Households are set to save between 20 and 25 per cent on their electricity bill, or around $290 to $415 each year, if recommendations released by the Australian Competition and Consumer Commission (ACCC) last week are adopted.
“It is clear that most households are paying far too much for electricity,” ACCC Chairman Rod Sims said.
“In addition, some of the most vulnerable in our community are forced to struggle through freezing winters and scorching summers, with many others also having difficulty paying their bills.”
The Retail Electricity Pricing Inquiry looked at causes of high electricity prices across the entire electricity supply chain. It concluded that the National Electricity Market is “largely broken and needs to be reset”.
“Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses,” Mr Sims said.
“There are many reasons Australia has the electricity affordability issues we are now facing.
“Wholesale and retail markets are too concentrated. Regulation and poorly designed policy have added significant costs to electricity bills. Retailers’ marketing of discounts are inconsistent and confusing to consumers and have left many consumers on excessively high ‘standing’ offers.
“While important steps have been taken recently, restoring electricity affordability will require wide ranging and comprehensive action.
“We believe our changes can and will, if adopted, have a powerful and tangible impact on electricity affordability for all Australians; this will reduce economic inequality and enhance our national welfare.”
The report also targeted the way we buy electricity and try to find the best deal.
“Too many consumers and small business customers have given up trying to understand offers and switch in a confusing retail electricity market,” Mr Sims said.
“Big changes are required to make it easier for consumers and businesses to understand market offers and improve competition.”
The ACCC’s recommendations include:
It now falls to the government to make the changes.
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