ACCC To Review Australia’s Retail Electricity Market

Massive savings on electricity

The Australian Competition and Consumer Commission has been tasked with reviewing retail electricity prices across the nation.

We recently reported on a Grattan Institute study that found retail electricity prices in Sydney, Melbourne, Brisbane and Adelaide have almost doubled over the past decade. In the case of Victoria, the report expressed concerns the profit margin for electricity retailers in Victoria appears to be approximately 13 per cent; more than double what regulators traditionally considered fair.

It was apparently this report and other recent research that has spurred the Federal Government into announcing the review.

“A better deal in electricity is vital to keeping the lights on, delivering cheaper prices to families and businesses and sustaining jobs, particularly the thousands of jobs in our energy-intensive industries,” said part of a joint statement from Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.

Electricity costs in Australia
Image: BigStock

While the terms of reference are yet to be published on the ACCC site, SBS reports the review will delve into a number of issues, including:

  • The components  of retail electricity pricing.
  • Behaviour that may be preventing or curtailing competition or choice for consumers
  • Whether electricity retailer profit margins are commensurate with the risks of the environment in which they operate.

The wholesale sector won’t escape the ACCC’s probing as any issues related to the wholesale electricity market’s effect on retail pricing will also be investigated. The ACCC may have a significant amount to say with regard to that aspect as the activities of generators has repeatedly been called into question.

Any relief from skyrocketing electricity prices occurring as a result of the ACCC’s review will be some way off. The Commission will be given until June 30, 2018 to complete the review, but will be required to produce a preliminary paper within six months.

A report published last year by Australian consumer group Choice stated electricity bills are the primary concern of Australian consumers, with 81% of those surveyed saying it was their no.1 worry.

It’s little wonder then that Australians continue to gravitate towards installing solar power systems as a way of controlling energy costs. In Queensland alone, there are now more than 500,000 solar panel systems installed across the state. According to the latest data from Australia’s Clean Energy Regulator, 1,645,464 small-scale PV systems are in place around the nation.

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