The Australian Competition and Consumer Commission has issued an interim authorisation of amendments to the National Electricity Code (Code) to facilitate the introduction of retail competition to all electricity consumers.
Retail competition allows electricity consumers to choose their electricity suppliers.
Retail competition has been phased in progressively commencing with the largest electricity consumers in the mid 1990s. The final stage of retail competition will commence from 1 January 2001 and will eventually allow all customers, including households, to choose their electricity retailer.
The code changes for retail competition:
- establish the principles and framework to allow retail level metering data to be used in the current wholesale electricity market
- allows the details of metering arrangements to be determined by the individual State governments; and
- allows retail competition to occur on the basis of either existing meters or time-of-use ("smart") meters.
The ACCC has moved swiftly on this decision in response to a request by State governments in light of their retail competition timetables.
"At this time, the ACCC accepts the argument that the code changes will provide consumers with the benefits of a relatively low cost framework for access to competition in the supply of electricity", Acting ACCC Chairman, Mr Allan Asher, said today.
"However, the ACCC considers that the benefits of the proposed arrangements will be improved by ensuring that there is a transparent and consistent approach to retail competition in the National Electricity Market.
In response to concerns raised by electricity retailers and consumer groups, the ACCC has imposed a number of conditions. The effect of these conditions is to require:
- that an independent party audits the State procedures to ensure that they are consistent with the national market principles; and
- a review of the effectiveness of the low cost metering solution be conducted by December 2003.
"These conditions are intended to provide a flexible mechanism for delivering retail competition. Despite their current cost disadvantage, in the longer term, smart meters may provide the greatest opportunity for there to be vigorous price competition for consumers", Mr Asher said.
The ACCC will continue to consider the issues raised by the retail competition Code changes and expects to release its draft determination in November 2000.