04 September 2014
The fourth meeting of the optional firm access design and testing working group was held on 25 August 2014. The agenda and a short summary of the meeting are available on the project page.
22 August 2014
ENERGY CONSUMERS SAVING MONEY BY SHOPPING AROUND
The first national review of competition in retail electricity and gas markets has found people are saving money on their energy bills, but more can be done to make it even easier for consumers to shop and save.
The Australian Energy Market Commission (AEMC) today released its report on competition in retail electricity and gas markets for small customers in the National Electricity Market (NEM), along with new research on consumer experiences.
The level of competition ranges from effective in South East Queensland, New South Wales, Victoria, and South Australia, to less effective in the Australian Capital Territory and is yet to emerge in Tasmania and regional Queensland.
Competition in retail gas markets is at different stages of development between and within states and territories.
AEMC Chairman, John Pierce, said the review survey found 90 per cent of all consumers were aware they could choose their energy company, up to 40 per cent had actively investigated options, and up to 28 per cent had actually switched during 2013.
“Consumers are shopping around for better deals for electricity and gas more often than they are switching insurance companies, or phone and internet providers,” Mr Pierce said.
“New retailers are entering markets and winning customers with discounts and other incentives, with conservative estimates of savings ranging from $60 to $240 or more a year, depending on where they live and how much electricity they use,” Mr Pierce said.
“Previous AEMC research has found that consumers who shopped around in 2012-2013 were able to save around 5-16%.”
The review has involved extensive consumer research, stakeholder consultation and the analysis of data from the Australian Energy Regulator, ombudsmen in each jurisdiction, the Australian Energy Market Operator, regulators and retailers to develop a picture of energy competition in each jurisdiction.
The research found that many customers will shop around for a better deal if they believe the savings will justify the time and effort involved.
“The biggest barriers to consumers confidently shopping around and saving money is a lack of clear information,” Mr Pierce said.
To overcome these barriers, the AEMC has recommended:
The AEMC has considered competition in South East Queensland in light of the Queensland Government’s plan to remove retail price regulation on 1 July 2015. This plan is subject to a number of criteria being met, including that competition is effective.
Mr Pierce said that conditions in the South East Queensland electricity market are right for the removal of price regulation, with increased competition set to benefit customers when that occurs.
The review details the state of competition in each state and territory in the NEM, including the structural, regulatory and market characteristics that impact the level of competition in each jurisdiction.
It is the first review under a revised approach agreed by the Council of Australian Governments, for the AEMC to assess competition in NEM jurisdictions each year. These reviews support the commitment made by jurisdictions in 2004 under the Australian Energy Market Agreement to deregulate retail energy prices where effective competition can be demonstrated.
21 August 2014
On Thursday 14 August 2014, the AEMC held a forum in Sydney on the First Interim Report for the Optional Firm Access, Design and Testing Review. Materials supporting stakeholder presentations are now available on our website.
Public Forum presentations - First Interim Report for the Optional Firm Access, Design and Testing.
14 August 2014
FINANCIAL STABILITY PROPOSALS FOR THE NATIONAL ELECTRICITY MARKET
The Australian Energy Market Commission has called for submissions on draft recommendations to improve market responses to the financial distress of a major participant. They are focussed on making sure electricity consumers continue to be supplied their electricity.
The AEMC’s National Electricity Market (NEM) Financial Resilience Review today released its second interim report for public comment.
The AEMC’s report presents a forward-looking, proactive response to the COAG Energy Council’s request for us to assess the electricity market’s ability to manage flow-on effects to energy businesses and consumers in the event of large retail company’s financial failure.
AEMC Chairman, John Pierce, said while the electricity market is working well, it could be better prepared to manage the consequences of a financial failure.
“This is all about being prepared in case a major energy company gets into financial distress. We’re not saying that it is likely to happen, but it may be possible - so our goal is to minimise disruption to customers in the event that does occur.
“Consumer choices and market dynamics are evolving and the energy market of tomorrow will be very different from today,” Mr Pierce said.
“Consumers and investors need to have confidence that the market has the right mechanisms to manage change and function well into the future.
“It makes sense to be prepared. Now is the time to plan and put in place arrangements so that the market can withstand future challenges in ways which will not impose long-term costs on consumers.
“Our 2nd interim report recommends market arrangements so customers can continue to be supplied as part of the response to the failure of a major electricity market participant and while the stability of the market is maintained.
“This review is part of our long-term reform program to work on strong market foundations so the power system can adjust efficiently to whatever comes” Mr Pierce said.
Key points
- making government the single decision maker to respond to a major failure;
- establishing arrangements for the Chair of the COAG Energy Council to decide the level of interventions required and focus action on the specific circumstances of any future failures;
- establishing a NEM resilience council market bodies (AEMC, AER, AEMO, ASIC) to advise the government on appropriate responses;
- expanding the range of solutions that could be used to address the flow on effects of a large participant failure;
- making improvements to the current Retailer of Last Resort (ROLR) scheme so that it can operate in a broader set out circumstances without making worse the risks to financial system stability.
Next steps
For information contact:
AEMC Chairman, John Pierce (02) 8296 7800
Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817
14 August 2014
About the AEMC
AEMC is the independent body responsible since 2005 for providing policy advice to Australian governments on the electricity and gas sector. Its role is separate from the Australian Energy Regulator, which regulates the energy sector.
04 August 2014
The AEMC will hold a public forum on the First Interim Report of its Optional Firm Access, Design and Testing review on 14 August 2014 between 10.00am and 3.30pm at:
Mercure Sydney Hotel, 818-820 George Street, Haymarket, NSW, 2000
A draft agenda for the forum can be found here.
The aim of the forum is to inform stakeholders of our work to date, seek feedback and aid stakeholders in developing their submissions to the report.
Those interested in attending the forum may register here.
For more information, including the First Interim Report and associated Information Sheet, please visit the project page for this review.
24 July 2014
The AEMC has published a First Interim Report for public consultation in relation to its Optional Firm Access, Design and Testing review. This represents a progress update on the work we have done since receiving the Terms of Reference.
Stakeholders are invited to provide submissions on the First Interim Report by no later than Thursday, 4 September 2014.
The AEMC will hold a public forum on the First Interim Report on 14 August 2014 in Sydney. The aim of the forum is to inform stakeholders of our work to date, seek feedback and aid stakeholders in developing their submissions to the report.
Those interested in attending the forum may register here.
For more information, including the First Interim Report and associated Information Sheet, please visit the project page for this review.
17 July 2014
The second meeting of the optional firm access design and testing advisory panel was held on 30 June 2014. The agenda and a short summary of the meeting are available on the project page.
17 July 2014
On 14 August 2014, the Commission will hold a public forum in Sydney on the First Interim Report of the Optional Firm Access, Design and Testing review.
The aim of the forum is to inform stakeholders of our work to date, seek feedback and aid stakeholders in developing their submissions to the report.
Those interested in attending the forum may register here.
Information relating to the venue and timing of the session will be confirmed shortly.
16 July 2014
On 16 July 2014, the Reliability Panel (Panel) published its final report for the reliability standard and reliability settings review 2014. The final report contains the Panel’s decision on the reliability standard, and recommendations on the reliability settings (that is, the market price cap, cumulative price threshold and market floor price), that are to apply for the National Electricity Market from 1 July 2016.
03 July 2014
The third meeting of the optional firm access design and testing working group was held on 11 June 2014. The agenda and a short summary of the meeting are available on the project page.