requiring electricity retailers to use the comparison price set by the AER as a comparison price for market offers; and
• introducing the new Solar Sharer Offer (SSO) and related provisions.

The Electricity Retail Regulations provide for two key functions in the market:

1.       to act as a safeguard on pricing for small customers on typical standing offers; and
2.       to enhance customers’ ability to evaluate market offers by providing a benchmark for comparison with some market offers.

In turn, the comparison price also acts to enhance retail electricity market competition.

The Electricity Retail Regulations did not include an explicit guiding objective. the purpose and objective of the Electricity Retail Regulations was inferred from documentation that accompanied the introduction of the Code in 2019. The introduction of a new objective provision clarifies the intended purpose and outcomes of the Electricity Retail Regulations as a price protection for small customers.

The Electricity Retail Regulations set out minimal requirements on the factors that must be considered in determining electricity retail pricing on typical standing offers, and how the benchmark is derived (the comparison price set by the AER). The requirements included that the reference price is set at a level that was a ‘reasonable price’ and that regard be given to the principle that retailers should be able to make a reasonable profit. A key change arising from the Amendment Regulations is that only the efficient costs to supply small customers on standing offers are included when determining retail electricity prices. This reinforces the purpose of the Electricity Retail Regulations as a price protection for small customers, as articulated in the policy objective. This means only modest costs associated with customer acquisition and retention should be included, and that any competition allowance (or headroom) should be excluded when determining retail cost estimates for standing offers.

The Electricity Retail Regulations previously set in place a minimum requirement that established an annual price for a given representative consumption level (the model annual usage). Retailers therefore had discretion in setting their own fixed and variable charges, provided that the annual price at the model annual usage reflected the regulated price level. This approach reduced the transparency of pricing outcomes for customers whose consumption was above or below the model annual usage. The Amendment Regulations require the regulated price to be established on a tariff-cap basis, meaning a cap will apply to the variable and fixed charges that a retailer may charge for standing offers. This improves transparency and provides stable price protection for small customers regardless of their individual consumption levels, and promotes greater consistency in the application of the comparison prices across retailers. The Amendment Regulations also provide discretion for the AER to determine whether there is value in introducing additional regulated tariffs, taking into account changing market conditions or jurisdictional standing offer policies. 

A key purpose of the Electricity Retail Regulations is to provide a valuable comparison tool to assist customer choice when engaging in the retail market. While the Electricity Retail Regulations already provided price protections for small customers on standing offers, including ensuring that a benchmark is available for customers when comparing these standing offers with market offers – known as the comparison price set by the AER – the Amendment Regulations introduce changes to ensure this benchmark operates more effectively in the competitive retail market. This includes easier-to-understand and more targeted benchmark prices where market offers are similar to regulated tariffs, while retaining a broader comparison price for other types of market offers.

The new objective provision and accompanying mandatory considerations provide clearer guidance on how retail electricity prices for standing offers are to be determined. The Amendment Regulations also put in place a requirement for the AER to develop and publish a guideline setting out its intended approach and methodology for determining retail electricity prices for standing offers. The purpose of this approach is to provide regulatory certainty and transparency, minimise the range of issues for consultation for each determination process, and enhance regulatory efficiency.

The Amendment Regulations also introduce the Solar Sharer Offer (SSO) into the Electricity Retail Regulations. A specific subset of retailers will be required to make this offer available for eligible small customers on an opt-in basis. The Amendment Regulations establish a suite of provisions relating to the SSO’s operation and regulation. In particular, they introduce obligations on retailers regarding how the SSO must be offered to small customers, including an obligation on retailers to discuss the suitability of this offer with inquiring small customers, given the value of this offer depends on a customer’s ability to shift consumption to the free usage period.

The Amendment Regulations also introduce a free usage period where small customers are not charged for electricity supplied by their retailer up to a reasonable use cap of 24 kilowatt hours. This includes provisions specifying matters the AER must have regard to when determining the free usage period, and guidance on how excess electricity use above the reasonable use cap should be priced.    

The introduction of the SSO provides consumers that have the capacity to adjust their behaviour with a regulated offer that also provides a mechanism to achieve energy bill savings. Further, the SSO delivers broader benefits to the market by incentivising behavioural change among customers who take up this offer and improving overall system efficiency by shifting consumption to periods of excess generation and low network utilisation.

Background

The Electricity Retail Regulations establish the framework that governs electricity retail pricing for small customers. The framework was introduced in 2019 following the Australian Competition and Consumer Commission’s (ACCC) Retail Electricity Pricing Inquiry (REPI), which identified widespread consumer detriment arising from complex and opaque retail offers, excessive discounts calculated off inflated standing offer prices, and weak competitive pressure on standing offers. The ACCC found that standing offers were no longer operating as an effective default protection for disengaged customers and were contributing to poor consumer outcomes.

The Electricity Retail Regulations were introduced to operate as both a reference price to improve price comparability for market offers and as a price cap on standing offers. The framework was intended to limit the extent to which retailers could rely on high‑priced standing offers to inflate discounts from market offers. It also sought to provide consumers with a clearer benchmark against which to compare market offers.

Reviews conducted in 2021 and 2025 identified several limitations in the existing framework.[1] The reviews raised concerns about whether the policy objectives of the Electricity Retail Regulations struck the right balance between protecting customer access to fairly priced electricity and maintaining incentives for retailers to compete and make a profit. In addition, relying on a single annualised comparison price did not adequately account for the increasing diversity of tariff structures in the market, such as time‑of‑use and other flexible pricing options. The framework also provided limited flexibility to distinguish between different tariff types or to respond to emerging market developments, including the growing uptake of distributed energy resources and changing electricity consumption patterns.

The Amendment Regulations are intended to modernise and strengthen this framework. They ensure all consumers can access a fair, trusted and reasonably priced electricity offer that reflects the essential nature of the service. The amendments also enhance the function of the Electricity Retail Regulations as a comparison tool for market offers by incorporating specific tariff types into the framework.

The Amendment Regulations require the AER to develop and publish a guideline setting out its intended approach to determining standing offer prices that meet the objective and the requirements of the Electricity Retail Regulations by 1 December 2026. The development of the guideline will be subject to regular consultation practices and will ensure the Default Market Offer (DMO) framework for electricity prices remains fit for purpose.

