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Submission to the AEMC on the Market Price Cap, Cumulative Price Threshold, and Administered Price Cap


Energy Consumers Australia

In the coming years, a significant amount of coal capacity is to be withdrawn from the market and replaced by renewables. Governments and market bodies will need to ensure that this transition is done in a coordinated way that enables us to meet our emissions reduction goals while keeping the lights on.

This major transition needs to be balanced with the significant cost pressure consumers currently face. Consumers have recently been told to prepare for electricity bill increases as high as 55% from July 1 after enduring periods of high inflation and rising interest rates. Any further bill increases will create significant pressure.

Considering this context, we welcome the opportunity to provide comments to the AEMC on the proposal to increase the reliability settings (Market Price Cap, Cumulative Price Threshold and Administered Price Cap). The proposed increase in settings is forecast to increase consumer bills by 3% in real terms between July 2025 and June 2028.

We strongly support the AEMC undertaking extended consultation and considering updated analysis of the need to increase market price settings.

Our submission makes the following key points:

  • The updated analysis should consider the announced federal and jurisdictional reliability schemes (such as the announcement of a federal Capacity Incentive Scheme) which provide revenue certainty for dispatchable capacity.
  • The Federal Government intervention into the domestic fuel markets has resulted in a much lower fuel cost outlook in the review period than at the time of the review.
  • Further potential increases to the price caps could expose market participants – ultimately consumers – to greater risks of periods of sustained high prices.

Read the full submission here.

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