State Government move to deregulate electricity
Tuesday, 8th April, 2014
By Nick Gibbs
The State Government’s decision to move toward a deregulated electricity market has sparked conflicting responses and left customers guessing as to how their household bills will be affected.
Nationals MP John Williams said the decision was encouraged by evidence given to the NSW Public Accounts Committee as part of the Inquiry into the Economics of Energy Generation.
“Every single person that gave evidence to that committee said we needed deregulation,” Mr Williams said.
He said now electricity prices are set by IPART (Independent Pricing and Regulatory Tribunal) and relate directly to the cost of supply.
IPART would continue to monitor the electricity market as a pricing watchdog under the new scheme, Mr Williams said.
He also said he was hopeful that the free market would result in a reduction in electricity bills.
“Deregulation will allow retailers to be more flexible with their pricing.
“We’re not doing it for any other reason than to help consumers.”
However, according to Electrical Trades Union secretary Steve Butler, deregulation will remove the “safety net” installed when the retail energy market was privatised.
“When the electricity retailers were privatised in NSW, a regulated electricity market was put in place to provide a safety net for all electricity consumers by putting a lid on price rises,” he said.
“Today’s announcement was not pushed for by electricity customers; rather, it is the big electricity providers that have been lobbying the NSW Governments to remove this safety net so they can start charging what they like.”
But Chief Executive of the Energy Retailers Association, Cameron O’Reilly, said the decision was “a big win for consumers”.
He said that under the plan, price monitoring would replace regulation on July 1.
“Victoria and South Australia have already proven retail electricity price deregulation can be effective.
“Since Victoria moved to price deregulation in 2009 - and South Australia in February last year - households have already seen new products and more choice,” he said.
“As New South Wales moves to deregulate energy prices, customers will see an increased range of offers which will make sure that active customers are better off.”
For more on price control turn to Page 8