The introduction of the SSO as a new residential time‑of‑use standing offer will provide three hours of free electricity, up to a reasonable use cap of 24 kilowatt hours, during periods of high rooftop solar output, low wholesale prices and low network costs. It is designed to help households that can shift their appliance use to reduce their electricity bills and share in the broader benefits of increased solar generation, while still encouraging retailers to increase the diversity of offers and encourage further load shifting. Increasing load in the middle of the day will also enhance the stability of the power system, benefiting all consumers and improving system security.

The Amendment Regulations provide the AER with flexibility to consider a broad range of factors when determining the initial SSO settings. Subsequent determinations may adjust settings based on consumer response and lessons learned. The Amendment Regulations also incorporate a post-implementation review, which will provide the opportunity to refine aspects of the SSO, such as the reasonable use cap and retailer exemptions, amongst other factors, informed by monitoring and compliance related to uptake and broader market impacts.

The Amendment Regulations, including the updated functions of the framework and the new SSO, will commence on 1 July 2026. The Amendments were made in March 2026 to enable the AER to consider them when determining model annual usage and comparison prices for the financial year, in accordance with the statutory draft determination process under section 17 and the final determination under section 16, which will be made after the first business day after 25 May in the 2025-26 financial year, as required by section 17 of Electricity Retail Regulations. The AER’s final determination will commence on 1 July 2026, immediately after these Amendment Regulations commence.

Subsection 4(2) of the Acts Interpretation Act 1901 (as applied by paragraph 13(1)(a) of the Legislation Act 2003) allows the making of instruments, including the AER determination under section 16, in anticipation of the commencement of these Amendment Regulations.

Impact and Effect

The Office of Impact Analysis assessed the Impact Analysis as adequate on 23 February 2026. The Impact Analysis is at Attachment C.

Consultation

The Department of Climate Change, Energy, the Environment and Water (the Department) undertook consultation with the public and key stakeholders on the reforms implemented through the Amendment Regulations.

Public consultation on reforms to the DMO was undertaken between 18 June 2025 and 18 July 2025. The Department received 22 submissions from a broad range of stakeholders, including electricity retailers, consumer and community organisations, and state and territory governments. In addition, the Department held online stakeholder workshops in September 2025 to gather further targeted feedback. The feedback received through these processes informed the development of the DMO review outcomes paper. The outcomes paper can be found on the Department’s website at https://consult.dcceew.gov.au/consultation-on-reforms-to-the-default-market-offer.

In relation to the SSO, the Department undertook additional public consultation from 4 November 2025 to 28 November 2025. The Department received 76 written submissions (public and confidential) from a broad range of stakeholders, including electricity retailers, distribution network service providers, consumer and community organisations, state governments, academic institutions, consulting firms and members of the public. Feedback received through this consultation informed the design and implementation of the SSO. The Department published both the submissions that could be made public and an outcomes paper summarising stakeholder feedback and key design principles. The outcomes paper can be found on the Department’s website at https://consult.dcceew.gov.au/solar-sharer-offer.

The Department also undertook targeted consultation with market bodies, including the AER, the ACCC, the Australian Energy Market Commission (AEMC) and the Australian Energy Market Operator, in relation to the design and implementation of the reforms. Consultation with the AER, as the regulator for the amendments, focused on matters such as the operation of comparison prices, the regulation of tariff caps, and the AER’s new determination and guideline‑making powers. Consultation with the ACCC focused on compliance and enforcement considerations, including interactions between regulated and non‑regulated price caps and retailer communication requirements.

The new framework incorporates a requirement for the AER to publish a guideline setting out its approach to satisfying the objective of the Electricity Retail Regulations. The guideline-setting process is subject to stakeholder consultation and will ensure that, over the longer term, the approach to setting standing offer prices remain fit for purpose.

Given the extensive consultation undertaken on the policy measures implemented through the Amendment Regulations – including public consultation and targeted engagement with experts and stakeholders – it was not considered necessary to undertake separate public consultation on the text of the Amendment Regulations.

Details/ Operation

Details of the Amendment Regulations are set out in Attachment A.

Limitation of Merits review

The AER’s determinations of a model annual usage and comparison price amounts for non-regulated tariffs, tariff caps for regulated tariffs, determinations of additional regulated tariff types, and determinations of free usage periods for SSO regulated tariffs will not be subject to merits review.

Merits review would not be appropriate in relation to these determinations because they are legislative instruments and apply generally across the retail electricity market, rather than to the circumstances of individual persons. These determinations, which have regard to a particular amount or tariff type, are procedural, as they do not have substantive effect until they apply to a person through an offer by an electricity retailer and that person accepts the offer. The determinations are also based on detailed assessment of relevant cost components –  including wholesale market, network and retail costs – undertaken in accordance with established and transparently published methodologies and following public consultation on draft determinations. These processes provide appropriate safeguards and accountability in the absence of merits review.

Review of the AER’s determinations under the Electricity Retail Code would therefore not be appropriate. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see item 4.3 of What decisions should be subject to merits review? https://www.ag.gov.au/legal-system/publications/what-decisions-should-be-subject-merit-review-1999). The AER’s determinations will instead be subject to parliamentary scrutiny and the disallowance process.

Post-implementation review

As explained in the SSO outcomes paper, the Department will undertake a post‑implementation review of the SSO within two years of its commencement. The review will consider how the SSO is operating in practice and provide Government with the opportunity to consider refinements to the SSO, informed by AER monitoring of uptake, consumer responses, operational experience and broader market impacts.

Details/Other

The Amendment Regulations are compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

The Amendment Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

Authority: Sections 44AH, 51AE and 172 of the Competition and Consumer Act 2010.

Attachment A

Details of the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026  

Section 1 – Name

This section provides that the name of the Regulations is the Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026 (Amendment Regulations).

Section 2 – Commencement

This section provides for the commencement of the whole of the Amendment Regulations on 1 July 2026. These amendments will commence on that date to ensure they take effect for the next default market offer (DMO) determination under section 16 of the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019  (the Electricity Retail Regulations).

The Amendment Regulations were  made in early March 2026, enabling the AER to rely on the amendments when publishing the draft DMO 8 determination later in March 2026, and when making the final determination in May 2026. The final AER determination is intended to commence on 1 July 2026, immediately after the Amendment Regulations commence. 

