The Council of Australian Governments (COAG) has agreed to implement the Prime Minister's electricity market reform package, which will save households an estimated $250 in power bills per year.


Prime Minister Julia Gillard welcomed the announcement, saying that the planned reforms are the most comprehensive suite of electricity market reforms seen by the country in over a decade.


The Federal Government has worked with State and Territory governments through the Standing Council on Energy and Resources (SCER) and with business through the Business Advisory Forum (BAF) to agree on reforms that will limit future electricity price rises.


Key features of the reform package include:


Rule changes to ensure no over-investment in networks:


  • Commitment in-principle to a new national framework of best-practice reliability standards which give added weight to the interests of consumers and in-principle agreement to transfer reliability setting to the Australian Energy Regulator;
  • Early implementation of new rules that will ensure investment by network businesses is more efficient; and
  • A public consultation process to improve the Limited Merits Review Regime to minimise the risk of ‘cherry-picking’ by network businesses while also ensuring review arrangements provide an effective back-stop for business.


Giving consumers a voice in the electricity market:


  • Establish a Consumer Challenge Panel, comprised of industry experts, to represent consumers’ interests in regulatory determinations;
  • Implement national consumer protections (including for smart meters) by 1 January 2014; and
  • Develop a national consumer advocacy body, in close consultation with stakeholders, to provide a national consumer voice for energy policy and regulatory development.


A strengthened independent regulator:


  • An additional $23 million in federal funding over four years for the Australian Energy Regulator to support additional expert resources, clearer and more transparent reporting, and greater consumer engagement. The strengthened Regulator will remain in its current structure as part of the ACCC.


More choice for consumers:


  • A commitment by jurisdictions to report back to COAG next year on pathways towards more flexible electricity prices, where effective competition exists, to allow retailers to offer consumers a better deal; and
  • A commitment to make it easier for retailers to offer innovative products to give consumers the choice to have such things as smart metering, in-home displays, and time-of-use-pricing so they may better manage their energy use and reduce costs.


Actions to reduce electricity peaks:


  • Agreement to provide for greater demand-side participation to make it easier for consumers to reduce demand, particularly at peak periods, to minimise the need for new investment in energy infrastructure – drawing on the AEMC’s Power of Choice review.



COAG will require Energy Ministers to report regularly on progress in 2013.


Further information on the reform package is available at