The Economic Regulation Authority is an independent Government agency with two principal roles. The first is as the State's independent economic regulator, involving the administration of industry-specific legislation for gas, electricity, rail and water. The second involves undertaking inquiries referred to the Authority by Government on matters relating to regulated and non-regulated industries. This second role is similar to that played by the Productivity Commission at the federal level.

As part of its regulatory role the Authority is responsible for regulating the terms and conditions of access (including prices) to rail track infrastructure, gas transmission and distribution pipelines, and electricity transmission and distribution networks.

The Authority is also responsible for licensing and monitoring the performance of water, gas and electricity service providers.

From 21 September 2006, the Authority will have several new functions relating to the Western Australian Wholesale Electricity Market.

These include determining the allowable revenue for the Independent Market Operator and Western Power's System Management, the annual approval of price limits for reserve capacity and energy and, with the assistance of the Independent Market Operator, monitoring the short-term electricity market.

In performing these various functions, the Authority seeks to produce outcomes that promote fair prices, quality services and choice.