Subsection 4(2) of the Acts Interpretation Act 1901 (as applied by paragraph 13(1)(a) of the Legislation Act 2003) allows the making of the AER determination in anticipation of the commencement of the empowering provisions as amended by these Amendment Regulations.

Section 3 – Authority

This section provides that the Amendment Regulations are made under the Competition and Consumer Act 2010 (the Act). In particular, the Amendment Regulations are authorised by paragraph 44AH(b) and sections 51AE and 172 of the Act.

Section 4 – Schedules

This section provides that the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 (Electricity Retail Regulations) are amended as set out in Schedule 1 to the Amendment Regulations.

Schedule 1 –Amendments

Item 1 – Section 4

This item substitutes the simplified outline in section 4 of the Electricity Retail Regulations with a new version that incorporates the new and updated provisions introduced by the Amendment Regulations.

Item 2 - Section 5

This item inserts new definitions in section 5 of the Electricity Retail Regulations.

A new definition of “comparison price set by the AER” is inserted, which replaces the former definition of “reference price” (see item 6). The term “comparison price set by the AER” better reflects the purpose of the reference price and how it is intended to be used by consumers.

The definition of “fixed charge” provides that, in relation to an electricity retailer, the retailer’s charge for supplying electricity to a small customer in a distribution region does not vary according to the customer’s usage of the electricity.

The term “flat‑rate tariff” means a tariff for supplying electricity that does not vary (wholly or partly) by any of the following:

 (a) the time of day the electricity is supplied;

 (b) the amount of electricity that is supplied on a day;

(c) the temperature, whether actual or forecast, on the day the electricity is supplied; and

(d) any other characteristic that varies, or may vary, during day the electricity is supplied.

The definition of “free usage period”, in relation to a residential customer, means a period in a day determined by the AER under new subsection 18(1) during which there is no variable charge for electricity used by the customer that does not exceed the reasonable use cap for the free usage period.

A note provides that a residential customer may incur a variable charge for electricity used during the free usage period that exceeds the reasonable use cap, as described in new paragraph 18(3)(b).

Item 3 – Section 5 (definition of lowest possible price)

This item repeals the signpost to the definition of lowest possible price. This amendment is consequential to the repeal of that definition in subsection 12(4) (see item 24).

Item 4 – Section 5 (definition of model annual usage)

This item repeals and substitutes a new definition of “model annual usage”, which provides that, in relation to supplying electricity in a distribution region to a small customer of a particular type:

• for electricity supplied under a non-regulated tariff, the AER determines certain matters under new paragraph 16(1)(a) for the year in relation to the supply; and
• for electricity supplied under a regulated tariff, the AER determines certain matters under new paragraph 16(1A)(a) for the year in relation to the supply.

There was previously only one model annual usage determined per distribution region. The Amendment Regulations introduce regulated tariffs and non-regulated tariffs to enable the AER to determine what it considers the representative model annual usage for these tariff types when determining comparison prices.

Item 5 – Section 5

This item inserts a new definition for “non-regulated tariff”, which means a tariff that is not a regulated tariff and for which the AER has determined a comparison price set by the AER amount under new paragraph 16(1)(b).

This item also includes a signpost that the definition of “reasonable use cap” is provided in paragraph 18(3)(a).

Item 6 – section 5 (definition of reference price)

Item 6 repeals the definition of “reference price”, which has been replaced by the term “comparison price set by the AER”, as explained above in item 2.

Item 7 – Section 5

This item inserts the following new definitions in section 5 of the Electricity Retail Regulations.

The term “regulated tariff” means any of the tariff types listed under the definition for which the AER has determined a tariff cap under subsection 16(1A). Paragraph 16(1A)(c) requires the AER to determine a tariff cap for a financial year that an electricity retailer may charge small customers of that type in that distribution region for supplying electricity under a regulated tariff of that type.

The term “residential customer” has the meaning given by section 6.

The term “smart meter”, in relation to a residential customer, means a digital device that automatically records electricity usage at frequent intervals (for example, every 30 minutes) at the premises to which the meter is connected, and sends the usage details remotely to the electricity retailer supplying the electricity to the customer.

An “SSO regulated tariff” means a flexible tariff for residential customers that includes a free usage period and a reasonable use tariff cap, determined under new section 18.

An “SSO standing offer” means a standing offer by an electricity retailer to supply electricity to a residential customer under an SSO regulated tariff.

The term “tariff cap” has the meaning given by paragraph 16(1A)(c).

The term “variable charge”, in relation to an electricity retailer, means the retailer’s charge for supplying electricity to a small customer in a distribution region that varies according to the customer’s usage of that electricity.

Item 8 – Paragraphs 6(2)(a), (b) and (c)

This item replaces paragraphs 6(2)(a), (b) and (c), which relate to what constitutes a small customer and the types of small customer.

New paragraphs 6(2)(a) and (b) provide that the consumer is a small customer if the consumer is any of the following types of small customer:

(a) a consumer (a residential customer) in relation to whom electricity is supplied principally for personal, household or domestic use;

(b) a consumer (a small business customer) in relation to whom both of the following apply:

(i) the electricity is not principally for personal, household or domestic use;

   (ii) the supply is, or will be, at a rate of less than 100 MWh a year.

The definition of small customer has been changed to more clearly distinguish between residential customers and small business customers, and remove the exclusion of small business customers on a flexible tariff. This change is relevant to the regulated tariff types the AER will determine a tariff cap for under subsection 16(1A). In particular, it will  allow for the SSO regulated tariff to be restricted to residential customers.

Item 9 – Paragraph 6(3)(a)

This item repeals paragraph 6(3)(a) of the Electricity Retail Regulations so that customers on a standing offer expressed as a demand tariff are considered a small customer under the Regulations.

Item 10 – Section 8A

This item repeals section 8A, which related to solar feed-in tariffs. Removing this section provides flexibility for the AER to consider how best to set the DMO and achieve the required objectives.

Item 11 – At the end of Division 1 of Part 2

This item adds new section 9A at the end of Division 1 of Part 2 of the Electricity Retail Regulations. New section 9A provides the objective of the industry code, which is: to provide small customers that are supplied with electricity at standing offer prices with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service.

The introduction of an objective is to provide clarity as to the scope and intended purpose and operation of the Electricity Retail Regulations and ensure that the matters taken into consideration give proper effect to that.

