ACCC issues third carbon monitoring report

29 October 2014

The Australian Competition and Consumer Commission has provided the third carbon monitoring report to the Treasurer, the Hon. Joe Hockey MP. The report details the ACCC’s monitoring activities in the September 2014 quarter to assess the general impact of the carbon tax scheme, and includes the effect of the carbon tax repeal.

“The ACCC has observed businesses acting quickly to remove carbon tax cost components from prices, with widespread adherence to the reporting and information requirements of the new carbon tax price reduction obligation laws.

“The ACCC is continuing to engage with some businesses to ensure that appropriate steps are taken to remove the carbon tax cost component from their bills and to communicate this to customers.” ACCC Chairman Rod Sims said.

“As we have said all along, what went on must now come off.”

The ACCC has:

  • received responses to all 244 substantiation notices issued;
  • received 39 more substantiation statements than expected (283 in total); and
  • received less than 15% of the complaints and inquiries received over the similar period on the introduction of the tax.

In electricity, the industry most affected and the focus of the ACCC’s work, the wholesale market is reflecting lower prices.  Most retailers have confirmed the removal of the carbon tax cost component from their bills from 1 July 2014 or have backdated their price change to that date. Consumers will see the price reductions and refunds as they receive their bills.

The publicly available substantiation statements made by retailers make representations of estimated average savings ranging from 5.2% to 12.4% for electricity customers and 3.2% to 8% for natural gas customers, depending on their location and provider.

Significant savings are also expected in the synthetic greenhouse gas and landfill sectors.

However, the ACCC is disappointed by the level of detail provided in some responses to the carbon tax removal substantiation notices.  The ACCC is continuing to engage with some businesses to obtain information about their direct and indirect carbon cost savings to ascertain that all savings arising from the carbon tax repeal are being passed on.

“The ACCC has powers to take action against the suppliers of electricity, natural gas, synthetic greenhouse gas or synthetic greenhouse gas equipment that fail to pass through all cost savings from the carbon tax repeal. The ACCC continues to keep a close eye on prices and public statements,” Mr Sims said.

“Should a supplier fail to pass through all direct and indirect cost savings from the carbon tax repeal, fail to provide the ACCC with all the information they are required to provide, or make false or misleading representations, the ACCC will take action.”

A copy of the October report is available on our website: Carbon monitoring report: September quarter 2014.

On 28 August 2014, the ACCC released a publication on the Carbon Tax Price Reduction Obligation to assist businesses understand their obligations under the carbon tax repeal legislation.

The next report regarding the ACCC’s operations in relation to Carbon Tax Price Reduction Obligation and the effect of the carbon tax repeal for the December 2014 quarter will be provided in the report to the Minister by 28 January 2015.

Background

The range of estimated average annual cost savings for residential electricity customers provided by retailers, are:

State

Range of % figures

Range of $ figures

Range of c/kWh figures

New South Wales

6.01–10

158–179

2.383

Victoria

7–12.4

132–146

2.401–2.881

Queensland

8–11.14

170–174

-

South Australia

5.2– 8

136–159

2.379

Tasmania

9.4

-

-

Australia Capital Territory

11–11.5

189–222

2.776

Western Australia

9.8

46–263

-

Northern Territory

-

-

1.53

 

The range of estimated average annual cost savings for residential gas customers provided by retailers, are:

State

Range of % figures

Range of $ figures

Range of $/GJ figures

New South Wales

3.6–5

27–93

-

Victoria

6.4–8

75–105

1.61

Queensland

3.2– 4

-

-

South Australia

3.6–5

37

1.92

Tasmania

4.7–5.14

-

1.56

Australian Capital Territory

5.5–5.9

93–98

-

Western Australia

-

-

1.58 – 1.70

Northern Territory

3.5

-

-

Release number: 
MR 263/14
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