The Australian Competition and Consumer Commission today issued its draft determination authorising Tasmania's electricity derogations and vesting contract.
The draft determination paves the way for Tasmania's entry into the National Electricity Market.
In making its assessment, the ACCC has taken into consideration Tasmania's energy reform program comprising two major infrastructure projects and market reforms. An undersea electricity cable (Basslink) and a natural gas pipeline will link Tasmania to the mainland. The Tasmanian electricity market will be deregulated. For the first time, existing Tasmanian generators will face competition from new entrants and from mainland generators across Basslink. Consumers will have their choice of electricity retailer.
To authorise the proposed arrangements the ACCC must determine that the public benefits out-weigh any anti-competitive detriments.
The ACCC's draft determination accepts the public benefits that Tasmania's energy reform program will relieve Tasmania's energy constraints and will provide peak load capacity into the mainland.
The ACCC believes the size of any anti-competitive detriment is more uncertain as it is linked to the extent and diversity of new entry to the Tasmanian market, including competition across Basslink, and to the behaviour of all the market players.
An important consideration for the ACCC is that the Tasmania Government will be able to respond to competition concerns that may emerge in the future. Also actions of market participants will be disciplined by compliance with the Trade Practices Act and the National Electricity Market rules.
Interested parties can request the ACCC to hold a pre-determination conference. A copy of the draft determination and related documents will be available on the ACCC website: http://www.accc.gov.au or from Mrs Maxine Helmling on 02 6243 1246.