Market Review: Completed
Overview
On 31 October 2013, the Australian Energy Market Commission published the supplementary report of its review of competition in the retail electricity and natural gas markets in New South Wales.
The supplementary report builds on the AEMC’s final report and provides advice on how to inform and empower consumers thereby providing for more effective competition.
In our final report we found that competition in NSW retail energy markets is delivering discounts and other benefits to small consumers and that price regulation could be removed. However, we recommended that more can be done to make it easier for consumers to compare offers and choose an energy plan that suits them.
Background
Our work on the NSW Review is in response to a notification from the Standing Council on Energy and Resources, through the Ministerial Council on Energy (MCE), providing the AEMC with a request to undertake a review and provide advice on the state of competition in the New South Wales electricity and natural gas retail markets for small customers.
Retail competition reviews are conducted in accordance with the framework set out in the Australian Energy Market Agreement. The AEMC assesses competition in the retail markets for electricity and natural gas for the purpose of retaining, removing or reintroducing retail price regulation.
For the NSW Review, the MCE requested the AEMC to undertake a review of, and provide advice on:
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the state of competition and the extent to which it is deemed effective for small electricity customers (i.e. customers consuming less than 160 megawatt hours per annum) and small natural gas customers (i.e. customers consuming less than 1 terajoule per annum);
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the availability and take up of time of use tariffs and the impact of time of use tariffs on competition; and
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based on that assessment, advise on ways in which the effectiveness of competition can be improved (where competition is found not to be effective) as well as possible implementation strategies for the removal of retail price regulation for small electricity customers and small natural gas customers in NSW, regardless of the state of competition. This is to include advice for an option to gradually roll back retail price regulation through a reducing eligible consumption threshold.