December 2023 report15 Dec 2023
On 1 December 2023, the ACCC provided a report to the Treasurer as part of its inquiry into the prices, profits and margins in the supply of electricity in the National Electricity Market (NEM). The ACCC published the report on 15 December 2023.
For the first time in this inquiry, we have collected new information from retailers to understand how retailers are changing prices for their existing market offer customers. Our analysis draws on this dataset to assess pricing outcomes for existing customers, and how these prices compare to the default offer prices and to new acquisition offers in the market.
This is the second time we have reported on the hedging contract market, used by electricity retailers and generators to manage the risk of large fluctuations in spot market prices. We examine recent market dynamics, such as trends in prices, volumes, and product types, and as well as the experience of small retailers in the contract market. To further inform our analysis of the contract market, we commissioned an independent expert, Frontier Economics, to prepare a report on future financial risk management in the NEM and whether it can continue to appropriately support retailers’ ability to manage risk in the future.
The report also continues our annual timeseries covering retailers’ costs and profitability, which was started during the Retail Electricity Pricing Inquiry. This report provides our first full year of cost stack data following the market volatility of mid-2022. It reveals how retailers’ costs and margins have changed since then, and also over the longer-term.
See: Inquiry into the National Electricity Market - December 2023 report