Default Retail Price for Electricity to apply from 1 July 2019  

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook

The Commonwealth Government has just directed that the Australian Energy Regulator (AER) begin work on developing a mechanism for introducing a default price for electricity.

What we know

The Commonwealth Government has asked that a default market offer and associated default market price be introduced for National Energy Customer Framework (NECF) jurisdictions, which means:

  • the default price will replace the standing offer price in NECF areas that currently do not have price regulation;
  • the price will be set by the AER on the basis of the costs incurred by the retailer as well as allowance for a reasonable margin.

The default price would come into effect on 1 July 2019 with publicly released by 30 April 2019.

In addition, the Commonwealth Government has requested that the AER begin work implementing:

  • A reference bill, based on benchmarks from which advertised discounts must be calculated (including win-back and retention offers), using the default price set by AER. This would apply to generally available offers marketed at both residential and small and medium enterprise (SME) customers.

Comment

The proposed default price will not apply in areas where there is currently price regulation, which covers ACT, regional Queensland and Tasmania.

The Commonwealth Government has also announced that, after introducing the default price changes, the Government intends updating consumer protections and abolishing  Standard Retail Contracts. It is not clear yet which of the protections current contained in Standard Retail Contracts will be carried through to default market offers.

It is unknown, whether and when a default market offer would be extended to Victoria. Note, however, that it was a recommendation of the ACCC Retail Pricing Inquiry that the Victorian regulatory framework be unified with the NECF.

For more information see https://www.aer.gov.au/system/files/Letter%20to%20the%20AER%20Chair%20-%20dafault%20pricing.pdf.

More to explorer

Technicians installing photovoltaic solar panels on roof of house.

Compliance Quarter’s Submission to the AER’s Review of the Compliance Procedures and Guidelines

On 11 April 2024, Compliance Quarter put forward its submission on proposed changes to the AER Compliance Procedures and Guidelines. The AER is reviewing its Compliance procedures and guidelines, which set out the manner and form in which energy businesses in jurisdictions that have adopted the National Energy Retail Law must submit compliance information and data to the AER. We argue that there should be consideration of measures to incentivise early reporting of potential breaches. These may, for example, take the

person wearing foo dog costume

Obligations of Energy Retailers Regarding Best Offer Information

Energy retailers in Victoria have specific obligations under the Energy Retail Code of Practice to provide clear information to customers about their ‘best offer’ – that is, the plan that would minimize the customer‘s energy costs based on their usage history. The objective is to ensure small customers can easily understand whether they are on the retailer‘s best plan for them and how to access the retailer‘s best offer if not. One of the significant challenges in the energy sector (as in banking and elsewhere) is that customers

low angle photo of sydney opera house australia

Guide to the National Energy Retail Rules

The National Energy Retail Rules (NERR) are a set of rules that govern the sale and supply of electricity and gas by retailers to consumers in Australia, alongside the related National Energy Retail Law (NERL). The NERR came into effect on 1 July 2012 in Tasmania, the Australian Capital Territory, and the Commonwealth. South Australia followed on 1 February 2013, New South Wales on 1 July 2013, and Queensland on 1 July 2015. The NERR do not yet apply in

2 Comments

    david lee

    30/05/2019

    I am interested in finding out more about the prices and how long does it last or do you renew it each year thank you

    Reply

      Connor James

      24/06/2019

      Hi David,Thank you for your comment, the prices will be set each year with the current determination running to 2020.Best Regards, Connor

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *