To assist you with orientating yourself within the National Electricity Rules particularly the current rules, you can access summaries of the content in each chapter below:

Chapter 1: Introduction

This Chapter is introductory, including rules of interpretation and information on numbering of, and reference to, provisions, service of notices, and Australian Energy Market Operator Rule funds.

Chapter 2: Registered Participants and Registration

This Chapter establishes the various categories of Registered Participants and the registration requirements for each category (including eligibility criteria and unit classification requirements). It also contains provisions on the registration process, transfer of registration, ceasing to be a Registered Participant, and on how the Australian Energy Market Operator (AEMO) is to determine participant fees.

Chapter 2A: Regional Structure

This Chapter provides for the Australian Energy Market Commission (AEMC) to determine, and for the AEMO to publish, the regions of the National Electricity Market. In this Chapter:

  • Part A provides a framework for applicants to propose changes to the regions of the National Electricity Market to address congestion problems, and for the AEMC to make changes to these regions, including consider and consult on proposed changes and make determinations, and
  • Part B sets out procedures for the implementation or regional changes by AEMO.

Chapter 3: Market Rules

This Chapter contains the main body of rules that govern the operation of the National Electricity Market. It sets out provisions relating to the wholesale trading of electricity and the provision of ancillary services. The chapter includes:

  • AEMO’s responsibilities for the following matters: 
    • operation of the National Electricity Market (NEM), including the spot market and settlements
    • day-to-day operation of the power system including network losses and constraints, administering the medium and short term Projected Assessment of System Adequacy program relating to power system security and reliability of supply
    •  developing, maintaining and publishing Market Management System Access Procedures
    • the Reliability and Emergency Reserve Trader function, to maintain power system reliability and system security using reserve contracts
    • prudential requirements for participation in the market
    • determination of prices, including spot prices, prices for ancillary services, wholesale demand response dispatch bids and intervention pricing declared by  AEMO
    • acquisition of ancillary and transitional services that are essential to the management of power system security, facilitate orderly trading of electricity and ensure that electricity supplies are of acceptable quality
  • requirements for the provision of market and participant information by, and to,  AEMO, including information about existing and proposed generation projects, distributed energy resources, demand side participation, network congestion, available capacity of generators, adequacy of electricity supply, the operation of the spot market, requirements for ancillary services, settlements residue auctions, and an Electricity Statement of Opportunities
  • market intervention provisions, including: 
    • provisions on how and when AEMO is to apply an administered price cap for each region of the NEM to protect and sustain electricity trading during periods of sustained high prices
    • provisions on how and when AEMO is to declare the spot market to be suspended in a region, in extreme conditions, including 
    • provisions on who should pay and receive compensation in various circumstances, and how compensation should be calculated
  • wholesale demand response
  • the Participant Compensation Fund
  • settlement residue auctions, including auction eligibility and rules, and
  • regulated stand-alone power systems (SAPS).

The Schedule to this Chapter sets out requirements for providing bid and offer validation data to AEMO.

Chapter 4: Power System Security

This Chapter provides the framework for achieving and maintaining a secure power system, and specifies the conditions under which AEMO can intervene in the processes of the spot market and issue directions to Registered Participants in order to maintain or re-establish a secure and reliable power system.

This Chapter deals with:

  • concepts relevant to power system security, including the concepts of satisfactory, reliable and secure operating states, credible and non-credible contingency events, protected events, power system security, and the technical envelope
  • power system security responsibilities and obligations of AEMO, network service providers and market customers
  • AEMO’s cyber security functions
  • power system frequency control responsibilities and obligations of AEMO and generators, including in relation to enabling inertia network services and system strength services
  • control and maintenance of power system voltage
  • protection and assessment of power system equipment
  • cooperation between AEMO and network service providers in relation to power system stability
  • obligations relating to protection of the secure operation of the power system, including AEMO’s management of conditions or events that could impact the secure operation of the power system
  • responsibilities of AEMO, generators, scheduled network service providers and market participants for power system security related market operations
  • power system operating procedures for transmission and distribution networks
  • power system security support, including remote control and monitoring devices and operational control and communication facilities
  • use of nomenclature standards agreed or determined by AEMO
  • establishment of, and compliance with, performance standards, and
  • determination of performance standards experts.

Chapter 4A: Retailer Reliability Obligation

This Chapter creates a mechanism to assist in the maintenance of reliability in the National Electricity Market to ensure that the power system has sufficient generation, demand response, and network capacity to supply customers with the energy that they require. In this Chapter:

  • Part A is introductory and sets out key definitions for this Chapter
  • Part B sets out the requirements for AEMO in making a ‘reliability forecast’
  • Part C sets out the process for AEMO to request a reliability instrument and for the Australian Energy Regulator (AER) to decide whether to make the reliability instrument
  • Part D specifies exempt market connection points and which entities are liable under the Retailer Reliability Obligation, including how non-liable entities can ‘opt in’ to manage their obligation directly and how entities that enter the market after the contract position day are treated
  • Part E covers how liable entities can use qualifying contracts to comply with the Retailer Reliability Obligation
  • Part F deals with compliance with the Retailer Reliability Obligation
  • Part G places a market liquidity obligation on generators, which operates between the making of a T-3 reliability instrument and the making of a T-1 reliability instrument by the AER, and
  • Part H details a separate voluntary book build mechanism run by AEMO to help liable entities secure contracts with new resources after a T-3 reliability instrument has been made.

