About the framework
The National Energy Customer Framework (NECF) is a major component of the national energy market reform program as agreed by the Council of Australian Governments (COAG) under the Australian Energy Market Agreement (AEMA).
The legislation to give effect to the National Energy Customer Framework was passed by the South Australian Parliament and received the Royal Assent in March 2011.
The NECF commenced in the Australian Capital Territory and Tasmania on 1 July 2012. New South Wales, Victoria and South Australia will commence the NECF as soon as is practicable. Queensland is yet to consider its application of the NECF.
The NECF streamlines the regulation of energy—electricity and natural gas—distribution and retail regulation functions in a national framework, and develops an efficient national retail energy market including appropriate customer protection.
The NECF covers a range of subject matters, including:
- the governance model, including a contractual model that forms the basis of the framework
- supply of energy to retail customers including a regulatory obligation to offer supply to small customers
- provision of customer distribution services to customers
- arrangements between distributors and retailers in provision of energy services to customers
- enhancements to the enforcement and compliance regime.
How is RET involved?
Officials from the Department of Resources, Energy and Tourism (RET) represent the Australian Government on the Standing Council on Energy and Resources (SCER) National Energy Customer Framework Joint Implementation Group.
The working group was tasked by the MCE to implement reform under Clause 14 of the AEMA in relation to the non-economic regulation of energy distributors and for regulation (excluding price regulation) of energy retailers. This reform encompasses the transfer of current state and territory responsibilities to the National Electricity Law, National Gas Law and the National Energy Retail Law.
Retail energy pricing
While Clause 14 of the Australian Energy Market Agreement denotes agreement to transfer most regulatory functions to the NECF, the Agreement provides that retail energy price regulation remains the responsibility of states and territories.
States and territories have agreed to phase out the exercise of retail price regulation for electricity and natural gas where effective retail competition can be demonstrated. To assist states and territories in this regard, the Australian Energy Market Commission (AEMC) is undertaking reviews of jurisdictions with Full Retail Contestability (FRC) and advising, where effective competition exists, how that jurisdiction can phase out their retail price regulation.
The AEMC completed its review in Victoria in 2007 (with Victoria deregulating prices in January 2009), South Australia in 2008 and the Australian Capital Territory in 2011. The SCER tasked the AEMC to undertake a review of New South Wales at its 8 June 2012 meeting.
For more information about the matters on this page, email firstname.lastname@example.org.
For more information on the work of the Retail Policy Working Group visit the Standing Council on Energy and Resources website.