Flipping the Switch: the latest regulatory amendments to the Electricity Industry Act 2004 (WA)

What’s changed?

The AES Act introduces:

• A registration framework to regulate Alternative Electricity Services (AES) providers that is designed to adapt to new technologies, emerging business models and other arrangements.3
• Consumer protections for the activities of registration holders, delivered via an enforceable code of practice.⁴
• An enforcement regime administered by the Economic Regulation Authority.⁵
• Dispute resolution processes where AES providers are required to become members of the electricity ombudsman scheme.⁶

The DER Act introduces the:

• State Electricity Objective (SEO), which outlines mandatory considerations for decision-makers.⁷
• Electricity System and Market Rules (ESMR) which streamline various regulatory instruments into a unified set of rules.⁸

Given the complexity of the DER Act, particularly in its consolidation of the existing regulatory instruments into the ESMR, it will be implemented in a two-stage approach. This first stage focuses on the review and transfer of content to the ESMR, and the second stage will focus on repealing now redundant regulatory instruments.⁹ This transition will likely span multiple years.10

Alternative Electricity Services

The AES Act amendments introduce a flexible regulatory framework for the provision of alternative and emerging electricity services. The primary focus of the framework is to provide improved enforceable protections for customers who receive these services and who are not otherwise protected under the current licencing regime (e.g. many shopping centre tenants and apartment residents) under the Electricity Industry Act 2004 (WA).¹¹ Whilst intended to be a lighter handed approach than the current licencing regime, these protections will be provided via a registration and compliance model.

What will the AES amendments require from providers?

Western Australian businesses who provide ‘alternative electricity services’ may soon be required to register and comply with the new AES framework, which is currently being developed.¹²

Who could be an AES provider?

The definition of an ‘alternative electricity service’ is broad to include future services not yet considered by the Act.¹³ Since the Act’s definition of ‘alternative electricity service’ will expand, no services are expressly identified as an ‘alternative electricity service’ yet.¹⁴ The upcoming regulations regarding the AES framework will specify what activities constitute an ‘alternative electricity service’.¹⁵

However, the following business models may meet the definition of an AES provider:

• Embedded networks – where a private electricity network services multiple lots/tenancies within one property. This includes selling or supplying electricity to:¹⁶
  • Residential tenants in an apartment complex, retirement village or caravan park
  • Commercial tenants in shopping centres, office buildings, or industrial parks
  • Other tenants such as university/health campuses, airports or seaports
• On-site power supply arrangements – where a customer purchases and receives electricity from an energy system installed on their property (excluding self-supply models).¹⁷ Examples include businesses that:
  • Install their own solar system on a customer’s roof¹⁸
  • Install on-site electricity storage works, including battery storage systems¹⁹
• Businesses currently exempt from holding an electricity retail or distribution licence.²⁰ These can be businesses that do not supply electricity as a core part of their business, including:
  • Caravan park operators who on-sell electricity to long-stay residents.²¹

What would registration within the AES framework require from providers?

Since the regulations for the AES framework are not yet released, the exact requirements for AES providers are not yet available.²² However, these requirements may include:

Requirement to register

An AES provider must register within the AES registration framework.²³ An AES provider who fails to register may attract a fine.²⁴

Compliance

Once registered, an AES provider must comply with the terms and conditions applying to the registration.²⁵ Whilst the regulations will ultimately prescribe the substance of these requirements,²⁶ it is likely this will include an AES Code of Practice.²⁷The AES Code of Practice is not yet finalised but will be based upon the Voluntary Embedded Networks Code of Practice,²⁸ which includes considerations such as:

• Having a Supply Agreement with the customer
• Providing a Disclosure Statement with the customer
• Requirements to retain Billing Data
• Undercharging and overcharging notification requirements
• Financial hardship policies
• Family violence policies
• Disconnection and interruptions policies
• Dispute resolutions procedures

Enforcement

The Economic Regulation Authority is responsible for administering and enforcing this framework.²⁹ Should a dispute arise, customers may now access the electricity ombudsman to resolve disputes.³⁰

When would this be implemented?

As of April 2025, the AES regulatory framework is currently in development.³¹

Distributed Energy Resources

The DER Act amendments have three overarching objectives: (1) to ‘unify’ conflicting electricity objectives via the State Electricity Objective; (2) to streamline regulatory electricity frameworks; and (3) to support the integration of distributed energy systems into the Western Australian electricity sector.³²

State Electricity Objective (SEO)

The SEO unifies conflicting objectives across the Western Australian electricity regulatory framework, including the South-West Interconnected System and the Pilbara, and provides a consistent theme across the EIA.

Decision-makers (e.g. the Minister for Energy (Minister), the Economic Regulation Authority, the Coordinator and the Electricity Review Board) are now required to consider the long-term interests of electricity consumers in Western Australia when carrying out their functions under the Act.³³ Specifically, they must consider the ‘energy trilemma’ when carrying out their duties within the EIA, being the:

1. Quality, safety, security and reliability of supply of electricity
2. Price of electricity
3. Environment, including reducing greenhouse gas emissions³⁴

Importantly, given the inherent (and intentional) tension between these 3 limbs, the decision maker is permitted flexibility in how these limbs are weighted. This is intended to allow the specific circumstances of each decision to be considered within the broader context of the long-term interests of Western Australian electricity consumers.

The inclusion of an environmental limb aligns the Western Australian electricity framework with the National Electricity Law³⁵ which was amended in 2023 to include an emissions reduction objective.³⁶

Electricity system and market rules

The ESMR will consolidate existing regulatory instruments and provide a streamlined set of rules in two stages. These instruments will include the:³⁷

• Wholesale Electricity Market Rules
• Electricity Networks Access Code 2004 (Access Code)
• Electricity Industry (Metering) Code 2012 (Metering Code)
• Electricity Industry (Network Quality and Reliability of Supply) Code 2005

The ESMR will increase the scope of these instruments by providing heads of power that regulate the operation and management of distributed energy resources³⁸ – this includes technical standards and connection processes, and obligations for entities responsible for the integration of DER, including the Distribution Market Operator (AEMO), Distribution System Operator (Western Power), electricity data, DER aggregators and embedded network operators.³⁹ Examples of embedded network operators include shopping centres and apartment complexes that may use rooftop solar or battery storage if their electricity supply ceases.⁴⁰

Stages of consolidation

Stage 1 (Current)

Within this first stage of consolidation, content will be reviewed and transferred from relevant regulatory instruments to the ESMR.⁴¹

Stage 2 (December 2028)

The second stage will finalise the consolidation process by removing redundant references to subsidiary legislation that are now addressed in the new ESMR. This will come into operation no later than 31 December 2028 upon proclamation by the Minister.⁴²

Transitional provisions

To ensure an orderly transition to the ESMR over the two stages, the Act includes transitional provisions to review, amend, import and repeal the content of existing regulatory instruments.⁴³

The regulations have broad authority to address transitional matters,⁴⁴ and may allow relevant regulatory instruments to continue operating after revocation (i.e. whilst the transition process is completing).⁴⁵ Additionally, the Minister has interim powers to amend existing regulatory instruments (e.g. the Access Code or Metering Code)⁴⁶ and make orders on transitional issues.⁴⁷

These transitional powers are similar to existing powers to amend relevant instruments, except that the Minister will not be subject to the usual mandatory requirement for public consultation.⁴⁸ Nonetheless, these powers are transitional in nature only and the government has indicated that it intends to consult with stakeholders during the transition process.⁴⁹

For further queries on these recent amendments, please contact Troy McKelvie (Partner) or Yvonne Yap (Senior Associate) from the Perth Projects & Construction team.