On 26 August 2020, the ACCC issued a draft determination proposing to grant authorisation to enable a group of 47 Victorian local councils (the Councils), led by Darebin City Council, to pool their electricity demand and place a single tender calling for proposals for the supply of retail electricity services and renewable energy certificates from an electricity retailer.
The ACCC authorised an earlier version of these arrangements on 31 January 2020, though the Councils are now seeking to revoke and substitute the authorisation with amendments to:
- add three new councils to the group
- remove four councils and the Municipal Association of Victoria from the group and
- make Darebin City Council the leading procurement organisation to conduct the tender process.
Authorisation is proposed for a period of 11 years. The ACCC has also granted interim authorisation to allow the Councils to conduct the tender process while the ACCC continues its assessment of the application.
The ACCC considers that the Councils collectively tendering for their electricity needs is likely to result in public benefits, including transaction cost savings, environmental benefits and facilitating greater competition for the supply of electricity to the Councils. The ACCC considers that these public benefits would outweigh the minimal, if any, likely detriment to the public.
Authorisation provides businesses with legal protection for arrangements that may otherwise risk breaching the law but are not harmful to competition and/or are likely to result in overall public benefits.
The ACCC invites submissions by 18 September 2020 before making its final decision.
Further information about the ACCC’s draft determination and the application for authorisation is available on the ACCC’s public register at: Darebin City Council & Ors.