Subsection 9A(2) requires the AER, for the purposes of meeting the objective of the industry code, to have regard to guidelines determined under new section 18B. This will ensure that the AER’s regulatory decisions under the code are transparent and informed by the consultation requirements under the guidelines.

Item 12 - Subdivision A of Division 2 of Part 2 (heading)

This item replaces the heading for Subdivision A of Division 2 of Part 2 of the Electricity Retail Regulations with “Price caps on standing offer prices for non-regulated tariffs”. This amendment is consequential to maintaining the integrity of the “comparison price set by the AER”, which provides a means of comparing the value of an offer where an equivalent standing offer tariff price is not available. This will be used in the context of more complex offers such as demand tariffs.

Item 13 - Section 10 (heading)

This item changes the heading of section 10 of the Electricity Retail Regulations from “Caps on standing offer process” to “Price caps on standing offer prices for non-regulated tariffs”. This amendment is consequential to distinguish the relevant process and parameters that are required for the price caps that apply to non-regulated tariffs and for the purpose of a comparison price. This differs from the previous arrangement where a single price cap applied to all offers.

Item 14 – Subsection 10(1)

This item repeals and replaces subsection 10(1) (not including the note) to amend the scope of section 10 of the Electricity Retail Regulations so that it applies in relation to the supply of electricity under non-regulated tariffs.

The new subsection 10(1) provides that this section applies in relation to an electricity retailer’s standing offer prices on a day in a financial year for supplying electricity in a distribution region to a small customer of a particular type if:

1.    the electricity is supplied under a non-regulated tariff; and
2.    both the following are in force for the year in relation to the supply:

1.      a model annual usage; and
2.   a comparison price set by the AER.

Item 15 – Subsection 10(3)

This paragraph replaces the term “reference price” in subsection 10(3) of the Electricity Retail Regulations with “comparison price set by the AER”. This amendment is consequential to the change in terminology explained above in item 2, section 5.

Item 16 - After Subdivision A of Division 2 of Part 2

Subdivision AA

This item inserts new Subdivision AA, which establishes tariff caps for standing offer prices for regulated tariffs.

Subdivision AA introduces new section 10A, which applies in relation to an electricity retailer’s standing offer prices on a day in a financial year for supplying electricity in a distribution region to a small customer of a particular type where:

 (a) the electricity is supplied under a regulated tariff; and

 (b) a tariff cap is in force for the regulated tariff for the year for the supply.

A note to subsection 10A(1) refers the reader to section 8 for distribution regions to which the instrument does not apply in a financial year.

New subsection 10A(2) requires electricity retailers to ensure that the standing offer prices for the regulated tariff comply with the tariff cap on that day.

A civil penalty of 300 penalty units will apply for non-compliance. This penalty is intended to ensure compliance with subsection 10A(2) and reflects the potential harm to consumers from breaches of this subsection. It is consistent with other civil penalty provisions imposed by the code and remains below the maximum civil penalty permitted for industry codes under subsection 51AE(2) of the Act.

The Act also permits the ACCC to pursue other remedies against non-compliant electricity retailers. These include infringement notices (sections 51ACC–51ACJ), public warning notices (section 51ADA), and redress orders to compensate consumers for loss or damage suffered in relation to the contravening conduct (sections 51ADB and 51ADC). This could include court-ordered refunds to affected customers. Additional remedies include injunctions to prevent the non-compliant conduct (section 80), non-punitive orders such as community service orders (section 86C), and other compensatory orders (section 87). The ACCC can also accept administrative undertakings, under which a non-compliant retailer would agree to remedy the harm caused by its conduct, accept responsibility for its actions and establish or review its compliance programs.

Subsection 10A(3) clarifies what it means for standing offer prices for a regulated tariff to comply with the tariff cap, which is when the fixed and variable charges of the regulated tariff do not exceed the tariff cap for those components of the regulated tariff.

A note provides that a tariff cap is determined under subsection 16(1A) and determines a maximum amount of any fixed charge or variable charge or charges that an electricity retailer may charge a small customer for supplying electricity to the customer under a regulated tariff of a particular type.

Subsection 10A(4) requires electricity retailers to make a record of the tariff components of the regulated tariff and the applicable tariff cap for those components for six years from the end of the financial year. A civil penalty of 300 penalty units will apply for non-compliance. 300 penalty units is considered the appropriate level of deterrence to avoid the consumer harm that could otherwise arise through non-compliance. This penalty is consistent with other civil penalty provisions imposed by the code and below the maximum civil penalty permitted for industry codes (subsection 51AE(2) of the Act).

As explained in relation to the civil penalty for new subsection 10A(2), the Act also permits the ACCC to pursue other remedies against non-compliant electricity retailers.

Subdivision AD

This item inserts new Subdivision AD, which relates to SSO standing offers. Subdivision AD includes new section 11, which requires electricity retailers to make SSO standing offers available to residential customers with smart meters.

Subsection 11(1) provides that, subject to subsection (3), an electricity retailer supplying electricity in a distribution region to residential customers must make an SSO standing offer to residential customers in that region who have a smart meter connected to the premises to which electricity is to be supplied.

Subsection 11(2) provides that an electricity retailer must not place a residential customer on an SSO regulated tariff unless the customer has agreed to be placed on one. A note explains that an SSO standing offer cannot be used as a default standing offer. This is because the SSO regulated tariff may not be suitable for all customers—for example, customers who are unable to shift their electricity usage to different periods of the day may not benefit from being on the SSO regulated tariff. Customers should therefore be able to choose to be placed on the SSO regulated tariff and be protected from being placed on it without their agreement.

Subsection 11(3) provides that section 11 does not apply in relation to electricity that is to be supplied, or is supplied by an electricity retailer in a financial year if:

1.    for the 2026–2027 financial year, as at 1 March 2026, the electricity retailer supplied electricity to fewer than 1,000 residential customers across all distribution regions to which the code applies; and
2.    for the 2027–2028 financial year and each subsequent financial year, as at 1 March of the immediately preceding financial year, the electricity retailer supplied electricity to fewer than 1,000 residential customers across all distribution regions to which the code applies.

This exemption is intended to protect smaller retailers that may be disproportionately impacted by the requirement to offer the SSO regulated tariff.

Item 17 – Section 12 (heading)

This item amends the heading in section 12 of the Electricity Retail Regulations to replace “reference price” with “comparison price set by the AER”, consequential to the change in terminology explained above in item 2, section 5.

