The Turnbull Government has directed the Australian Competition and Consumer Commission (ACCC) to review retail electricity prices and “scrutinise electricity retailer behaviour”.
Energy Minister Josh Frydenberg and Treasurer Scott Morrisson announced the review in a joint statement this morning.
“Competition in retail electricity markets should mean lower prices for residential and business consumers,” the statement said.
“However, retail electricity markets don’t appear to be operating as effectively as they could.
“A better deal in electricity is vital to keeping the lights on, delivering cheaper prices to families and businesses and sustaining jobs, particularly the thousands of jobs in our energy intensive industries.”
In undertaking the inquiry, the ACCC will work with energy agencies such as the Australian Energy Regulator and the Australian Energy Markets Commission.
“Electricity prices have nearly doubled on top of inflation in most parts of Australia over the last decade based on a variety of different factors. It will be important to understand and examine these different factors in each state and territory,” ACCC chairman Rod Sims said.
“The ACCC is also keen to look at the structure of the retail industry, the nature of competition, the representation of prices to consumers and other factors influencing the price paid by Australians for electricity.
“We enter this inquiry with an open mind and look forward to developing recommendations which can make a difference for Australian households and businesses.”
Australian Energy Council chief executive Matthew Warren welcomed the inquiry and said it would “bust the myth that competitive retail electricity markets are the problem”.
“We don’t need an inquiry to tell the Federal Government why electricity prices are increasing,” Mr Warren said.
“They are increasing because we are running out of electricity.
“We are running out of electricity because for the past decade we haven’t had clear, consistent national energy and climate policy.
“Focusing on the operation of the retail electricity market won’t improve energy security nor will it bring down the rising cost of electricity.”
The ACCC is expected to produce a preliminary report by the end of September 2017, with a final report due in June 2018.