The Australian Energy Market Commission (AEMC) today published the First Final Report of its Review of the Effectiveness of Competition in Electricity and Gas Retail Markets in South Australia – confirming its preliminary finding that retail competition for both electricity and gas is effective.

AEMC Chairman, Dr John Tamblyn, said the Commission’s Final Report was prepared following extensive consultation with a wide range of stakeholders.

“The majority of small energy customers in South Australia know about energy retail competition and are participating actively in the energy market,” Dr Tamblyn said.

“This is particularly evident from the high rate at which customers are switching to energy market contracts. More than 80% of residential energy customers are aware of retail competition and more than 60% have switched to market contracts,” he said.

“There is also evidence of strong rivalry between energy retailers as they compete to gain and retain market share by offering customers the choice of alternative prices and services.”

Dr Tamblyn noted that market entry and expansion by new energy retailers has strengthened competition and customer choice in the energy retail market.

“New entrant retailers have continued to win market share from the two established South Australian retailers and now account for more than 40% of small customers in both the electricity and gas markets”.

The AEMC’s report has recognised there is now a likelihood of increasing energy costs and prices in future associated with an emerging need for new generation investment and prospective policies to address climate change risks.

Commenting on these potential developments, Dr Tamblyn said, “The competitive energy retail market should be able to accommodate such changes in real energy costs, provided retail prices are able to adjust in response, allowing competitive retail margins to be maintained.”

 Given the Commission’s finding that competition is effective, it is required to provide advice to the South Australian Government and Ministerial Council on Energy on options to phase out the current retail price regulation arrangements in South Australia.

For information contact:
AEMC Chairman, John Tamblyn 02 8296 7800
AEMC Communication, Prue Anderson 02 8296 7800 or 0404 821 935