Item 18 – Paragraph 12(1)(b)

This item substitutes paragraph 12(1)(b) to replace the term “reference price” with “comparison price set by the AER”, again consequential to the change in terminology explained above in item 2, section 5.

Item 19 - Subsection 12(2)

This item omits the reference to “subsections (3)” in subsection 12(2) of the Electricity Retail Regulations and substitutes “subsections (2B), (3)”. This change has been made in order for non-compliance with subsection 12(2B) to be subject to a civil penalty under subsection 12(2).

Item 20 - After subsection 12(2A)

This item inserts new subsection 12(2B) after subsection 12(2A) of the Electricity Retail Regulations, which relates to communications about both non-regulated and regulated tariffs.

The provision sets out the matters the electricity retailer must communicate, which are:

1.    whether the offered prices apply in relation to a non-regulated tariff or a regulated tariff;
2.    if the offered prices apply in relation to a non-regulated tariff—the relevant comparison price set by the AER for that non-regulated tariff; and
3.    if the offered prices apply in relation to a regulated tariff—the relevant comparison price set by the AER for that regulated tariff.

As a consequence of the amendments made by item 19 described above, electricity retailers who do not comply with this new subsection 12(2B) will be subject to civil penalty under subsection 12(2).

Item 21 - Paragraph 12(3)(a)

This item substitutes “reference price”, wherever it occurs in paragraph 12(3)(a) of the Electricity Retail Regulations, with “comparison price set by the AER”, consequential to the change in terminology explained above in item 2, section 5.

Item 22 - Paragraph 12(3)(b)

This item substitutes “reference price”, in paragraph 12(3)(b) of the Electricity Retail Regulations, with “comparison price set by the AER”, again consequential to the change in terminology explained above in item 2, section 5.

Item 23 - Paragraph 12(3)(c)

This item repeals paragraph 12(3)(c) of the Electricity Retail Regulations, which included the term “lowest possible price”. This term has been removed as a consequence of the introduction of the new term “comparison price set by the AER”

The term “lowest possible price” contained nuances that were not always readily understood and removing it also offsets the increase of characters introduced by replacing “reference price” with “comparison price set by the AER” in advertising and billing materials.

Item 24 - Subsection 12(4) (definition of lowest possible price)

This item repeals the definition of lowest possible price, including the associated note. This change is consequential to the amendment described in item 23, as this term is no longer used in the Electricity Retail Regulations.

Item 25 - Subsection 12(7)

This item omits the words “(3) and (6) and 13(2) (whichever are applicable)” and substitutes “(2B), (3) and (6)” in subsection 12(7) of the Electricity Retail Regulations.

The removal of the reference to subsection 13(2) is consequential to the amendments made by item 26 described below, because section 13 is repealed and replaced with a new section 13 that does not contain a subsection 13(2). The reference to subsection 12(2B) is inserted because that new subsection is a mandatory communication requirement.

Item 26 – Section 13

This item repeals section 13 of the Electricity Retail Regulations and substitutes a new section 13 titled: “Communication about SSO regulated tariffs must include information that SSO regulated tariffs may not be suitable in all circumstances”.

The previous section 13 was consequential to paragraph 12(3)(c) and is no longer required due to the repeal of that provision.

The new section 13 provides that an electricity retailer must not make an SSO standing offer to a residential customer unless, before (or at the time) the offer is made, the retailer (or a person acting on behalf of the retailer) communicates the following information to the residential customer:

1.    that the offer is best suited to residential customers who are able to shift their electricity usage to the free usage period;
2.    that not shifting electricity usage to the free usage period could result in higher electricity costs; and
3.    that electricity supplied under an SSO regulated tariff during the free usage period may incur a variable charge for any electricity supplied during that period that exceeds the reasonable use cap for the free usage period.

The new section 13 ensures that customers received key information before entering into an SSO standing offer, including that the tariff is most suitable for customers who can shift load, and that their costs may increase if they cannot shift usage or if usage exceeds the reasonable use cap during the free usage period.

A civil penalty of 300 penalty units will apply for non-compliance. 300 penalty units is considered the appropriate level of deterrence to avoid the consumer harm that could otherwise arise through non-compliance. This penalty is consistent with other civil penalty provisions imposed by the code and below the maximum civil penalty permitted for industry codes under subsection 51AE(2) of the Act.

As explained in relation to the civil penalty for new subsection 10A(2) (item 16 above), the Act also permits the ACCC to pursue other remedies against non-compliant electricity retailers.

Item 27 – Subparagraph 13A(1)(b)(ii)

This item replaces subparagraph 13A(1)(b)(ii) of the Electricity Retail Regulations which effectively replaces the term “reference price” with “comparison price set by the AER”, consequential to the change in terminology explained above in item 2, section 5.

Item 28 – After subsection 13A(1)

This item inserts a new subsection 13A(1A) which provides that section 13A also applies where, during a financial year, an electricity retailer communicates to a residential customer the information required under new section 13 in relation to an SSO regulated tariff.

This amendment extends the scope of section 13A to incorporate the communication requirements set out in the new section 13 (see item 26 above). This is because the communication requirements in the new section 13 are subject to the record keeping requirements in section 13A, and will allow the ACCC to monitor compliance.

Item 29 – Subparagraph 13A(2)(a)(iii)

This item replaces subparagraph 13A(2)(a)(iii),  of the Electricity Retail Regulations to require an electricity retailer to make a record, for a communication mentioned in subsection 13A(1), of how it calculated or estimated the matters in paragraphs 12(3)(a) and (b) in relation to the offered prices.

Following the insertion of the new subsection 13A(1A) (see item 28 above), the revised subparagraph clarifies that it only applies to communications mentioned in subsection 13A(1).

The new subparagraph also removes references to paragraph 12(3)(c) (which has been repealed) and subsection 13(2) (which has been repealed and replaced).

Item 30 – Subsection 13A(2)

This item inserts new subsection 13A(2A) after subsection 13A(2), which requires that the record made by the electricity retailer must also indicate whether the content of the communication complied with subsections 12(2B), (3) and (6). The purpose of this requirement is to facilitate and support the ACCC’s compliance and enforcement activities in relation to the Electricity Retail Regulations, with particular reference to the communication requirements for retailers.

