Review of retail competition in NSW - Draft Report

Today the AEMC called for public submissions on its draft report on the effectiveness of competition for small electricity and natural gas customers in NSW.

We have found that competition in NSW retail energy markets is delivering discounts and other benefits to small customers with more than 60 per cent already on market contracts.

Customers have a choice of retailer and a choice of product or service, and many are taking advantage of the choices they have.

However, more can be done to make it easier for customers to engage with the market.

AEMC Chairman, John Pierce, said the Commission would consult with customers, their representatives and other stakeholders before final recommendations are provided to the State Government in September.

“We’ll be looking at new ways to make it easier for customers to engage in the market.

“We will also seek to build on the findings of our Power of Choice review which showed that residential customers may make savings in the short term if they choose to change their retail price offers.”

“Ultimately, customers are in the best position to decide what works for them.

“The next stage of this review will focus on what measures may be necessary in NSW to give customers the information, choices and protection they need to engage in this market and enhance the competition that is already present,” Mr Pierce said.

Draft report key points

  • Promoting customer choice

- Customers should have tools and knowledge to better understand the market and how to compare offers. Targeted communication channels will need to evolve with the market and the review is seeking views on the best ways to achieve this.

- In our draft report we recommend that price caps be removed to encourage greater innovation and lead to more tailored energy products and services being available for customers.

  • Maintaining customer protections

- In our draft report we recommend ongoing market monitoring of the state of competition. This should be accompanied by the ability to reintroduce price caps if competition is no longer effective in the future.

- The National Energy Customer Framework (NECF), which the NSW government aims to adopt on 1 July 2013, provides additional protections for customers who will continue to benefit from regulation on some terms and conditions of retailers’ offers such as late fees and early termination fees.

Next steps

We will provide our final advice to the NSW Government by 30 September 2013.

Submissions on our draft report are due on 5 July 2013.

For information contact:

AEMC Chairman, John Pierce (02) 8296 7800

Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817

23 May 2013