The Federal Government has directed the Australian Competition and Consumer Commission to immediately commence an inquiry into retail electricity pricing.
“Electricity prices have nearly doubled on top of inflation in most parts of Australia over the last decade based on a variety of different factors. It will be important to understand and examine these different factors in each state and territory,” ACCC Chairman Rod Sims said.
“The ACCC is also keen to look at the structure of the retail industry, the nature of competition, the representation of prices to consumers and other factors influencing the price paid by Australians for electricity,” Mr Sims said.
“We enter this inquiry with an open mind and look forward to developing recommendations which can make a difference for Australian households and businesses.”
In undertaking this work the ACCC will work with energy agencies such as the Australian Energy Regulator and the Australian Energy Markets Commission.
The ACCC is expected to produce a preliminary report by the end of September 2017, with a final report due in 30 June 2018.
The ACCC is currently undertaking a dairy inquiry and in 2015 undertook the east coast gas inquiry at the direction of government. The ACCC has recently completed a market study into cattle and beef markets, and studies into the new car retailing industry and the communications sector are underway.
Background
By holding an inquiry under Part VIIA of the Competition and Consumer Act (2010), the ACCC can use compulsory information gathering powers to gather the information and hold hearings to assess the level of competition in a market.
The ACCC will distribute an Issues Paper on matters relevant to the inquiry, and will be calling for public submissions. The ACCC will also conducting public and private hearings.
The ACCC’s current involvement in the retail electricity sector and related industries largely relate to ensuring compliance with the provisions of the Act prohibiting anti-competitive practices and unfair practices (such as misleading and deceptive conduct and false and misleading representations).
In 2015, Origin Energy Limited and two of its subsidiaries (Origin) paid penalties totalling $325,000 for contravening the Australian Consumer Law by making false or misleading representations in proceedings brought by the Australian Competition and Consumer Commission.
In 2015, AGL South Australia Pty Ltd (AGL SA) paid penalties of $700,000 and to offered refunds totalling approximately $780,000 to 23,000 consumers for making false or misleading representations about the level of discount residential consumers would receive.
The ACCC has also previously taken action against energy retailers for illegal door-to-door selling practices.
- AGL Sales Pty Ltd and AGL South Australia Pty Ltd paid combined penalties of $1.555 million for illegal door-to-door selling practices.
- Origin Energy Electricity Limited (Origin) paid $2 million in penalties in relation to unlawful door-to-door selling practices.
- Neighbourhood Energy Pty Ltd and Australian Green Credits Pty Ltd paid a total penalty of $1 million for illegal door-to-door selling practices.