By Sarah Pick, Partner

Background

Recent occurrences of widespread blackouts across the Northern Territory have highlighted the fragility of the existing electricity system and the urgent need for reform.[1] These outages emphasise the challenges of maintaining reliability in an increasingly complex energy landscape.

The Electricity System and Market Operator Act 2025 (NTESMO Act) and the Electricity Legislation Amendment (Market Reform) Act 2025 (Electricity Amendment Act), aim to create a more efficient and stable energy future for the Territory by (amongst other things):

• establishing Northern Territory Electricity System and Market Operator (NTESMO) as an independent statutory corporation; and
• facilitating the establishment of a new Northern Territory Electricity wholesale electricity market; and
• establishing the framework for creating the Territory Electricity Market Rules (TEM Rules) for governing system control, wholesale market operation, participation, access, planning, procurement and administration; and
• establishing the statutory framework for preparing, updating and implementing of a plan for the coordinated and efficient electricity infrastructure development across the regulated systems of Darwin-Katherine, Alice Springs and Tennant Creek known as the Regulated Electricity System and Investment Plan (RESIP); and
• facilitating the establishment of ‘Planning and Investment Review Panels’ (PAIR Panel) for the purposes of developing and implementing the RESIP.

Both Acts have been assented to but neither have commenced.

Key Purpose of each Act

The key purposes of each Act are summarised below.

• Electricity System and Market Operator Act 2025

The NTESMO Act, establishes NTESMO as a statutory corporation with the powers to manage electricity markets and power systems across the Territory, helping to ensure everyone has affordable, secure and reliable energy.[2]

Provides that NTESMO will undertake central planning and procurement functions to support new market arrangements that are being introduced under the Electricity Reform Act 2000 (ER Act) via amendments made by the Electricity Legislation Amendment (Market Reform) Act 2025.[3]

• Electricity Legislation Amendment (Market Reform) Act 2025

The Electricity Amendment Act:

• • enables (via regulations to be made under the ER Act) the identification of the power systems that are to be ‘regulated electricity systems’, which will be subject to the system control and market operation of NTESMO and the planning and procurement processes;[4]
  • establishes the ability for the TEM Rules to be made by an ‘authorised rule-making entity’;[5] and
  • creates the statutory framework for the RESIP which includes the establish of, and oversight of the RESIP development and implementation by, a PAIR Panel.

NTESMO’s Role

‘NTESMO’ is not a new concept to the Northern Territory. It already exists as the recognised Northern Territory Electricity System and Market Operator but it currently does not operate as an independent statutory body. Instead the NTESMO system control and market operator functions are embedded within Power and Water Corporation (PWC), primarily through PWC’s System Control division and carried out under PWC’s System Control Technical Code.

The NTESMO Act, will establish NTESMO as an independent statutory corporation responsible for electricity system control, planning, procurement and market operation for ‘regulated electricity systems’. Under the reforms, the existing system control functions performed by PWC will be excised and transferred to NTESMO.

A ‘regulated electricity system’ will be defined in the ER Act as ‘a power system prescribed by regulation to be a regulated electricity system’.[6] Based on current reform material, the intention is that the initial regulated electricity systems will be Darwin-Katherine, Alice Springs and Tennant Creek.[7]

NTESMO’s statutory functions[8] will include:

• monitoring and controlling the safety, quality, security and reliability of all the regulated electricity systems and other prescribed power systems;
• operating and administering a wholesale electricity market for each regulated electricity system prescribed by the ER Act to have a wholesale electricity market (noting that, initially, this is expected to apply only to the Darwin–Katherine electricity system[9]);
• supporting the development, and improving the effectiveness, of each regulated electricity system and wholesale electricity market administered by NTESMO;
• undertaking whole-of-system planning in relation to all of the regulated electricity systems; and
• procuring electricity infrastructure and services in accordance with RESIPs.

NTESMO may also be conferred additional functions by regulation under the NTESMO Act, by the Minister or by or under any other Act (including the ER Act).

TEM Rules

Another key feature of the reforms will be the introduction of the TEM Rules which will be made by the Minster and will establish the detailed framework for system control, wholesale market operation, procurement, planning and associated administrative processes.

The TEM Rules will replace the existing PWC System Control Technical Code and amendments to PWCs Network Technical Code and the Northern Territory National Electricity Rules will also need to be amended to facilitate NTESMO’s new role and the TEM Rules. The intention is that “the TEM Rules will provide a single set of rules by absorbing and expanding on the existing instruments that govern electricity system and market operation, which will provide greater clarity and transparency to electricity supply industry participants”.[10]

The Electricity Amendment Act will insert a new Division in Part 3 of the ER Act that sets out a power for the TEM Rules to be made, provides that the TEM Rules will have the force of law and sets out the scope of matters that the TEM Rules are empowered to address.

