AEMC Kicks Off Consumer-Focused Electricity Pricing Review

Australian Energy Market Commission (AEMC) Chair Anna Collyer has announced more detail concerning a comprehensive review of electricity pricing, products, and services in Australia.

Energy is at the heart of just about everything we do, so electricity pricing is and will always be a hot-button topic. It’s a particularly sensitive issue at the moment with cost-of-living pressures from all corners causing headaches and hip-pocket pain for so many Australian families.

Australia’s consumer energy landscape is rapidly changing, with ongoing uptake of rooftop solar and increasingly, batteries and electric vehicles. So it’s important at this juncture for the powers-that-be to step well back and take a good, hard look at arrangements to see if they are still fit for purpose – and especially given some electricity retailers are still behaving badly.

Back in June this year when delivering her keynote speech at Australian Energy Week, Ms. Collyer said the AEMC was aware of concerns from (and concerned about) some customers experiencing unexpected changes to their electricity tariffs after having a smart meter installed.

The presence of a smart meter is necessary when installing a solar power system these days, but the bigger picture is the AEMC’s aim of having smart meters rolled out across Australia by 2030 – and this includes homes and businesses without solar panels.  Ms. Collyer stated smart meter related tariff issues would be investigated in tandem with a broader electricity pricing review.

A “Fresh Look” At Electricity Pricing And Products

Yesterday, the AEMC provided more detail on that broader review.

”This Review will take a fresh look at how we can deliver the best outcomes for all consumers across the electricity supply chain,” said Ms. Collyer. “We’re not just looking at those who have adopted new energy technologies. This Review will consider how to deliver benefits and protections for all consumers, whether or not they have CER at home.”

CER stands for Consumer Energy Resources¹ – devices that generate or store electricity such as solar panels and home batteries, and flexible loads such as hot water systems and air-conditioners.

Effective integration of CER will benefit everyone through a smoother-operating, more cost-efficient and reliable power system. Through tight integration of CER, increases in network costs and other grid-scale infrastructure investments can be minimised or avoided – and that’s good for all electricity customers as these costs are ultimately passed on. Various stabs have been taken at estimating the net benefit of effective CER integration and coordination that put it at anywhere between $1 billion and $6.3 billion by 2030 – 2040.

As well as considering market arrangements to provide consumers with a range of appropriate electricity products and services to suit their circumstances, the review will also look at the roles of Distributed Network Service Providers (DNSPs) and retailers in making such offers available – and ensuring efficient outcomes.

Have Your Say

The AEMC is encouraging feedback from consumers during this process.

‘We’re committed to conducting this Review in an open and collaborative manner. Input from consumers, industry, and other stakeholders will be crucial in shaping a future electricity market that works for everyone.”

To that end, the AEMC has released the review’s draft terms of reference and is inviting feedback by Thursday, 22 August. If you’re really keen, you can register to attend a virtual public forum on Tuesday, 20 August 2024 where you can put questions to the review team on the draft terms of reference.

Input from the feedback period will help inform the review’s final terms of reference, which will be part of a consultation paper published by November this year. But a final report will be some way off – early 2026.

As it will be a while before any real change occurs, it’s wise to compare electricity plans and feed-in tariffs in the interim to help determine if what your retailer is currently providing is best for your needs.