Item 31 – Subsection 13A(4)

This item replaces the words “of the offered prices” in subsection 13A(4) with “about the offered prices or the SSO regulated tariff”. This is a consequential amendment to item 28 above, which inserts the new subsection 13A(1A) and extends the scope of section 13A.

Item 32 – Before section 14A of Part 3

This item inserts the new heading ‘Division 1—Preliminary’ before section 14A of Part 3 of the Electricity Retail Regulations.

Item 33 – Section 15

This item omits “The AER” from section 15 (Functions of the AER) and substitutes with subsection “(1) The AER”. This change is consequential to the inclusion of  new subsection 15(2).

Item 34 - At the end of section 15

This item adds new subsection 15(2), which clarifies that the AER may determine the matters mentioned in new section 15A and subsections 16(1) and (1A) and18(1) and (4) in the same legislative instrument.

This enables the AER to determine regulated tariff types, model annual usage, comparison prices for both regulated and non‑regulated tariffs, and the applicable SSO free usage period and reasonable use tariff cap within a single legislative instrument for each DMO period. Including these matters in the same legislative instrument ensures they are set in the appropriate context and avoids additional administrative processes, reducing inefficiency and unnecessary regulatory costs.

Item 35 – After section 15

This item inserts new section 15A, titled “Determining types of regulated tariffs”. Section 15A provides that the AER may, by legislative instrument, determine a tariff type for the purposes of paragraph (g) of the definition of “regulated tariff” in section 5 (see item 7 above).

This conferral of regulatory functions is consistent with section 44AH of the Act, which allows the AER to have any functions prescribed by regulations made under the Act.

The AER has the expertise to determine how the DMO should be expressed to best achieve the objective and meet the needs of small customers. This new function gives the AER discretion to determine whether there is value in determining additional regulated tariff types and enables the AER to consider different market circumstances, the proportion of customers on different tariff types, and any changes to jurisdictional policies on standing offers in making these decisions.

A new heading—"Division 2—Determining model annual usage, comparison price set by the AER and tariff caps”—follows immediately after new section 15A.

Item 36 – Subsection 16(1)

This item repeals subsection 16(1) of the Electricity Retail Regulations and substitutes with a new subsection 16(1), headed: “Non-regulated tariffs—determining model annual usage and comparison price set by the AER”.

New subsection 16(1) provides that the AER must, by legislative instrument, determine matters for a financial year in relation to the supply of electricity under a nonregulated tariff in a distribution region to small customers of a particular type. These matters are:‑regulated tariff

1.    both of the following matters that the AER considers broadly representative, at the time of making the determination, of the supply of electricity in that region in the year to small customers of that type:
   1.      the per customer amount of electricity supplied
   2.   the timing or pattern of the supply;
2.    what the AER considers would be a reasonable per-customer annual price for supplying electricity under the non‑regulated tariff in that distribution region to small customers of that type.

This new subsection 16(1) enables the AER to determine both the model annual usage and the comparison price set by the AER in relation to non-regulated tariffs.

New subsection 16(1A), headed “Regulated tariffs—determining model annual usage, comparison price set by the AER and tariff caps”, provides that the AER must, by legislative instrument, determine the following matters for a financial year in relation to supplying electricity in a distribution region under a regulated tariff of a particular type to small customers of a particular type:

1.    both of the following matters that the AER considers to be broadly representative, at the time of making the determination, of the supply of electricity in that region in the year to small customers of that type under that regulated tariff type:
   1.                  the per customer amount of electricity supplied;‑ ;
   2.                the timing or pattern of the supply;
2.    what the AER considers would be a reasonable per-customer annual price for supplying electricity under that regulated tariff type in that distribution region to small customers of that type;
3.    subject to subsection (1B), the maximum amount (the tariff cap) of any fixed charge or variable charge or charges that an electricity retailer may charge small customers of that type in that distribution region in the year for supplying electricity under the regulated tariff of that type.

This new subsection 16(1B) provides that the AER must not determine a tariff cap (other than a reasonable use tariff cap under new paragraph 18(3)(b)) that applies to the free usage period for an SSO regulated tariff.

The new subsection 16(1A) provides for the AER to determine the model annual usage and the comparison price set by the AER in relation to a regulated tariff of a particular type, as well as determining a tariff cap for that tariff type.

Item 37 – Subsection 16(2)

This item repeals subsection 16(2) of the Electricity Retail Regulations to ensure DMO protections extend to all small customers supplied by authorised retailers.

Item 38 – Subsection 16(3)

This item omits the words “subsection (1) of this section” in subsection 16(3) of the Electricity Retail Regulations and substitutes “subsection (1) or (1A) of this section, in relation to the same type of non-regulated tariff or regulated tariff”. This amendment is consequential to the addition of subsection 16(1A) (explained in item 36 above).The introduction of regulated tariff and non-regulated tariff types means the AER may be required to make determinations that are different for the same small customer type, for each of the types of tariff.

Item 39 – Subsection 16(4) (heading)

This item repeals the heading for subsection 16(4) of the Electricity Retail Regulations and substitutes the heading “Matters relevant to determining annual prices and tariff caps”. This amendment is consequential to item 40 below.

Item 40 – Subsection 16(4)

This item omits “purposes of paragraph (1)(b)” in subsection 16(4) of the Electricity Retail Regulations and substitutes with “purposes of paragraphs (1)(b) and (1A)(b) and (c)”. This means the AER must have regard to the matters in subsection 16(4) in relation to determining the comparison price set by the AER for non-regulated tariffs and regulated tariffs.

Item 41 – Paragraphs 16(4)(a) and (b)

This item substitutes factors that the AER must consider when determining annual prices and tariff caps in paragraph 16(4)(a) and (b) of the Electricity Retail Regulations. The new factors are: (a) the efficient costs of supplying electricity in the region to small customers on standing offers; (b) the types of small customers on standing offers to whom electricity is supplied in the region; and (ba) the long-term interests of consumers.

The Regulations currently require that a retailer should be able to make a reasonable profit. Consistent with the review findings and recommendation the AER instead would be required to consider the efficient costs to supply small customers on standing offers, inclusive of retail margins when determining the standing offer price.

Item 42 – Subparagraph 16(4)(c)(iv)

This item omits the term “cost” in subparagraph 16(4)(c)(iv) in the Electricity Retail Regulations and substitutes with “modest cost”.

