End of electricity price regulation to improve competition

Removal of electricity price regulation in south-east Queensland by 1 July 2015 and the introduction of price monitoring are further reforms to the electricity sector designed to improve competition and reduce pressures on prices.

Queensland Energy Minister Mark McArdle said the reforms, subject to satisfactory consumer protection and engagement, should increase competition with better outcomes for customers in terms of choice, efficiency and customer service.

Mr McArdle said the final details for introduction of price monitoring will be part of the Government’s 30 year strategy. Once the pre-conditions are met the Government’s role will shift to monitoring prices set by retailers.

“The current role of the Queensland Competition Authority (QCA) in setting prices will be retained for the Ergon area while the Government finalises a strategy for introducing competition into regional Queensland,” Mr McArdle said.

“Customers in the Ergon area benefit from more than $600million in price support through the Uniform Tariff Policy and further work is required before full retail competition can be introduced to regional Queensland.”

The QCA would be asked to oversight price monitoring and examine price packages put together by retailers.

“This system is currently used in Victoria and South Australia and allows consumers to compare prices and shop around,” Mr McArdle said.

“This model encourages electricity retailers to offer the best price because they are aware that customers can compare prices and change if they can find a better offer.  Price regulation has not kept prices down.  Removing it will drive more competition and more offers for customers.”

Mr McArdle said price monitoring combined with other electricity sector reforms being undertaken by the Government should start to make a difference on electricity prices.

“While there is no overnight solution to deliver benefits to customers, improving competition by removing regulation that does not work is an important issue within the government’s control.”

 [ENDS] 17 June 2013

Media Contact: Natalie Wynne 0437 334 183