Re-regulating energy prices will not fix the concerns of Australian households and businesses, and could actually make things worse by killing innovation and reducing the benefits of competition, according to an independent Government report released today.
The Australian Energy Market Commission’s (AEMC) annual review of retail energy competition has revealed growing dissatisfaction from consumers resulting from rising energy bills and confusion over discounting and how energy is sold to consumers.
Australian Energy Council General Manager, Corporate Affairs, Sarah McNamara, said the sobering review was a sharp reminder to the industry of the changes needed to re-gain the trust of consumers.
“We know energy bills have increased sharply as a result of tight supply in both gas and electricity markets,” Ms McNamara said, “The AEMC report sends a clear message that customers want greater transparency and simplicity in how energy is sold. And, fundamentally, they would like to see price relief as soon as possible.
“Importantly, the AEMC warns that re-regulating energy prices is not warranted. Re-regulation would hit the smallest, most disruptive and most innovative retailers hardest. This would reduce competition and innovation for consumers.
“The Victorian Government is currently considering introducing a Basic Service Offer which would effectively re-regulate prices in Victoria. The AEMC report confirms this would do more harm than good.
“It’s clear energy retailers need to do more to accelerate innovation and improve the way we market energy to customers, whilst supporting all measures to bring down the cost of energy supply. It’s a market that needs to evolve faster to ensure customers are getting the full benefits of competition.”
About the Australian Energy Council
The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
The Australian Energy Council has welcomed the release of the Energy Security Board's options paper,which is the result of a substantial consultation process.
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