Reporting and compliance
National Electricity Market
The National Electricity Market (NEM) is an open access wholesale electricity
market encompassing the Eastern States (including South Australia), which
commenced in December 1998. The NEM arrangements originated in commitments by
the Council of Australian Governments in the early 1990s, culminating in the NEM
Legislation Agreement of May 1996 between the participating jurisdictions.
Subsequently, the National Electricity (South Australia) Act 1996 was
enacted by the South Australian Parliament to give effect to the Agreement.
That Act contains the National Electricity Law which establishes the
NEM, comprising the wholesale electricity exchange that is operated and
administered by the Australian Energy Market Operator (further details about NEM
operations are available on the AEMO website, as well as the
national electricity system, that is, the interconnected electricity
transmission and distribution system, together with connected generating
systems, facilities and loads.
The detailed standards that govern participation in, and the operation of,
the NEM are set out in the National Electricity Rules. The initial rules were
made by the South Australian Minister for Energy in June 2005 under section
90(1) of the National Electricity Law.
Two additional regulatory bodies have responsibilities under the NEM
- The Australian Energy Market Commission is the body responsible
for making and amending the National Electricity Rules and for market
development and market review at the national level, and for providing strategic
and operational advice to the Ministerial Council on Energy.
- The Australian Energy Regulator
performs economic regulation of the wholesale electricity market and
electricity networks in the NEM, and responsibility for consumer protection and
performance monitoring of retail energy markets in those jurisdictions which
have adopted the National Energy Customer Framework (NECF). It is also
responsible for the enforcement of the National Electricity Law and the National
From 1 February 2013, the principal regulation of South Australia's retail
energy market transferred to the Australian Energy Regulator (AER). The AER is
now responsible for consumer protection and performance monitoring in the
electricity and gas retail market.
ESCOSA licenses electricity distributors and transmission network operators
pursuant to the Electricity Act 1996.
The functions of the Commission arising under the Essential Services Commission Act include monitoring
and reporting on matters such as:
- outcomes for South Australian consumers in terms of quality and reliability
of electricity services (distribution, transmission, generation and off-grid);
- regulated businesses' compliance with their regulatory obligations.
The Commission fulfils these roles in a number of ways, including through the
publication of periodic and special reports, such as Annual Performance Reports
and reports into specific compliance matters. The Commission considers that the
provision of such information is fundamentally important for consumers and
assists in understanding the nature and levels of service which have been
provided to them within the regulated market, as well as the reasons for any
changes in performance over time. This information is also important for
regulated entities, as it assist them to understand the areas of key interest
for the Commission and, in some instances, their customers.