PIAC responded to the Independent Pricing and Regulatory Tribunal’s (IPART) draft report on the NSW electricity retail market for 2020-21 (the Draft Report).
IPART’s monitoring the NSW electricity retail market provides an important assessment of the outcomes the electricity retail market delivers for NSW consumers. However, IPART’s framing of market performance and consumer outcomes is problematic.
IPART’s Draft Report asserts that competition is inherently more efficient and intrinsically better at delivering service outcomes. This is outdated thinking and not supported by the experiences of consumers in the energy retail market that delivered price outcomes so ‘unjustifiable’ price regulation had to be reintroduced. We highlight measures of competition should be assessed on how they are contributing (or not contributing) to these outcomes. Outmoded market metrics such as number of retailers or offers and dispersion of prices are indicators of negative consumer experience and outcomes – confusion, pressure, poor choices, inefficiency, and excessive prices – rather than positive ones.
We stress IPART’s monitoring of the success of the retail electricity market must look at systemic outcomes for all consumers. It cannot rely on the potential for some consumers to get good outcomes, and should focus on those that are not.
