Much-needed reforms that are underway will help address the dysfunctional state of energy retailing in Australia, but action in other parts of the electricity market would further reduce prices for consumers, the ACCC’s first electricity monitoring report says.
Progress in retail affordability measures
The Federal Court has ordered penalties of $900,000 against Amaysim Energy Pty Ltd (trading as Click Energy) for making false or misleading marketing claims about potential discounts and savings available to Victorian and Queensland consumers, in breach of the Australian Consumer Law.
Between October 2017 and March 2018, Click Energy told consumers in Victoria and South East Queensland they could get discounts of between 7 and 29 per cent under its market energy offers, if they paid their bills on time.
The ACCC welcomes moves by the Commonwealth Government towards implementing several recommendations from the ACCC’s retail electricity pricing inquiry. These reforms will bring down electricity prices significantly for over half a million consumers on excessive standing offers and will help all other customers generally better to compare offers.
The ACCC is commencing a new inquiry into the supply of electricity in the National Electricity Market and is consulting on how it will undertake this role.
The ACCC has been tasked with monitoring and reporting on the supply of retail and wholesale electricity in Queensland, NSW, Victoria, South Australia, Tasmania, and the ACT, until 2025. It will have a focus on monitoring prices, profits and margins, including the effect of policy changes in the National Electricity Market.
In a speech to the Australian Conference of Economists in Canberra today, Chair Rod Sims discussed the ACCC’s approach to market intervention in our current inquiries.
“Enhancing competition does not mean protecting all market participants from failure, nor does consumer protection extend to shielding consumers from price increases set by the markets.”
ACCC Chair Rod Sims delivers a speech to the Australian Conference of Economists, discussing a number of inquires the ACCC is involved with, including the digital platforms inquiry, the retail electricity prices inquiry and the consumer data right.
The ACCC welcomes today’s announcement by the South Australian Chamber of Mines and Energy and SIMEC ZEN Energy of investment in new electricity generation capacity in South Australia.
“The ACCC authorised SACOME members to go to market to find a more competitive supplier of electricity. We did this because, as a group, they had a better chance of securing supply from a new source of generation that would bring new competition to the market,” ACCC Chair Rod Sims said.
Nicole Ross, General Manager ACCC Gas Inquiry Unit, delivered the speech on the ACCC Chairman's behalf due to an unavoidable scheduling conflict. The speech outlines what the ACCC is doing to help bring about a more competitive east coast gas market.
Australia’s east coast gas market remains incredibly tight and users are paying for this with high prices and limited sources of competing supply.
The east coast gas market is at a crossroads and the only real choice is to address the fundamental supply problem, particularly in the south.
The supply situation is most stark in the case of the southern part of the east coast, with the ACCC’s gas inquiry finding that there is not enough production forecast in the southern states to meet southern demand in 2018.
In his annual CEDA address, Chairman Rod Sims launched the ACCC's 2018 Compliance and Enforcement policy. This year, the ACCC will focus on consumer issues in broadband services and energy, competition in the financial services and commercial construction sectors, systemic consumer guarantee issues, and conduct that may contravene the new misuse of market power and concerted practices provisions.