Electricity prices paid by many residential and small business customers in New South Wales, South Australia, South East Queensland and Victoria fell between 2018 and 2019, the ACCC’s analysis of extensive data from over 8.5 million bills has shown, according to its latest electricity markets report.
Efficient infrastructure is integral to rebuilding the economy beyond the pandemic but cannot come by excessively focussing on the needs of infrastructure owners at the expense of the users, ACCC Chair Rod Sims said today.
Mr Sims was speaking at the Australian Financial Review’s National Infrastructure Summit on competition issues in infrastructure and changes since COVID-19.
The Federal Court has ordered iSelect Limited to pay $8.5 million in penalties for making false or misleading representations about its electricity comparison service.
iSelect admitted that, between November 2016 and December 2018, it misled consumers by representing on its website that it would compare all electricity plans offered by its partners and recommend the most suitable or competitive plan, when this was not the case. During the period, hundreds of thousands of consumers visited the website.
The ACCC has instituted proceedings in the Federal Court against Sumo Power Pty Ltd (Sumo) alleging it made false or misleading representations to Victorian consumers in relation to its electricity plans.
It is alleged that between June and November 2018, Sumo promoted 12-month electricity plans with low electricity rates and large ‘pay on time’ discounts of up to 43 per cent to residential consumers, while planning to substantially increase the prices charged to those consumers who signed up within a few months, or knowing it was likely to do so.
Electricity provider Locality Planning Energy Pty Ltd (LPE) has paid a penalty of $10,500 after the ACCC issued it with an infringement notice for an alleged contravention of the Electricity Retail Code.
This is the first enforcement action taken by the ACCC for a breach of the Code.
The Code was introduced in July 2019 to reduce confusion and make it easier for consumers to compare retail electricity offers. It imposes rules on electricity providers for how they must advertise prices and conditions on market and standing offers.
New guidelines, published by the ACCC, will assist electricity retailers and generators to comply with laws aimed at protecting consumers and businesses from excessive electricity prices.
The laws prohibit electricity retailers from keeping consumer and small business prices unnecessarily high when costs fall, and prohibit generators from inflating wholesale prices or blocking access to critical contracts, which could increase retail prices. The laws will form part of the Competition and Consumer Act and come into effect on 10 June 2020.
The ACCC has released draft guidelines setting out guidance on how electricity retailers and generators should comply with three new laws which are designed to reduce the price of electricity for consumers.
The draft guidelines, which were released for consultation today, provide examples and information about the new laws, which were introduced by the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act 2019, and come into effect on 10 June 2020.
The average annual bill for households in the National Electricity Market fell in 2018–19 compared with the previous year, by $65 or 4 per cent, the latest ACCC electricity markets report has found.
But while average household bills fell to $1509 in 2018–19, households were still paying about 20 per cent ($254) more than in 2007–08, and the average price for a unit of electricity drawn from the grid was about 45 per cent higher in real terms.
ACCC Chair Rod Sims addresses the 2019 AFR National Energy Summit about Australia’s electricity and gas affordability.