Eastern States – electricity retail market monitoring

IPART – Independent Regulatory and Pricing Tribunal of New South Wales

Oct 27
Eastern States – electricity retail market monitoring

Two East Coast regulators are currently investigating their state’s electricity retail markets, these are summarised individually below.

Independent Pricing and Regulatory Tribunal (IPART) – NSW

Following deregulation in 2014, IPART monitors and reports annually on the competitiveness of the electricity retail market, particularly for small-use customers.  IPART published its draft report in July 2016 which found that competition is working well, as evidenced by:

  • product and service innovation (e.g. availability of solar PV and battery packages, the bundling of energy and other products and the option to pre-purchase electricity at predetermined rates);
  • price discounting; and
  • new retailers continuing to enter the market.

Submissions on the draft report closed on 27 October 2016 and IPART will deliver its final report to the Minister in November 2016.

IPART also commissioned Frontier Economics (FE) to investigate the drivers behind retail tariff increases announced on 1 July 2016.  In its report, FE suggested that the main increases in expected price increases between 15/16 and 16/17 were:

  • increasing electricity wholesale spot and contract prices reflecting (i) a return to growth in electricity demand, (ii) the recent retirement of older generation plant such that generation plant with higher marginal costs set the market clearing price and (iii) increased gas prices; and
  • an increased cost of complying with green schemes following increases in the price of large scale generation certificates (LGCs), with demand (and hence costs) driven up by businesses short of LGCs buying them at the spot price.

Queensland Competition Authority – QLD

On 14 October 2016, QCA published its scoping paper on the monitoring of the electricity retail market in 2016/17, following deregulation of the retail electricity market for residential and small-use business customers on 1 July 2016.   The paper outlines the information to be collected over the coming 12 months from retailers and poses a number of ‘consultation questions’.  In summary the report covers:

  • retailers’ standing offers, market offers, discounts available, fees charged and any emergent trends in retail offers;
  • the numbers and characteristics of customers moving from standing offers to market offers, such as location, consumption, if they are on a hardship scheme and if they have an electricity debt;
  • for those customers on retailer hardship schemes or in receipt of a concession, how many of these are on standing and market offers and the resultant retail prices they are paying;
  • any new tariff structures and plans than emerge which QCA will analyse; and
  • the impacts of the derogation to the National Customer Energy Framework included for QLD for the first year of deregulation.

Any submissions on the scoping paper are to be returned by 30 November 2016 and the final report will be published on 31 October 2017.