The ACCC released a final report in July 2018 that outlined the prospects to improve electricity pricing and affordability for Australian consumers and businesses.
The inquiry which commenced in March 2017 identified the root cause of high electricity prices across the electricity supply chain, and has now made 56 recommendations pin-pointing ways to fix the National Electricity Market.
“The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses” ACCC Chair Rod Sims said.
The ACCC’s Recommendations are as follows:
- Abolishing the current retail ‘standing’ offers, and replacing them with a new ‘default’ offer consistent across all retailers, set at a price determined by the Australian Energy Regulator (AER).
- Requiring retailers to reference any discounts to the new ‘default’ offer pricing determined by the AER, making it easier for consumers to genuinely compare offers.
- A mandatory code for comparator websites to be introduced so that offers are recommended based on customer benefit, not commissions paid.
- Voluntary write downs of network overinvestment, including the NSW, Queensland and Tasmanian governments (or equivalent rebates). This could save consumers in NSW, Queensland and Tasmania at least $100 per year.
- Premium solar feed-in-tariff schemes should be funded by state governments and the small scale renewable energy scheme should be phased out, saving non-solar consumers $20-$90 per year.
- Government support to make bankable new investment by new players.
- Restructuring of Queensland generators into three separately owned portfolios to improve competition.
- Limiting companies with 20 per cent or more market share from acquiring more generation capacity.
- Improving the transparency of over-the-counter contract trading by requiring reporting of these trades to a central registry.
- Improving the AER’s powers to investigate and address problems in the market and increasing penalties for serious wrongdoing. (ACCC Report)
The ACCC estimates that if its recommendations are implemented then it will likely save the average household 20 to 25% on their electricity bills or around $290-$415 per annum.
Further Australia’s 2.2 Million small to medium businesses could save an average of 24% on their electricity bill.
Commercial and industrial customers, like mining and manufacturing companies, have watched what has been a competitive advantage to them. If the ACCC recommendations are followed they could see electricity costs decrease by 26%.
Learn more about how the ACCC recommendations can affect your business at the Competition & Customer Experience in Energy, 13th & 14th November 2018, Melbourne.