Becoming an Authorised Retailer - Regulatory Explainer

This article is relevant to energy retail within states that an adopted the National Energy Consumer Framework (NECF)¹ and Victoria. For information regarding other Australian markets, visit the Western Australia Economic Regulation Authority or Utilities Commission of the Northern Territory. 

What authorisation is required to become a retailer?

To establish that a retailer has the capacity and resources to enter the energy retail market and comply with relevant energy laws, they must obtain a retailer authorisation from the Australian Energy Regulator (AER), or for retailing in Victoria, an energy retail licence from the Essential Services Commission (ESC). 

If you are interested in the Victorian licensing requirements, see the section ‘Victorian energy retail licences’ below: 

Authorisations are normally required where: 

Not all of the above criteria need to be met in order for an authorisation to be required. In almost all cases though, where energy is intended to be transferred from one party to another party, the transferring party will require either an authorisation, or a valid exemption.

You may need to seek legal advice to determine whether your business requires an authorisation. The Energy Innovation Toolkit can only provide general, not specific, guidance on the regulatory framework, and is not a suitable substitute for personalised legal advice. 

Exemptions from requiring an authorisation

There are some situations where an authorisation may not be necessary or appropriate. In this case, a person selling energy may be able to obtain an exemption from the requirement to have an authorisation. Entities and people who are subject to an exemption are called “exempt sellers” and are subject to different sets of conditions than authorised retailers. 

You may be eligible for an exemption if you are planning on selling energy:

Examples of a potentially exempt seller include:

Exemptions were developed to manage the practice of ‘on-selling’ energy. On-selling (or reselling) is when a person or business purchases energy from another person or business—usually an authorised energy retailer—and then sells it to a customer through an embedded network , such as a shopping centre, apartment building, retirement village or caravan park. The main relationship the on-seller has with their customer is not the sale of energy. This is a standard situation where an exemption may apply. 

Exemptions are situation-specific and a great variety of both registrable, deemed and individual exemptions are available depending on the specifics of the proposed transferring of energy. These exemptions each still impose obligations and conditions on the seller, with these conditions varying between each class of exemption. 

Common conditions imposed on exempt sellers include requirements to: 

A full list of conditions relevant to exempt sellers can be found in Appendix A-3 of the Retail Exempt Selling Guideline. 

If you think your business may be exempt from requiring a retailer authorisation, the AER provides information regarding retail exemptions for energy sales within the National Electricity Market , but not in Victoria. 

Requirements for an authorisation

A business not eligible for an exemption that is intending to sell or transfer energy will require a retailer authorisation from the AER for states that have adopted the NECF.

To obtain a retail authorisation , you must demonstrate your organisation meets the following 3 entry criteria:

An applicant must meet all 3 entry criteria to be granted an authorisation.  

What does the authorisation process look like? 

An applicant must develop a retail authorisation application, which provides details of an applicant’s ability to meet all criteria set out in the AER’s Retailer authorisation application checklist. Any additional documentation must be provided as appendices. 

Once an application has been submitted, the AER will likely request further details to clarify information provided to ensure the application meets each of the criteria. The AER may also meet with an applicant to gain a greater understanding of the business model and other specific questions. Once an application is considered complete, it will be submitted for public consultation.

How long does the process take?  

The duration of the process will differ depending on: 

Once the AER is satisfied the application is complete, a public application will be posted on the AER’s website and invite interested third parties to make submissions. Public consultation is held for 20 business days.Applicants will have the opportunity to respond to, and clarify, any issues raised in submissions. 

Can I retail electricity and gas under the same authorisation

An authorisation can be sought for electricity, gas or both. The processes for applying for an electricity and gas retail authorisation are similar, excluding fuel-specific processes, such as wholesale procurement or distribution. 

If you intend to retail in multiple states, you may need both an authorisation and a licence. The Energy Innovation Toolkit’s Regulatory Navigator can help you understand what you will need prior to market entry.

Are there any costs? 

The AER does not charge an application fee for an authorisation application.

However, retailer authorisation is a highly involved and complex process. Applicants must provide audited financial documents, and compliance and risk management policies and procedures. These costs should be factored in as part of a proponent’s assessment of options. 

Are there other entities a retailer must register with prior to becoming a retailer? 

A proponent wishing to seek retailer authorisation should engage formally with the following organisations:

• AEMO: If the proponent intends to purchase electricity or gas from AEMO wholesale markets, it must register as an AEMO participant. Participants must register for AEMO electricity markets and gas markets separately. Applicants intending to only on-sell electricity from another authorised retailer may not be required to register. 

• Energy ombudsmen: Applicants proposing to retail to residential and small business customers must provide evidence of arrangements to register with each relevant energy ombudsman. Applicants only intending to retail to large business customers are not required to provide evidence of arrangements. 

• Distribution Network Service Providers: Applicants must provide evidence of any agreements / arrangements in place with electricity or gas distribution business within all jurisdictions in which they intend to operate. Where arrangements have not been finalised, they must provide details of any steps that have occurred to date and when they expect agreements to be completed.

Victorian energy retail licences 

In deciding an application, the ESC has regard to its objectives under the Essential Services Commission Act 2001, the Electricity Industry Act 2000 and/or the Gas Industry Act 2001. 

Applications are assessed on a case-by-case basis, and the ESC may request additional information.

Application process and timeframes

Fees 

Consultation

Applying

Other registrations and engagements

The licence application form sets out other registrations and engagements required as part of the application (e.g. Applicants applying for a retail licences must become a member of an approved dispute resolution body; the Energy and Water Ombudsman (Victoria) (EWOV). Applicants will need to provide supporting documents to demonstrate they are a member of EWOV or have approached EWOV about joining the scheme.).

Electricity and gas licensing exemptions

In Victoria, there are two types of electricity retailer exemptions:

• Deemed exemptions: These exemptions apply automatically – they do not need to be registered with the ESC for a licence exemption. However, they still need to comply with the General Exemption Order 2022 and a range of regulatory obligations in the Energy Retail Code of Practice and other instruments. 
• Registration exemptions: These exemptions must be registered through the ESC’s self-service portal.

The General Exemption Order 2022 applies to electricity sold or supplied by an exempt person. The Gas Embedded Network General Exemption Order 2025 applies to exempt persons who provide services by means of a distribution pipeline within an embedded network. A person who sells gas to retail customers must hold a retail licence issued by the ESC.

The ESC’s website outlines obligations as an exempt person under the General Exemption Order 2022 and Gas Embedded Network General Exemption Order 2025. 

Notes

Applications for gas retail licences in Tasmania are overseen and approved by the Office of the Tasmanian Economic Regulator.