Australia is transitioning to a new energy future. As our energy system transitions, the Government’s priority is cheaper electricity for all Australian households and businesses and ensuring there is enough electricity generation to reliably supply households and businesses.
The Government has already taken steps over the past 12 months to address generation, network and retail costs, while pursuing reforms that place an emphasis on well-regulated markets and technology. As a result we’ve turned the corner on electricity prices as reforms to rein in the power of network companies and shore up gas supplies are making energy more affordable.
A new package of measures announced on 21 August 2018, will put further downward pressure on electricity prices with the introduction of:
- a default price for electricity to ensure households and small to medium sized businesses on high priced standing offers have lower bills, and to empower consumers to clearly and easily compare electricity offers to find the best deal.
- a mandatory code of conduct for energy comparison services to ensure they focus on benefits to consumers, not the commissions they receive from energy companies.
- support, where necessary, for the development of new, stable, low-cost energy generation projects.
- an ACCC inquiry into prices, profits and margins of energy companies in the National Electricity Market and stronger powers for the ACCC and the Australian Energy Regulator to address concerns with the market.
ACCC inquiry into improving electricity affordability
The Government directed the Australian Competition and Consumer Commission (ACCC) to undertake the Inquiry into Retail Electricity Pricing to identify the root causes of high electricity prices across the entire electricity supply chain. The final report in July 2018 includes 56 recommendations for improving the operation of the National Electricity Market.
At the COAG Energy Council meeting in August 2018 the Council welcomed the ACCC’s Retail Electricity Pricing Inquiry final report. As the report recommends action on a broad range of fronts falling across state and territory, Commonwealth and cross-jurisdictional issues, Ministers agreed to progress an initial set of 16 cross-jurisdictional recommendations from the Report, including recommendations to reduce the time it takes for consumers to switch retailers, ensure consumers get the information they need before their contract ends and fast tracking consideration of strengthening of penalties and AER’s investigative powers. Ministers agreed to a program of work to consider the remaining recommendations.
Monitoring of prices, profits and margins
The Government has directed the ACCC to monitor and report on prices, profits and margins in the supply of electricity in the National Electricity Market. The first report is due to government by 31 March 2019, with reporting to continue at least every 6 months until 2025.
The formal Government direction enables the ACCC to use its information gathering powers, meaning electricity providers are legally required to provide the ACCC with information relating to the inquiry.
Under the direction the ACCC may also make recommendations to Government on how to improve outcomes for electricity customers.
Australian Competition and Consumer Commission, Australian Government
Final Report of the ACCC Electricity Supply Prices Australian Government