The Regulations required the AER to consider the reasonable costs associated with the costs of supply which resulted in the inclusion of costs associated with a ‘competition allowance’ and ‘reasonable customer acquisition and retention costs’. The Regulations will be amended to specify that the AER consider only a modest allowance for customer acquisition and retention costs in the DMO. The allowance for customer acquisition and retention costs reflect the costs incurred by retailers in supplying standing offer customers

The term ‘Modest costs’ is intended to mean those costs associated with ‘customer acquisition and retention costs’ incurred by retailers in supplying standing offer customers and would exclude, for example, costs associated with marketing purposes or innovation, as these are not costs associated with supplying standing offer customers.

Item 43 – Subparagraph 16(4)(c)(v)

This item repeals subparagraph 16(4)(c)(v) of the Electricity Retail Regulations. The requirement for the AER to have regard to the cost of serving small customers was repealed to allow only modest costs related to customer acquisition and retention to be included in the determination of retail costs.

Item 44 – After paragraph 16(4)(c)

This item inserts new paragraphs after paragraph 16(4)(c) of the Electricity Retail Regulations which provide that the AER must have regard to (ca) the objective set out in section 9A, and (cb) the guidelines determined under new section 18B when determining annual prices and tariff caps. This makes explicit that the AER should only consider the efficient costs to supply small customers when determining pricing of standing offers.

Item 45 – Subsections 17(4) and (5)

This item omits the term “to determining a model annual usage or a reference price (the new determination)” in subsections 17(4) and (5) of the Electricity Retail Regulations and substitutes with “to a determination (the new determination) of a model annual usage, a comparison price set by the AER or a tariff cap”. These amendments are consequential to changes outlined in Item 36 and reflect the language of the amendment to subsection 16(1).

Item 46 – At the end of Part 3

This item adds new Division 3, which is headed "Determinations in relation to SSO regulated tariffs” at the end of Part 3 of the Electricity Retail Regulations.

Section 18

Division 3 includes new section 18 which is headed “Free usage periods and reasonable use tariff caps for SSO regulated tariffs”.

New subsection 18(1) requires the AER to, by legislative instrument, determine a free usage period as part of the tariff structure of an SSO regulated tariff in a distribution region. Free usage period is defined in section 5 (inserted by item 2 above).

Subsection 18(2) requires the free usage period to be a period of 3 consecutive hours and apply for each day during which electricity is supplied under the tariff.

Subsection 18(3) provides that an electricity retailer (a) must not charge for electricity supplied to a residential customer in the free usage period on a day if the electricity used by the customer in that period on the day does not exceed 24 kilowatt hours (the “reasonable use cap” and (b) must not charge more than the maximum amount (the “reasonable use tariff cap”) determined under subsection 18(4) for any electricity (the “excess electricity”) used by the customer in that period on the day that exceeds the reasonable use cap.

This requirement is necessary to ensure the objectives of the SSO regulated tariff are met, through ensuring customers are not charged for electricity consumed during the free usage period, except where this consumption exceeds the reasonable use cap.

A civil penalty of 300 penalty units will apply for non-compliance with subsection (3).  This penalty is consistent with other civil penalty provisions imposed by the code and lower than the 600 maximum civil penalty permitted for industry codes under subsection 51AE(2) of the Act).

This penalty amount is necessary to ensure compliance with subsection (3) and reflects the potential harm to consumers from breaches of this subsection.

As explained in relation to the civil penalty for new subsection 10A(2) the Act also permits the ACCC to pursue other remedies against non-compliant electricity retailers.

Subsection 18(4) provides that for the purposes of paragraph 18(3)(b), the AER must, by

legislative instrument, determine a reasonable use tariff cap for the excess electricity.

The reasonable use tariff cap is a cap on the amount consumers will pay for electricity consumed that exceeds reasonable use cap during the free usage period. The reasonable use cap is a safeguard mechanism to maintain fair use, equity and sustainability. It mitigates the risk that households with batteries, EVs, or home automation disproportionately capture the benefits of this offer. The usage cap further reduces the likelihood of excessive demand concentration that could increase network and system costs. Having the AER determine the reasonable use tariff cap acts a safeguard for consumers as they will have some certainty and transparency in relation to the charge they will incur for usage in excess of the reasonable use cap.

Section 18A

Division 3 includes new section 18A, which provides for the matters to be considered in determining free usage periods.

Under this section, in determining a free usage period under section 18 for an SSO regulated tariff in a distribution region, the AER (a) must have regard to (i) the periods of high solar generation in the distribution region and (ii) the periods of low wholesale and network costs in the distribution region. The determination must also, as far as practicable, align the timing and length of a free usage period for the SSO regulated tariff with the periods mentioned in paragraph (a).

The AER may have regard to other relevant systems and market factors if it considers it relevant and appropriate to do so.

It is necessary for the AER to have regard to these issues for different distribution regions because of differences in local conditions which affect electricity usage and costs in each region. The requirement for the AER to have regard to the matters outlined is designed to ensure the SSO reflects local network conditions, to support system efficiency rather than creating new operational risks.

This item also adds new Division 4, which is titled “Determining guidelines” to Part 3 of the Electricity Retail Regulations.

Section 18B

New Division 4 includes new section 18B which requires the AER to, by written instrument, determine guidelines for the purposes of sections 16 and 18.

New subsection 18B(1) includes matters which the AER must set out in guidelines determined by a written instrument. These matters are:

1.    the approach and methodology the AER proposes to use to
   1.      identify the cost components for maximum annual bill amounts for non‑regulated tariffs; and
   2.   determine the cost components for maximum annual bill amounts, including the information and data the AER intends to use to determine those cost components;

1.    the approach and methodology the AER proposes to use to
   1.      identify the cost components for determining tariff caps for regulated tariffs; and
   2.   determine the cost components for such tariff caps, including the information and data the AER intends to use to determine those cost components;

1.    the approach and methodology the AER proposes to use to determine free usage periods for SSO regulated tariffs;

1.    any additional tariff types that the AER considers should be determined as a regulated tariff;

1.    the process that the AER proposes to undertake for the purposes of making a determination for the purposes of section 15A and subsections 16(1) and (1A) and 18 (1) and (4);

1.     any other matters that the AER considers relevant to achieving the objective in section 9A.

Requiring the AER to develop these guidelines will ensure that there is transparency for stakeholders on these key matters. Retailers continue to incur costs during the SSO period, and the matters outlined above are key to ensuring retailers are able to recover efficient costs.