The Northern Territory Government have made a policy decision that, as part of the reforms, Territory Generation will be established as “the sole supplier of wholesale electricity services to the Alice Springs and Tennant Creek electricity systems”.[11] Given the breadth of matters that the TEM Rules will be able to address — including market operation, participation settings and system control requirements — we anticipate that the TEM Rules will set out the detailed operational arrangements for how Territory Generation will perform this role.

RESIP and the PAIR Panel

Under the reforms, RESIPs become the primary mechanism for long‑term, whole‑of‑system electricity planning across the Darwin–Katherine, Alice Springs and Tennant Creek systems. Their development and implementation involve three governance layers:

• NTESMO, which prepares the RESIP by developing the relevant assumptions, scenarios and modelling, and proposing an investment pathway aligned with system security, reliability and cost‑effectiveness objectives.
• The PAIR Panel, established under the amended ER Act, which is convened when needed to scrutinise NTESMO’s methodology, provide oversight of planning and procurement elements and advise on the suitability of the proposed investment pathway.
• The Minister, who receives the RESIP and the Panel’s report and is responsible for approving the final plan and determining the associated infrastructure, services and procurement strategy.

The purpose of a RESIP is to provide a coordinated, least‑cost pathway for electricity infrastructure development. Its statutory objects include improving affordability, reliability and security, and ensuring coordinated investment in generation, transmission, distribution, storage and related services. [12]

Once the Minister has considered the draft plan and the PAIR Panel’s advice, the RESIP will be authorised for publication and will become the mandated basis for future procurement and investment decisions. [13]

Next Steps

The enactment of the NTESMO Act and Electricity Amendment Act mark a significant milestone in the Northern Territory’s energy transition. These reforms will underpin future procurement processes and investment decision across the Northern Territory’s regulated electricity systems. The Acts will commence on a day to be prescribed by Gazette notice.

If you:

• operate as a generator, retailer or developer in the Northern Territory (or plan to operate in the Northern Territory in near future); or
• plan to participate in upcoming procurement processes aligned with the RESIP,

it will be essential to understand the new regulatory framework.

Please reach out if you have any questions regarding the operation of, or the participation in, the Northern Territory electricity market under the new legislative framework.

Acknowledgements

My thanks go to Imogen Hooke for her assistance in preparing this article. I would also like to recognise my colleagues, Lachlan Drew and Yannis Vrodos, whose extensive work in energy and infrastructure matters complements our team’s expertise. If you would like advice on the implications of the NT electricity market reforms, please feel free to reach out to me as your primary contact.

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[1] See Minister Maley’s Media Release found at https://createsend.com/t/t-5EF46B3A75144DB22540EF23F30FEDED.

[2] See the Electricity System and Market Operator Bill 2025  Explanatory Statement found at https://legislation.nt.gov.au/LegislationPortal/Bills/~/link.aspx?_id=ED5F3EAA39074819B22BF90B217A1792&_z=z.

[3] See the Electricity System and Market Operator Bill 2025  Explanatory Statement found at https://legislation.nt.gov.au/LegislationPortal/Bills/~/link.aspx?_id=ED5F3EAA39074819B22BF90B217A1792&_z=z.

[4] See the Electricity Legislation Amendment (Market Reform) Bill 2025 Explanatory Statement found at https://legislation.nt.gov.au/LegislationPortal/Bills/~/link.aspx?_id=241F1EC267344FA1969BBFFDBC89F288&_z=z

[5] See page 5 of the Industry Reference Group Reform Update and Planning Framework (7 October 2025)  https://dme.nt.gov.au/__data/assets/pdf_file/0006/1573665/meeting1-industry-reference-group-reform-update-planning-framework-07102025.pdf.

[6] Section 5(2) of the Electricity Amendment Act.

[7] See https://dme.nt.gov.au/renewables-energy-systems/reform-territory-electricity-market

[8] See section 6 of the NTESMO Act.

[9] See https://dme.nt.gov.au/renewables-energy-systems/reform-territory-electricity-market

[10] See the Electricity Legislation Amendment (Market Reform) Bill 2025 Explanatory Statement found at https://legislation.nt.gov.au/LegislationPortal/Bills/~/link.aspx?_id=241F1EC267344FA1969BBFFDBC89F288&_z=z

[11] See https://dme.nt.gov.au/renewables-energy-systems/reform-territory-electricity-market

[12] See section 40G of the Electricity Amendment Act.

[13] See page 20 of the Industry Reference Group Reform Update and Planning Framework (7 October 2025) https://dme.nt.gov.au/__data/assets/pdf_file/0006/1573665/meeting1-industry-reference-group-reform-update-planning-framework-07102025.pdf.