An enquiry into the national electricity market by the Australian Competition and Consumer Commission (ACCC) has found it to be in urgent need of reform.
In its report Restoring electricity affordability and Australia’s competitive advantage, the ACCC makes 56 recommendations which it says “detail ways to fix the National Electricity Market”.
“The National Electricity Market is largely broken and needs to be reset,” the Chair of the ACCC, Rod Sims said.
“There are many reasons Australia has the electricity affordability issues we are now facing.”
He said the wholesale and retail markets were too concentrated with regulation and poorly designed policies adding significant costs to electricity bills and the marketing of discounts by retailers was inconsistent and confusing to consumers.
“It is clear that most households are paying far too much for electricity,” Mr Sims said.
He said the ACCC estimated that if its recommendations were adopted the average household would save between 20 and 25 per cent on their electricity bill, around $290 to $415 a year.
“Further, Australia’s 2.2 million small to medium businesses could save an average of 24 per cent on their electricity bill.”
Mr Sims said three important points needed to be made.
“First, our recommendations require some difficult decisions as sound economic reform usually does.
“Second, despite poor decisions over at least the past decade creating the current electricity affordability problem, it now falls to current Commonwealth and State Governments to make the difficult decisions to fix it.
“Third, we must move away from narrowly focussed debates; addressing affordability requires change across a broad front.”
The ACCC report was accepted by the Treasurer, Scott Morrison who said the energy market was complex
“The recommendations require and deserve thorough consideration,” Mr Morrison said.
“We will consider the recommendations in detail.”
The ACCC’s 369-page report can be accessed at this PS News link and a 23-page Executive Summary at this link.
