The AEMC today called for community feedback on a directions paper released today by its review, Power of choice - giving consumers options in the way they use electricity.

The Power of choice review is looking to facilitate a more cost-effective power supply by increasing opportunities for demand side participation.

Demand side participation is when households and businesses are able to make choices about how they use electricity - such as shifting to off-peak use, installing more efficient appliances or using locally based generation.

AEMC Chairman, John Pierce, said the review’s directions paper identified opportunities where current arrangements could be improved to better facilitate consumers’ choices regarding how they use electricity and participate in the market.

“We are seeking comment and practical experience from the community to assist us in development of recommendations to facilitate demand side participation in the market”.

“Our overall objective is to ensure that community demand for energy services is met by the lowest cost combination of electricity supply and demand.” Consumers are increasingly interested in ways to manage their electricity bills. While there is evidence of increased uptake of demand side participation in the electricity market over recent years, more development is required before it is adopted on a significant and reliable scale,” Mr Pierce said.

Industry has estimated that around $11 billion of electricity infrastructure is used for only 100 hours a year. But it must be in place to meet demand when everyone switches on at the hottest and coldest times of year.

Peak demand has grown at almost three times the rate of average demand. Information, education, technology and incentives can all contribute to allowing customers a greater range of options in how they use electricity.

Opportunities raised by the directions paper for public comment are:

  • supporting consumer participation – through better access to information and enabling customers to capture the full value of technology;
  • better incentives in the market – to facilitate consumer choice on how to use electricity and maximise the value of their demand. This includes promoting appropriate commercial incentives for companies across the supply chain to deliver demand side options;
  • understanding the role of electricity prices – currently most consumers are not charged a price which fully reflects the varying costs of supply. We will look at the role of cost reflective prices in encouraging demand side participation and what is needed for the market to offer such choice for consumers. We will also look at the impacts of time-sensitive prices on different types of households and consider additional protection required for vulnerable customers.

The directions paper has been informed by stakeholder views raised in meetings with the AEMC, submissions to the Power of choice issues paper, advice from the stakeholder reference group and the findings of commissioned consultants’ reports.

Submissions to the directions paper are due by 4 May 2012.

The release of the directions papers will be followed by a public forum on the 19 April 2012 and further consideration by the stakeholder reference group before the review’s draft report is released in June 2012.

AEMC Chairman, John Pierce (02) 8296 7800

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