The Australian Competition and Consumer Commission (ACCC) is commencing a new inquiry into the supply of electricity in the National Electricity Market (NEM) 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 NEM.
The ACCC will report at least every six months on information it obtains from energy companies, including the prices customers are paying for electricity and the underlying factors for any significant price movements.
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The ACCC will specifically be examining whether any wholesale cost savings are being passed through to customers.
In its July 2018 report on restoring electricity affordability and Australia’s competitive advantage, the ACCC made recommendations that aimed to bring increased competition and lower supply costs so as to reduce prices significantly for businesses and households. The ACCC has been asked to monitor the effects of policy changes, including those resulting from its July 2018 report recommendations.
A discussion paper for the inquiry, published today, is seeking submissions on three key areas:
- the analytical framework for this role, including our expectations of market outcomes and participant behaviour, and the measures we will use to monitor and analyse prices and behaviour
- how we will monitor the impact of policy developments
- the processes and timing for the collection of information, including what data we will require.
ACCC Chair Rod Sims said, “This new long-term role for the ACCC will ensure pressure remains on all players in the energy supply chain to behave in a competitive way and only pass on those costs that are reasonable.
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“It is also important that they pass on any cost savings to consumers,” he said.
“If we find problems in the market that aren’t being fixed by existing policy tools, we will be making recommendations to government on what extra changes are needed,”
The ACCC will hand its first report to the Treasurer by 31 March 2019.
Submissions close by 19 December 2018 and can be emailed to [email protected].
The discussion paper and terms of reference are available at Electricity Market Monitoring.