Chapter 4B: Orderly Exit Management

This chapter applies when an orderly exit management (OEM) generator seeks to bring forward the closure of an OEM generating unit. In this Chapter:

  • Part A is introductory
  • Part B specifies the type of information an OEM generator must provide to theAER to propose an early closure
  • Part C addresses the steps that the Minister must take to assess the impact of the early closure on reliability and system security, and the potential costs and/or benefits to consumers
  • Part D covers voluntary agreement negotiations, entered into to facilitate the ongoing operation of the OEM generating unit beyond the proposed closure date
  • Part E deals with the mandatory operation direction (MOD); which is to be issued when a voluntary agreement cannot be reached
  • Part F outlines the different categories of payments a MOD generator is entitled to receive, the information included in a payment application and the approach taken by the AER in determining payment amounts
  • Part G sets out the process for the MOD generator to apply to the AER for determination of the amounts payable on      termination of the mandatory operation direction
  • Part H provides a process by which the MOD generator must submit an annual performance report to the AER during the mandatory operation period
  • Part I deals with financial matters and cost recovery by the financial vehicle
  • Part J allows the AER or AEMO to impose requirements on the provision of information, as it relates to Chapter 4B, and
  • Part K permits the AER to make and publish guidelines on how it will undertake its functions under this Chapter.

Chapter 5: Network Connection Access, Planning and Expansion

This Chapter regulates the connection to, and the planning and expansion of, the power system. In this Chapter:

  • Part A is introductory
  • Part B provides a framework for establishing and modifying connection and access to a transmission network or a distribution network and to the national grid (however, connection of retail customers, including micro resource operators, is covered in chapter 5A). This includes obligations on parties to comply with performance and system standards and technical requirements and dispute resolution processes.
  • Part C addresses the network related issues following the negotiation of a connection agreement under Part B, namely the design of connected equipment, inspection and testing, commissioning and disconnection and reconnection, and
  • Part D deals with the planning and expansion of networks and the national grid. This includes application of the regulatory investment test for transmission and distribution, integrated system plan, and renewable energy zones.

Schedules to this Chapter provide more detailed technical information, including on:

  • system standards that are necessary or desirable for the safe and reliable operation of facilities and equipment
  • network performance requirements to be provided by, or coordinated between, network service providers
  • conditions for the connection of generators, network users and market network services
  • information and technical data requirements for primary transmission network service providers related to enquiries and applications for connections or modifications of existing connections; preliminary and detailed responses; annual forecasting and planning; demand side engagement
  • terms and conditions of connection agreements and network operating agreements,
  • negotiation principles for negotiated transmission services and large dedicated connection assets, and
  • SAPS performance requirements as defined by the Distribution Network Service Provider.

Chapter 5A: Electricity Connection for Retail Customers

This Chapter regulates the provision of electricity connection services by distributors to retail customers (including those with small distribution connected units such as rooftop solar panels). In this Chapter:

  • Part A is introductory
  • Part B deals with model standing offers (requiring approval by the AER) to provide basic and standard connection services
  • Part C sets out a regulated framework for the negotiation of connection contracts that are not standing offers
  • Part D deals with applications for connection services
  • Part E deals with connection charges
  • Part F deals with the formation and performance of connection contracts
  • Part G deals with the resolution of disputes between retail customers and distributors, and
  • the Schedule sets out minimum content requirements for connection contracts.

Chapter 6: Economic Regulation of Distribution Services

This Chapter deals with the classification and economic regulation of distribution services. In this Chapter:

  • Part A is introductory
  • Part B confers power on the AER to classify distribution services, to determine the forms of control for distribution services, and to make distribution determinations
  • Part C sets out the building block approach to the regulation of services classified as standard control services
  • Part D regulates the prices that may be charged by distribution network service providers (DNSPs) for the provision of services classified as negotiated distribution services
  • Part DA deals with the preparation of, requirements for and approval of, connection policies
  • Part E sets out the procedure and approach for the making of a distribution determination
  • Part F regulates cost allocation
  • Part G contains the distribution consultation procedures
  • Part H deals with ring-fencing
  • Part I deals with tariff classes and tariffs
  • Part J deals with billing and settlements
  • Part K deals with prudential requirements, prepayments and capital contributions
  • Part L deals with dispute resolution
  • Part M deals with the disclosure of transmission and distribution charges
  • Part N provides for services provided by, or in connection with, dual function assets to be the subject of distribution determinations
  • Part O sets out the requirements to prepare annual benchmarking reports, and
  • Part P requires the AER to publish the Distribution Reliability Measures Guidelines and review them every 5 years

The schedules of this chapter set out what information and matters a building block proposal should contain and method of  establishing the value of a regulatory asset base.

