The Northern Territory Government has passed new bills aimed at major reform to the Northern Territory’s electricity market.

Background

In an attempt to address ongoing and widespread electricity supply failures and aging electricity infrastructure, the Northern Territory Government has passed large scale legislative reforms which will introduce significant changes to the operational framework and regulation of the Northern Territory electricity market.

The reforms

On 23 October 2025, the Northern Territory Government passed two electricity reform bills, being the:

• Electricity Legislation Amendment (Market Reform) Bill 2025; and
• Electricity System and Market Operator (NTESMO) Bill 2025.

Electricity Legislation Amendment (Market Reform) Bill 2025

The Electricity Legislation Amendment (Market Reform) Bill 2025 represents significant changes to the existing legislative framework of the electricity market currently set out in the:

• Electricity Reform Act 2000 (NT) (ERA); and
• National Electricity (Northern Territory) (National Uniform Legislation) Act 2015 (NT).

The purpose of the changes are succinctly summarised by the insertion of new objectives into the ERA, as follows:

• to facilitate the coordinated planning, development and operation of electricity infrastructure and power systems; and
• to support and facilitate coordinated investment in relation to electricity infrastructure and power systems.

The changes are to be implemented in three coordinated stages:

• Stage 1 amendments include:
  • creation of Territory Electricity Market Rules (TEM Rules) to replace the existing System Control Technical Code, which will outline the framework for system control, market operation, procurement, planning and associated administrative processes.
• Stage 2 amendments include:
  • licensing of the Northern Territory Electricity Market Operator (NTESMO) entity by the Utilities Commission; and
  • transfer of functions from Power and Water Corporation as market operator and system controller to NTESMO.
• Stage 3 amendments include:
  • NTESMO taking up its new functions in relation to planning and procurement; and
  • implementation and operation of the TEM Rules, the Regulated Electricity System and Investment Plans (RESIP) and central procurement processes.

Electricity System and Market Operator (NTESMO) Bill 2025

The Northern Territory Government has also passed the Electricity System and Market Operator (NTESMO) Bill 2025, alongside the Electricity Legislation Amendment (Market Reform) Bill 2025.

The bill will establish NTESMO as a central part of the new electricity market governance arrangements.

The NTESMO will be a standalone government corporation to:

• oversee control of the existing systems, and wholesale electricity market functions currently performed by Power and Water Corporation; and
• introduce centralised planning and procurement powers and processes to support market changes under the ERA.

NTESMO functions

Section 6 of the Electricity System and Market Operator (NTESMO) Bill 2025, states that the NTESMO will have six primary functions, being to:

1. Control: monitor and control the safety, quality, security and reliability of each regulated electricity system and any power system prescribed by the regulation, and in doing so, have regard for the impact any action taken by it may have on the total cost of electricity in the Northern Territory;
2. Operate: operate and administer a wholesale electricity market for each regulated electricity system declared by regulation under the Electricity Reform Act 2000 to have a wholesale electricity market operated and administrated by NTESMO;
3. Support: support the development, and to improve the effectiveness, of each regulated electricity system and wholesale electricity market administered by NTESMO;
4. Planning: to undertake whole-of-system planning in relation to the regulated electricity systems in accordance with the Electricity Reform Act 2000;
5. Procure: to procure electricity infrastructure and services in accordance with investment plans and requirements developed under the 30 Electricity Reform Act 2000; and
6. Ad-hoc: perform any other function conferred on NTESMO by regulation, the Minister, or by or under the Electricity Reform Act 2000 or any other Act.

Importantly, the functions of the NTESMO, are not intended to limit or minimise:

• the ERA; or
• the TEM Rules.

Implications

The Northern Territory Government’s electricity market reforms represent a major shift towards modernising the approach to how energy is managed and delivered across the region. By establishing NTESMO as a standalone and independent market operator, introducing new planning and procurement frameworks, and overhauling existing technical codes, the reforms aim to address long-standing infrastructure challenges and improve system reliability. The Northern Territory Government has stated that these changes are designed to maximise purchasing power, put downward pressure on system costs, and facilitate a more stable and reliable system that is future proofed for Northern Territorians. The bills have been passed by the legislative assembly and are hoped to lead to more efficient investment in energy infrastructure, better service delivery, and long-term benefits for consumers and the broader community.

This article was written by Fabio Fior, Partner, Andrew Giles, Partner, and Cooper Hood, Senior Associate.