PIAC provided a response to the AEMC’s Review into the Arrangement for Failed Retailers’ Electricity and Gas Contracts (the Review) Directions Paper (the Paper).
It is PIAC’s position that consumer outcomes must be the key consideration when reviewing the Retailer of Last Resort (RoLR) scheme. We expressed concerns that the Paper is predominantly focused on mitigating risks for the designated retailer/s of last resort, and assumes retailer protections are a proxy for consumer protections. While retailer protections are an important component of consumer protections, we recommended that a more outcome focussed objective has scope to consider a wider range of (potentially more effective) measures to protect consumers in the event of retail failures.
We continued to advocate for a government owned retailer of last resort as an effective solution to RoLR event concerns including cascading failures, customer benefit-sharing and unreasonable competitive advantage.
The remainder of our submission responded to more specific consultation questions from the AEMC including what an appropriate cost-recovery framework is for a RoLR event, whether failed retailers should be billed for the cost of their failure and sharing benefits with customers.
Finally, we continued to highlight that existing frameworks and mechanisms do not sufficiently mitigate consumer harms in volatile market conditions, including those leading to RoLR events, as most of these mechanisms place the onus on the consumer to mitigate harm.
