AEMC's final rule aims to make grid more resilient

At a time when Australia is experiencing more frequent and intense storms, flooding and bushfires, the Australian Energy Market Commission (AEMC) has created a final rule aimed at making the electricity grid more resilient to extreme weather events.

The rule comes in response to a request from Victorian Energy and Resources Minister Lily D’Ambrosio, after separate severe weather events left hundreds of thousands of people without power — in some cases for several weeks.

Distribution network resilience will now be explicitly recognised in the National Electricity Rules, establishing a formal framework that includes:

• new resilience expenditure factors that distribution network service providers (DNSPs) and the Australian Energy Regulator (AER) must consider in developing and assessing expenditure proposals;
• a requirement for the AER to develop, publish and maintain formal Network Resilience Guidelines;
• new annual planning and reporting requirements to improve the transparency and accountability of DNSP performance, and outcomes for consumers, in severe weather events.
   

This increased regulatory clarity aims to help DNSPs to more effectively plan for extreme weather and invest in measures that reduce the risk of power outages while supporting customers in need.

Some of the actions taken by DNSPs under the new rule could include strengthening poles and wires in high-risk communities, relocating infrastructure in flood-prone areas, or increasing the number of mobile generators and substations that can provide back-up when the power supply is disrupted.

Additionally, DNSPs can propose resilience spending on programs to manage bushfire and flood risks.

AEMC Chair Anna Collyer said the final rule was developed with the long-term interests of consumers in mind.

“Hundreds of thousands of Australians have experienced power outages from extreme weather just this year alone,” she said.

“The impact can be highly disruptive, especially for vulnerable customers and communities that are less resilient to severe weather events.

“The new framework supports more equitable outcomes, while improving the transparency and accountability of resilience spending that benefit all consumers.”

From 2 October 2025, Victorian DNSPs can include resilience expenditure factors in their revised regulatory proposals, which the AER must take into account in its final determinations for the 2026–31 regulatory control period.

Transitional rules will require that the AER develops and publishes its formal Network Resilience Guidelines by 1 December 2026; and DNSPs must comply with the new annual planning and reporting requirements starting with their 2028 Distribution Annual Planning Reports (DAPR).

The final rule is part of a larger program of work designed to reduce the impacts of climate change on the energy grid. This includes the Victorian Government’s two expert panel reviews into network and community resilience and the AER’s establishment of a Value of Network Resilience.

To learn more about the resilience arrangements, or to provide feedback, visit the project page.

Image credit: iStock.com/Matt Palmer