Changes deliver power to the people

The Queensland Government will introduce changes which will see better delivery of energy services and the best consumer protection laws for power customers.

Mines and Energy Minister Geoff Wilson said two new pieces of legislation were key elements of the State Government’s reforms of the energy market to meet the needs of Queenslanders in the 21^st century.

Mr Wilson announced the introduction of an open retail energy market – known as Full Retail Competition (FRC) - for electricity and gas from 1 July next year.

The Minister said the Electricity and Other Legislation Amendment (EOLA) Bill 2006 would amend the Electricity Act 1994 and the Gas Supply Act 2003, and, along with the Energy Ombudsman Bill 2006 would provide the “rules of the game” for the introduction of FRC.

“Allowing private companies to compete to sell electricity and gas into our homes and small businesses is a win for Queenslanders,” Mr Wilson said.

“Small consumers can have confidence in entering the electricity and gas markets because the legislation provides consumer protection as well.

“But the State Government is making it a win-win because the legislation provides industry with clear and fair regulatory arrangements.

“These two pieces of legislation are about delivering power to the people,” Mr Wilson said.

Mr Wilson said the Energy Ombudsman Bill would establish an independent Office of Energy Ombudsman which would provide a cost-effective dispute resolution and mediation services for domestic and small business electricity and gas consumers who had not been able to resolve a dispute with their energy supplier.

“The services of the Energy Ombudsman will be targeted towards the ‘mum and dad’ customers who are the least able to afford legal assistance to help resolve a dispute with their energy provider,” he said.

“With more retailers in the market, consumers will have the added protection of an Energy Ombudsman not only to handle disputes between consumers and retailers, but also to spell out their rights and responsibilities.”

The functions of the existing Energy Consumer Protection Office (ECPO) will be subsumed into the Energy Ombudsman office.

Mr Wilson said the EOLA Bill will give customers confidence in the new market arrangements. Customers can choose to stay on the State Government uniform tariff or move to the market after 1 July next year.

If a customer chooses to move to the market, the Bill also provides the option for residential and small business customers to revert to the uniform tariff once their contract with an energy retailer comes to an end.

“This will encourage competition, as customers will be more inclined to take up market contracts from private companies after 1 July if they know they can revert to their previous uniform tariff,” Mr Wilson said.

“Retailers looking to enter the Queensland market and consumer groups have been consulted on these arrangements. The Government has come up with arrangements that work for both consumers and industry players. It is a win-win.

“The Bill also provides for a new Electricity Industry Code regulating the marketing behaviour of retailers and setting minimum terms and conditions for standard retail contracts, further strengthening consumer protection.”

Mr Wilson said the Bill provided a number of other key changes, including:

• Enabling customers to choose their electricity retailer, making it easier to access services that suit their needs
• A 10-day cooling-off period on market contracts, which starts on the same day as FRC even if the contract is signed earlier
• Changing the way the uniform tariff is calculated by using an independent third party – the Queensland Competition Authority – which will lead to greater transparency for industry and consumers
• Deregulation of gas retail prices, but with the Minister retaining the ability to set prices if competition in the market is not effective
• Establishment of a Gas Retail Market Operator to manage the transition and operations of Queensland’s gas market under FRC. VENCorp - the Victorian market operator - has been appointed to this role in Queensland
• The ability for retailers to offer both electricity and gas supply to customers on a single bill, encouraging product innovation and better value for customers.

Mr Wilson said the changes would ensure customers could have confidence in the market which is the key to success of full retail competition.

“Queensland has one of the lowest average wholesale electricity prices in the National Electricity Market, and we expect these economic benefits to flow through to the state’s domestic and small business customers with the establishment of a more competitive retail market.

“FRC is good news for Queensland because it will deliver competitive and innovative energy services, continue to attract investment in Queensland’s energy sector and help reduce our impact on the global climate by growing the gas market,” Mr Wilson said.

Media Inquiries: Ellen McIntyre 3225 1819