The Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 amends the Competition and Consumer Act 2010 to legally separate the Australian Energy Regulator (AER) from the Australian Competition and Consumer Commission (ACCC), establishing the AER as an independent non-corporate Commonwealth entity with its own accountable authority and staffing under the Public Governance, Performance and Accountability Act 2013.
It gives the AER operational control over its governance, resources and personnel, while preserving its existing functions and enabling seamless transitional arrangements.
The Bill amends the Competition and Consumer Act 2010 (CCA) by:
Separating the AER from the ACCC and granting it independent status under the PGPA and Public Service Acts will enhance regulatory clarity, accountability and market confidence. When a regulator has its own governance and funding autonomy, it can act more swiftly and impartially, reducing delays in decision-making and lowering compliance uncertainty for energy businesses [Judgment].
Independent status will also strengthen public trust. By creating a distinct statutory agency with its own accountable authority, the AER’s decisions on pricing, network performance and consumer protections will be seen as free from conflicts of interest inherent in a dual-role ACCC/AER structure. Clear lines of accountability improve democratic oversight and allow Parliament to scrutinise the AER’s performance separately from the ACCC.
Finally, the streamlined staffing and resource arrangements—supported by transitional provisions that preserve existing delegations and enterprise agreements—ensure there is no interruption to the AER’s core functions. This is a low-risk, high-reward reform that aligns with long-standing expert recommendations to boost the effectiveness of energy market governance.
Even granting that structural separation has theoretical benefits, the reform risks creating unnecessary duplication of corporate, legal and administrative functions. Splitting two bodies that already cooperate closely can increase overheads and remove economies of scale in procurement, human resources and IT systems [Judgment].
Moreover, the Bill relies heavily on transitional provisions to preserve existing delegations and shared services; in practice, this may lead to protracted legal and staffing disputes as roles are reallocated. For a purportedly cost-neutral change, the complexity of regulations, instruments and enterprise agreement adjustments could incur hidden transaction costs.
Finally, there is limited empirical evidence showing that a stand-alone AER will materially outperform the current model. Information-sharing protocols between the ACCC and AER already operate effectively, and the governance reforms could be achieved through internal ACCC charter changes without amending primary legislation.
2025-07-23
Senate
Before Senate
Unspecified
Climate Change, Energy, the Environment and Water
Competition Policy, Energy Policy