The Energy Regulation and Markets Review - Stikeman Elliott

Chapter 1
Australia
Mitzi Gilligan, Eliza Bartlett, Carolyn Vigar, Darshini Nanthakumar,
Rudi Kruse, Genevieve Watt and Nicholas Liau 1
I
OVERVIEW
In order to understand the regulation of energy industries and the energy markets in
Australia, it is important to first understand the political and regulatory system in which
they operate.
Australia is a federation of six states. Legal and political power is divided between
the federal government and the state governments in accordance with the Federal
Constitution.
The Federal Constitution confers power on the federal parliament to legislate
for specific matters, including taxation, foreign investment, the banking and monetary
system, and interstate and overseas trade. The states retain the power to legislate for all
other matters.
The six states forming the federation are Queensland, New South Wales (‘NSW’),
Victoria, Tasmania, South Australia and Western Australia. The federal government
created the Australian Capital Territory (‘ACT’) and the Northern Territory as politically
autonomous legislatures under its legal control.
Each Australian state and territory has the power to make laws with respect to its
electricity and gas industries. Consequently, the regulation of each state and territory’s
electricity and gas industries originally developed separately.
Significant reform has occurred in Australian energy markets in recent years.
The states of Queensland, NSW, Victoria, Tasmania and South Australia and the ACT
have combined to form a single interconnected National Electricity Market (‘NEM’),
which operates under a largely consistent legal and regulatory framework within the
participating jurisdictions. The NEM is a wholesale market for the supply and purchase
1 Mitzi Gilligan is a partner, Eliza Bartlett is a senior associate, Carolyn Vigar is a special counsel,
Darshini Nanthakumar, Rudi Kruse, Genevieve Watt are lawyers and Nicholas Liau is a
graduate at Minter Ellison.
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