Chapter 6A: Economic Regulation of Transmission Services

This Chapter deals with the classification and economic regulation of transmission services. In this Chapter:

  • Part A is introductory
  • Part B states the general obligation of the AER to make transmission determinations for transmission network service providers (TNSPs) in respect of prescribed transmission services, and to make related guidelines
  • Part C regulates the revenues that may be earned by TNSPs that are the subject of transmission determinations
  • Part D refers to the rules and processes for Intending TNSPs
  • Part E sets out the procedure and approach for the making of a transmission determination by the AER
  • Part F has been deleted
  • Part G contains provisions regarding cost allocation
  • Part H sets out the transmission consultation procedures
  • Part I contains provisions regarding Transmission Ring Fencing Guidelines
  • Part J regulates the prices that TNSPs may charge for prescribed transmission services and establishes principles to be applied by TNSPs in setting prices that allow TNSPs to earn the whole of the aggregate annual revenue requirement, accounting for system strength services
  • Part K has been deleted, and
  • Part L requires the AER to prepare annual benchmarking reports.

The schedules of this chapter provide details on the contents of revenue proposals, regulatory asset bases, cost reflective network pricing , and the application of economic regulation of transmission services to AEMO and declared transmission system operators. 

Chapter 6B: Retail Markets

This Chapter deals with retail support obligations between distributors and retailers in respect of shared retail customers. In this Chapter:

  • Part A deals with the retail support obligations of DNSPs, Small Resource Aggregators and retailers. This includes billing and payment, including incidental matters like adjustment of, and changes to, network charges, tariff reassignments, disputes and interest.
  • Part B establishes a credit support regime in respect of outstanding service charges, with a prescribed form of unconditional undertaking for credit support included in the Schedule.

Chapter 7: Metering

This Chapter deals with metering requirements. Market participants are obliged to establish, and register with AEMO, metering installations in respect of electricity connection points that measure electricity use. This Chapter provides a detailed regime for the administration of metering installations and the disclosure and use of metering data. In this Chapter:

  • Part A is introductory
  • Part B sets out the roles and responsibilities of financially responsible market participants, metering coordinators, AEMO and Embedded Network Managers
  • Part C deals with the appointment of a metering coordinator and metering coordinator default arrangements
  • Part D sets out metering installation requirements as well as requirements for ongoing inspection, testing and auditing
  • Part E deals with metering data services and the metering database, metering register requirements, disclosure of NMI information and metering data provision to retail customers
  • Part F deals with security of, and rights to access, metering installations, services provided by metering installations, energy data held in metering installations and metering data from metering installations
  • Part G deals with procedures to be established, maintained and published by AEMO including the metrology procedures and service level procedures, and
  • Part H sets out the business-to-business (B2B) framework, which provides for a standard form of communications between businesses for certain services related to small customer meters.

Schedules to this Chapter deal with:

  • metering register information
  • accreditation, registration and capabilities of a metering provider, metering data provider and embedded network manager
  • types of metering installations and accuracy requirements
  • general design requirements
  • metering installation minimum services specification requirements, and
  • metering installation inspection and testing requirements.

Chapter 8: Administrative Functions

This Chapter describes some of the key processes and obligations associated with the administration of the Rules and deals also with augmentations of declared transmission systems. In this Chapter:

  • Part A is introductory
  • Part B outlines the dispute resolution regime principles and procedures ,including its application to B2B determination disputes 
  • Part C deals with the obligations of registered participants to maintain confidentiality
  • Part CA declares that AEMO and Registered Participants are not prevented from disclosing CDR data (as defined in the Competition and Consumer Act 2010 (Cth))
  • Part D deals with monitoring and reporting, principally by the AER
  • Part E deals with the structure and responsibilities of the Reliability Panel
  • Part F sets out the Rules consultation procedures
  • Part G deals with funding for the Consumer Advocacy Panel
  • Part H deals with augmentations to the declared transmission system of an adoptive jurisdiction, with principles to be reflected in agreements relating to contestable augmentations set out in the Schedule
  • Part I deals with the AER’s responsibilities for developing, maintaining and publishing a methodology for calculating values of customer reliability
  • Part J deals with the AER developing and publishing the customer export curtailment methodology and values, and
  • Part K makes provisions for trial waivers, trial rules and trial projects.

Chapter 8A: Participant Derogations

This Chapter contains the derogations that have been granted to particular participants.

Chapter 9: Jurisdictional Derogations and Transitional Arrangements

This Chapter contains the jurisdictional derogations that apply to each participating jurisdiction. This Chapter prevails over all other Chapters of the Rules.

Chapter 10: Glossary

This Chapter contains the definitions of terms used throughout the Rules.

Chapter 11: Savings and Transitional Rules

This Chapter sets out:

  • savings provisions which operate to preserve, in whole or in part, an existing Rule that would otherwise cease to have effect because of a new Rule or amendments to an existing Rule
  • transitional provisions which regulate the operation or coming into effect of a new Rule or amendments to an existing rule, for a finite period, and
  • application provisions which provide exactly how a new Rule will apply and how an old Rule will cease to apply.

The provisions in this Chapter are in chronological order, by the date on which the relevant amending rule was made.