We have received requests for clarification following an article published in Fairfax newspapers on Saturday 2 August 2014 in relation to the draft determination for the rule request on Retailer Price Variations in Market Retail Contracts.

The article created a misleading impression and a letter to the editor was sent to Fairfax newspapers to clarify the details of the draft rule which is now available for public consultation. Submissions on the draft determination close on 11 September 2014.

The letter is published below:


Dear Sir

Saturday's article ("All power to energy companies on pricing" 2-3 August SMH, The Age, Canberra Times, Illawarra Mercury) misrepresents the facts.

The AEMC’s proposal for new rules on energy price information has nothing to do with whether utilities should be forced to comply with contracts.

To assert it does, as your article did, is incorrect.  Contracts are enforceable by law. Consumers can take action against energy companies who breach their contracts.

We are considering a request from two consumer groups that seeks to prohibit retailers from offering contracts that allow them to change their prices when the energy offer is for a defined period of time.

Our consumer research shows people want a range of contract and price options to meet their needs – with both fixed and variable prices to choose from. Almost half of residential and small business customers say they prefer the type of contract this request would have stopped retailers from offering.

Our draft rule clarifies the way energy retailers must tell consumers if prices can change during the term of their retail contracts; and provide details on when they will notify customers of any price changes. Clear information will help consumers shop more confidently for their electricity and gas.

John Pierce

AEMC Chairman