The Australian Energy Regulator (AER) has launched a consultation on updates to the ring-fencing guidelines governing electricity transmission. 

The review follows recent amendments by the Australian Energy Market Commission (AEMC) to rule 6A.21.2 of the National Electricity Rules (NER), which empowers AER to revise the guidelines.

The revised guidelines aim to ensure ‘functional separation’ of prescribed and negotiated transmission services offered by Transmission Network Service Providers (TNSPs) from contestable electricity services provided by the same entity or related entities.

The AER’s issues paper seeks stakeholder feedback on the proposed changes. 

Among the key considerations, the paper explores whether negotiated transmission services should be fully, partially, or not at all ring-fenced. 

It also proposes expanding the definition of ‘ring-fenced information’, which would broaden what constitutes information that must be separated from contestable activities. 

In addition, the paper suggests that TNSPs could face new reporting requirements aimed at improving transparency in service delivery. 

The guideline updates could also extend the current rules on marketing staff separation to apply to negotiated services, ensuring these staff do not overlap with those working on contestable services. 

Finally, the proposal considers introducing restrictions on cross-branding and promotions, potentially limiting shared branding between regulated and contestable services.

The consultation aims to gather detailed insights into the potential costs, impacts, and challenges associated with these ring-fencing obligations. 

According to AER, stakeholder input will help determine which provisions should be retained, subject to waiver, or excluded entirely.

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