We appreciate the opportunity to comment on the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019 (Code).

High prices for electricity are causing significant and ongoing detriment for households and small businesses. In the latest Energy Consumer Sentiment Survey (ECSS), households and small businesses ranked electricity behind banking, insurance and mobile phone services on value for money, and less than half indicated that they have the information and tools they need to make choices about energy services. Importantly, only a third of respondents indicate that they believe the market is working in their interests. ^[1]https://energyconsumersaustralia.com.au/news/only-1-in-4-say-their-homes-are-energy-efficient/

The measures outlined in the Code aim to address confusing discounting practices and the growing price gap between competitive market offers and standing offers that are key features of a market that is not working for consumers. Standing offers are meant to provide a safety-net for consumers but are instead acting as a source to cross-subsidise competitive market activity. ^[2]We note that there is also a sizeable cohort of consumers who are technically on market offers with expired fixed benefits periods, most of these consumers are being charged standing offer prices … Continue reading In this submission we raise several design and implementation matters relevant to the development of the code. We are engaging separately with the AER on the development of the methodologies for the DMO and reference pricing initiatives. It is critical that the design and implementation of these mechanisms helps reset the market and makes competition work for consumers.

Experience in other jurisdictions, notably and recently in the United Kingdom where a price cap has been raised, has shown that interventions in the retail market need to be accompanied by downward pressure on underlying wholesale, network, environmental costs to deliver cheaper prices overall for consumers. A coordinated process to refine and implement the Australian Competition and Consumer Commission (ACCC) Retail Electricity Pricing Inquiry Blueprint to secure the 20-25 per cent bill savings consumers have been promised, should be the highest priority for governments and market bodies.

We note that there is also a sizeable cohort of consumers who are technically on market offers with expired fixed benefits periods, most of these consumers are being charged standing offer prices while technically on a market contract.

The full submission can be read here.