A series of major reforms over the past 25 years have established sophisticated energy markets in Australia that are delivering benefits for consumers across Australia.
Spotlight on competition
The COAG Energy Council (the Council) has put in place annual reviews of energy retail competition as well as price trends, both of which help monitor market development and identify areas for further review and analysis.
Market reviews and advice can be found on the Australian Energy Market Commission’s (AEMC’s) website.
Consumer choices driving market change
At the Council’s directive, the AEMC has been working for several years on a series of reforms to make it easier for customers to engage in the energy market, as set out in the AEMC's Power of Choice review.
Above all, AEMC’s rules and reviews work to protect consumers, especially the most vulnerable, as the system changes. New rules and reviews to protect consumers and help energy shoppers get more engaged and better informed can be found on the AEMC website.
The network reform program developed over the past three years has been extensive. By July 2017 the prices people pay will reflect the different ways they use electricity and the costs of providing it to them.
The Australian Energy Regulator (AER) is implementing new network rules (made in 2012) which affect the costs which make up to 50% of people’s bills. Prices are starting to fall following AER determinations which take into account business efficiency benchmarks. The AER is also now required to release comparative reports on network business performance.
The way we pay for power is changing to keep pace with modern lifestyles. When prices reflect how much it costs to use different appliances at different times, consumers will be able to make more informed decisions in the face of changing energy products and services and increasingly competitive energy deals.
New cost-reflective network rules (made in 2014) mean consumers who reduce demand at peak times could save money and help reduce the need for further network investment – reducing costs for everyone over time.
Metering and consumer information
One of the Council’s most important reform elements has been the implementation of the National Energy Customer Framework (NECF). The NECF includes the National Energy Retail Law and the National Energy Retail Rules which have increased protections for consumers.
Rapid advancements in technology have enabled widespread adoption of distributed (local) generation; smart metering; connected home appliances and services; and emerging off-grid game-changers like storage.
The boundaries between what needs to be subject to economic regulation and where competition is working to benefit consumers are being redrawn as consumers use better information and comparison shopping to participate confidently in the transforming energy market.