One other headline report released in the past couple weeks that I’d like to find some time to review in detail is the ACCC’s November 2022 Report ‘Inquiry into the National Electricity Market’ – the report (dated 23rd November 2022) was not actually released until Thursday 8th December (i.e. last week), presumably because it was being approved somewhere (by the Federal Government?):
Accompanying the release of this report was the Media Release on 8th December titled ‘Electricity retailers under pressure as contract markets tighten and prices rise further’. This stated that:
‘Since May this year, six electricity retailers have formally exited the market and others have either urged their customers to switch retailers or are no longer seeking new customers.
“In the current environment of elevated wholesale electricity prices, it’s critical that energy retailers have continued access to hedging contracts,” ACCC Commissioner Anna Brakey said.
“We understand that much higher energy prices are already hurting Australian households. We’re drawing attention to the challenges facing smaller retailers, because we know if we lose retail competition everyone will pay more for electricity over the long term.”
“Well-functioning, competitive markets are also going to be critical to delivering the necessary investment for a renewables-based grid,” Ms Brakey said.’
… and continues:
‘The ACCC’s report makes five recommendations to address the impact of current market conditions on competition in wholesale contract and retail markets for electricity.
These include regular monitoring of contract markets to provide crucial insights into the strength of both electricity generators and retailers. As retailers’ hedging costs have increased significantly this year, the ACCC also believes that regulated retail prices (default offers) need to accurately reflect retailers’ actual operating costs. To achieve this, the Australian Energy Regulator should have the flexibility to adjust the default offer in the event of unforeseen circumstances outside of the annual price setting decision.
The ACCC has also recommended a mandatory industry code of conduct for third-party energy price comparison sites that requires them to operate in the best interests of consumers.’
As explained at this summary page on the ACCC website, this report is the eighth report in its series – inquiring into the prices, profits and margins in the supply of electricity in the National Electricity Market (NEM).