Prices, profits and priorities

This submission responds to the Australian Energy Market Commission’s (AEMC) approach paper for the third annual review of energy retail competition in National Electricity Market (NEM) states and territories. PIAC takes the view that the ultimate promise of the competitive market is that it will lead to lower prices for consumers. Price is the main concern for most households and it is certainly one of the most pressing concerns for the vulnerable consumers who the AEMC has decided to focus on in its 2016 review. In this vein, PIAC makes three main recommendations to the AEMC; to examine whether the competitive market has resulted in reduced electricity prices, in real or nominal terms, in any areas of the NEM; to examine retailer costs and profit margins, to determine whether the market is working to minimise retail costs and deliver competitive prices for residential consumers; and to have regard to the research produced by the St Vincent de Paul Society’s Energy Tariff Tracking Project as part of its review of the effectiveness of competition.