The report from the AEMC is the first of a series of assessments of competition in state retail markets agreed to by State and Federal Governments under the Amended Australian Energy Market Agreement (AEMA). The findings of the AEMC on the effectiveness of competition are meant to guide State Governments on whether there is any further need for retail price regulation or “caps”?.
The AEMC’s draft report has found that retail energy competition in the state of Victoria is highly effective and is leading to beneficial outcomes for households and businesses.
In the draft report the AEMC has reviewed the Victorian retail energy market on the basis of criteria such as customer switching, independent rivalry within the market, ability to enter the market, differentiated products, prices and profit margins.
“Most of the members of the ERAA operate across state borders and they can certainly vouch for the findings of the AEMC that competition is highly effective and indeed vigorous in Victoria,”? the ERAA’s Executive Director Cameron O’Reilly said.
“While it is only a draft report, we take heart from these initial findings of the AEMC which are in accordance with the commercial experience of retailers operating in Victoria, of which there are many.”?
The AEMC’s findings are also consistent with a recently released international study by First Data Utilities and their project partner, VaasaETT, which ranks retail energy markets on the basis of customer switching behaviour.
“Ultimately it is the vigorous competition for customers that has been confirmed by the AEMC’s report on Victoria, combined with transparent Community Service Obligations (CSO’s) for vulnerable customers that will lead to the best outcomes for Australian consumers,”? Mr O’Reilly said.