Regulating ACT electricity prices is a missed opportunity

5 September 2011

Regulating ACT’s electricity prices is a missed opportunity: esaa

The ACT Government’s decision to maintain electricity price regulation is a missed opportunity for overdue reform and one that will ultimately hurt consumers, according to the Energy Supply Association of Australia.

esaa Interim CEO Clare Savage said Australia’s independent energy expert, the Australian Energy Market Commission, reviewed the ACT market and recommended removing price controls as part of a package of reforms to empower customers and making it easier for retailers to enter the ACT market to offer choices to consumers.

With Australia’s electricity prices rising, Ms Savage said the best way to ensure lowest possible prices while allowing energy supply businesses to remain viable, is to promote competition.

“Governments using price regulation to try to protect consumers prevent competition and inevitably hurt consumers,” Ms Savage said.

“The message from the AEMC’s review was unmistakeable – price regulation is a direct barrier to competition.

“The AEMC’s recommendation was that removing regulated prices and replacing them with a monitoring program would deliver increased competitive pressure in the ACT market.

“Two years ago Victoria followed similar advice from the AEMC and now has one of the most competitive retail electricity markets in the world,” Ms Savage said.

While there are 14 retailers actively competing to supply power to Victorian households, the AEMC found there is only one business actively marketing to ACT residential customers.

“Given the ACT’s role in significant energy market reforms in the past, the Government’s decision is particularly disappointing,” Ms Savage said.

“In 2006, the ACT energy regulator, the Independent Competition and Consumer Commission, recommended price deregulation.

“The Government failed to act then and it appears with today’s announcement retaining price regulation for another two years, another opportunity to show national leadership on energy market reform has been missed,” she said.

Ends.

Media contact:            Caroline Page          0421 103 089

The Energy Supply Association of Australia seeks to positively influence government policy decisions to ensure that Australia enjoys the benefits of a safe, secure, reliable, sustainable and competitively priced electricity and natural gas supply.

esaa’s 40-plus member businesses have more than $120 billion in assets and infrastructure investment plans worth over $49 billion over the next five years. The Association is fuel and technology neutral and member businesses have investments across a wide range of fossil fuel and renewable generation technologies.