Energy retailers on notice with AEMC’s pricing review

Woman holds cup of tea while looking at smart energy meter (habits)
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The Australian Energy Market Commission (AEMC) has announced a pricing review that will commence in parallel with its work on tariffs linked to the accelerated smart meter rollout.

AEMC chair Anna Collyer announced the review on Wednesday, signalling a shake-up of electricity pricing rules amid concerns about complex tariffs their effect on customers.

Related article: AEMC draft rule to accelerate smart meter rollout

Collyer acknowledged concerns about the nature of electricity tariff reforms, saying the pricing review would examine whether power charges were appropriate.

“We will be extremely mindful of how any changes we make in the context of the smart meter rule change will need to transition to a future world we are still considering,” Collyer said.

“That rule change needs to ensure we maintain the social licence to undertake the accelerated smart meter rollout, because any future tariff design will depend on customers having the data that smart meters provide.

“The traditional thinking around tariff reform is sound: we want to reduce the peak demand because we have to build our infrastructure to the peak. So, if we can reduce the peak, we can have less infrastructure and lower costs for all.

“One way to do that is that is if people can change how much energy they use during the peak, and the traditional way to prompt customers to do that is to make their energy more expensive then, and less expensive at other times.

Related articled: Clean Energy Council requests rule change from AEMC

“But, is that traditional thinking working now? Are the signals actually getting through that tariff maze, and all the way to customers? What’s the role of retailers in all of this? Will it work at all once we have half the customers with solar panels and batteries, and half without? And—importantly—what is it that the customer really wants?”

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