​The Electricity Supply Industry Act 1995 (ESI Act) provides that a person must not carry on generation, transmission or distribution operations in Tasmania or retailing operations on the Bass Strait Islands (BSI) unless that person is the holder of a licence. Those operations for which a licence is not required are contained in the Electricity Supply Industry Regulations 2018.

It is noted that from 1 July 2012, to retail electricity on mainland Tasmania, a person must obtain a retailer authorisation from the Australian Energy Regulator.

Pursuant to the ESI Act, the Regulator is responsible for administering the licensing system for electricity entities. The Regulator has the authority to consider and determine licence applications, and can refuse or issue licences for the generation, transmission, distribution of electricity in Tasmania and retailing of electricity on the BSI.

The ESI Act outlines the matters that the Regulator may consider in deciding whether to grant a licence. The Regulator's jurisdiction does not include local government, planning or environmental issues.

Those entities holding an electricity licence and a copy of the licence itself are contained in the Electricity Licence Register.

The general approach adopted in the licences is to establish a framework to be supplemented by various management plans. These plans are developed by the relevant entities. This ensures that the Regulator does not intrude on the management of the businesses. At the same time, the licences provide a reporting framework allowing the Regulator to monitor performance of the businesses.

The terms and conditions of the licences have been developed through a process of consultation with licensees and interested parties.