Parliament has passed the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 (Bill), marking a transformative moment for Australia’s energy regulation framework.[1]
Commencing on 1 July 2026, the Bill legally separates the Australian Energy Regulator (AER) from the Australian Competition and Consumer Commission (ACCC) and establishes the AER as a standalone non-corporate Commonwealth entity. This delivers on long-standing recommendations from the Vertigan Review (2015) and the Finkel Review (2017) calling for enhanced independence and autonomy for the energy regulator.[2]
Why the reform was needed
When created in 2005, AER operated within ACCC governance arrangements, with the ACCC Chairperson acting as the AER’s accountable authority.[3] That framework suited an earlier energy market, but the AER’s remit has since expanded significantly alongside the rapid transformation of the sector. Its functions, powers and workforce have grown, creating a clear need for a governance model that reflects its contemporary role.[4]
The Vertigan Review emphasised that AER would be more independent and effective if it had full management and financial autonomy, ideally as a standalone regulator.[5] The new legislation delivers on this by giving the AER direct control over its staff, budget and strategic direction.
What the Bill delivers
The Bill establishes the AER as a non-corporate Commonwealth entity with the AER Board as its own accountable authority under the Public Governance, Performance and Accountability Act 2013 (Cth).[6] Key changes include making the AER Chair the head of agency under the Public Service Act 1999 (Cth), enabling AER to engage its own staff and consultants, facilitating the transfer of existing staff (with the ACCC Enterprise Agreement 2024-2027 continuing to apply), and allowing the ACCC to provide shared services where beneficial.[7] Importantly, the separation comes at nil net cost to government, with the ACCC and AER continuing to partner in areas of mutual benefit.[8]
Agreed to by the Energy and Climate Change Ministerial Council on 19 May 2023, this structural reform positions AER to more effectively oversee Australia’s evolving energy markets, manage the energy transition, and deliver better outcomes for Australian consumers on the path to net zero emissions by 2050.[9]
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
[1] Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 (Cth) (‘The Bill’).
[2] Explanatory Memorandum, Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 (Cth) (‘Explanatory Memorandum’) 1.
[3] Ibid 2.
[4] Ibid.
[5] Ibid 1.
[6] Ibid 2.
[7] The Bill (n 1) ss 44AAC, 44AACB.
[8] Explanatory Memorandum (n 2) 3.
[9] Ibid.