Subsection 18B(2) requires the AER to publish the guidelines on its website as soon as practicable after making the guidelines and maintain a register of guidelines so published.

Subsection 18B(3) requires the AER to ensure that the first guidelines determined under subsection (1) are published on its website no later than 1 December 2026.

Section 18C

Division 4 includes new section 18C, which is headed “Requirements relating to determining guidelines”. New Section 18C provides for requirements the AER must undertake before determining guidelines under subsection 18B(1), or, subject to subsection 18D(2), amending guidelines under subsection 18D(1). The AER must:

1.    publish a draft of the guidelines or amendments, as appropriate, on the AER’s website;
2.    invite submissions about the draft guidelines or draft amendments, as appropriate, within a specified period (which must be at least 21 days after the draft is published); and
3.    consider any submissions received within that period.

These requirements will allow for robust consultation with stakeholders through a transparent process.

Section 18D

Division 4 also includes new section 18D. Subsection 18D(1) allows the AER to amend guidelines determined under subsection 18B(1) on its own initiative.

Subsection 18D(2) provides that in amending guidelines under subsection 18D(1), the AER is not required to comply with new section 18C if (a) the matters in the proposed amendment were included in a determination under section 16; and (b) the AER complied with section 17 before making that determination.

The AER undertakes a thorough consultation process before making a determination under section 16, which includes significant stakeholder engagement and detailed consideration of issues raised. In these circumstances it is not necessary to engage in additional (or double) stakeholder consultation on the same matters before amending the guidelines. Consultation will only be required on new matters that were not included in a determination under section 16.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Competition and Consumer (Industry Code—Electricity Retail) Amendment Regulations 2026 (Legislative Instrument) amends the Electricity Retail Code of Conduct set out in Part 2 of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019. The code is a mandatory industry code for the purposes of Part IVB of the Competition and Consumer Act 2010.

The Legislative Instrument modernises the Default Market Offer (DMO) framework, which was designed to limit the extent to which retailers could rely on high‑priced standing offers and to provide consumers with a clearer benchmark against which to compare market offers.

The Legislative Instrument achieve this by

• introducing a new objective provision, which provides that the objective of the Electricity Retail Regulations, being the industry code, is to provide small customers with a fair, trusted and reasonably priced electricity option that reflects the costs of supplying small customers with an essential service;
• introducing new matters that the AER must have regard to when determining the ‘comparison price set by the AER’, formerly known as the ‘reference price’;
• requiring the AER to develop and publish a guideline on its website setting out its intended approach and methodology for determining model annual usages, comparison price, and tariff caps;
• introducing new regulated tariffs and a new power for the AER to determine additional regulated tariff types;
• requiring electricity retailers to use the comparison price set by the AER as a comparison price for market offers; and
• introducing the new Solar Sharer Offer (SSO) and related provisions.

The Legislative instrument also introduces civil penalties for non-compliance by electricity retailers with the following requirements:

• ensuring standing offer prices for the regulated tariff comply with the tariff cap on that day (new subsection 10A(2)
• keeping records of tariff components of the regulated tariff and tariff cap (new subsection 10A(4)
• communication about SSO regulated tariffs (new section 13); and
• charging customers where a tariff cap applies or during the free usage period for the SSO (new section 18).

Human rights implications

The Legislative Instrument promotes the right to an adequate standard of living.

The electricity retailers that are subject to the Legislative Instrument are mainly expected to be bodies corporate, which do not have human rights. To the extent that it is possible that an individual may be captured by the Amendment Regulations, they engage the right to a fair trial and presumption of innocence.

Right to an adequate standard of living

The Amendment Regulations promote the right to an adequate standard of living, including food, water and housing under Article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The right to an adequate standard of living requires Australia to take appropriate steps to ensure the availability, adequacy and accessibility of food, clothing, water and housing for all people in Australia. Australia also has an obligation to take reasonable measures within its available resources to progressively secure broader enjoyment of this right.

The right to adequate housing is a component of the right to an adequate standard of living. Factors relevant to housing adequacy include access to essential facilities such as energy for cooking, heating and lighting.

The Amendment Regulations improve the standard of living in Australia by facilitating the regulation of electricity markets to enhance the welfare of Australians, including by reducing or mitigating the impact of rising energy prices.

Right to a fair trial and presumption of innocence

The Legislative Instrument may engage criminal process rights under Articles 14 and 15 of the ICCPR.

Civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the ICCPR regardless of the distinction between criminal and civil penalties in domestic law. When a provision imposes a civil penalty, an assessment is required to determine whether it amounts to a ‘criminal’ penalty for the purposes of Articles 14 and 15 of the ICCPR.

The civil penalty provisions contained in the Legislative Instrument are not ‘criminal’ for the purposes of human rights law. While a criminal penalty is deterrent or punitive, these civil penalties are regulatory and disciplinary, and are intended to encourage compliance with the Amendment Regulations. Further, the provisions do not apply to the general public but to a sector or class of people who should reasonably be aware of their obligations under the Amendment Regulations – electricity retailers. Therefore, imposing these civil penalties will enable an effective disciplinary response to non-compliance.

The judiciary retains discretion to consider the seriousness of a contravention and impose a penalty that is appropriate in the circumstances. Civil courts are experienced in making civil penalty orders at appropriate levels, taking into regard to the maximum penalty amount and considering a range of factors such as the nature of the contravening conduct and the size of the organisation involved.

The nature and severity of the potential civil penalties for breaches of the compliance requirements for charging customers where a tariff cap applies or during the free usage period for the SSO, and broader communication and record-keeping requirements are therefore not ‘criminal’ for the purposes of human rights law and so these provisions do not engage the criminal process rights under Articles 14 and 15 of the ICCPR.

Conclusion

The Legislative Instrument is compatible with human rights, as it does not raise any human rights issues. To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate, and the Regulations promote the right to an adequate standard of living.

The Hon. Chris Bowen MP

Minister for Climate Change and Energy

[1] https://www.dcceew.gov.au/sites/default/files/documents/code-review-outcomes.pdf; https://storage.googleapis.com/files-au-climate/climate-au/p/prj360cc9eff5b8e1d2255b7/page/DMO_Review_Outcomes_2025_Reforms_to_the_Default_Market_Offer_PDF_1.1MB_.pdf