Nationals Member for Cowper Luke Hartsuyker has welcomed the announcement that the Australian Competition and Consumer Commission (ACCC) will conduct a review of the retail electricity market.
Mr Hartsuyker said the review would help address one of the challenges in providing affordable, reliable electricity for Australian families and businesses.
“The practices of electricity retailers are one of the key elements that determine the cost of electricity for consumers, so I’m very supportive of the review,” Mr Hartsuyker said.
“The Government has instructed the ACCC to scrutinise electricity retailer behaviour as well as contracts offered to residential and business customers to ensure consumers benefit from competition in the National Electricity Market.
“Competition in retail electricity markets should mean lower prices for customers, but retail electricity markets don’t appear to be operating as effectively as they could.
“The ACCC inquiry will examine whether retailers’ margins and profitability are in line with their costs and risks. The inquiry will also consider important issues such as transparency and clarity in consumer contracts.
“Importantly, the inquiry will also consider the competitiveness of the services available to business customers.
“The Government is focused on practical measures to provide reliable, affordable electricity to power Australian homes and businesses.
“In addition to the ACCC inquiry, we are also delivering the Snowy Mountains Scheme 2.0, which will increase its generation capacity by 50 per cent by adding 2000 megawatts of renewable energy capacity. We are also investing in new energy storage capabilities.”
Given the complexity of the issues to be considered and the very large amount of data involved, the ACCC will be given until 30 June 2018 to report. An interim paper is expected within six months. The ACCC will be expected to work with other relevant agencies including the Australian Energy Regulator and the Australian Energy Markets Commission. The ACCC inquiry is in addition to the Independent Review into the reliability and stability of the National Electricity Market being chair by Chief Scientist Dr Alan Finkel AO.
The ACCC has been directed to consider:
• the key cost drivers of retail electricity pricing;
• the existence and extent of any entry barriers in retail markets;
• the impact of vertical integration;
• whether there is any behaviour preventing or limiting competition or consumer choice;
• the profitability of electricity retailers and whether these profits are commensurate with the risk retailers face;
• all wholesale market price, cost and conduct issues relevant to the inquiry.