Performance of the NSW Retail Energy Markets
IPART reviews the performance of the market each year to assess how competition is working under section 234A of the National Energy Retail Law (NSW).
IPART has released its Draft Report on the performance and competitiveness of the retail electricity and gas markets in NSW for the most recent financial year. This is our fourth annual monitoring report on the retail electricity market, but our first for retail gas market since gas prices were deregulated on 1 July 2017.
We have found that over the last year:
- On average, we estimate that electricity prices for residential and business customers increased by 0.2% in July 2018 compared to prices in June 2018. Gas prices for residential customers in the Jemena network increased by 0.2%, and prices for business customers increased by 1.6%. For the country gas networks, prices fell on average by around 2% for both residential and business customers.
- Around 19% of electricity and 14% of gas customers switched retailer, but 17% of electricity customers remain on relatively higher ‘standing offers’, and another 18% of customers are likely to be on market offers paying standing offer prices (because the benefit period has expired).
- Three new electricity and three new gas retailers entered the markets in the last 18 months, however, the pace at which small retailers has gained market share has been slow.
- The NSW Government has placed new obligations on retailers to help rebate customers move to lower market offers, and will shortly launch a new tool to make it easier for customers to find the best prices.
- Other measures to assist customers include the Energy Made Easy website has recently been upgraded, changes to the AER’s Retail Pricing Information Guidelines, and AEMC rule changes to require retailers to notify customers changes to prices and discounts in advance.
As part of this review, the NSW Minister for Energy and Utilities asked us to report on whether retailers are delivering acceptable levels of customer communication and service in their delivery of metering services.
We are considering stakeholder submissions before submitting our final report to the Minister by 30 November.