Consumer Issues

Customers - Defining Contestability

Consumers who can choose their retail supplier are called contestable customers. Whether a customer qualifies as a contestable customer will be conditional on their electricity usage and is defined by the Regulations.

Currently, customers who consume more that 750MWh of electricity per annum are contestable.

The minimum customer consumption is calculated as:

• a customer’s actual total power consumption at a single site during a consecutive 12 month period since 1 July 1998 was more than the set level (e.g. 4 GWh in respect of the 1 April 2000 eligibility date for contestability); or

• a customer’s expected total consumption at that site during a consecutive 12 month period beginning on or after 1 April 2000 is likely to be more than the set level if the customer either:

  • did not consume electricity at that site before 1 July 1998, or

  • the customer’s business or premises at that site were expanded after 1 July 1998 and the expansion causes the estimate to be more than the set level.

Reversal of Contestability

The Electricity Reform (Administration) Regulations provide  that a customer's status as a contestable customer may be revoked in some circumstances.

A customer must apply to Power and Water for revocation of contestability status in the first instance, but may apply for a review of Power and Water's decision where such an application has been refused.

Pursuant to section 7 of the Utilities Commission Act, the Commission has issued Guidelines designed to articulate the principles that will underlie any review by the Commission and to set out the processes the Commission will follow in deciding whether  to revoke a customer's contestability status.

• Reversal of Contestability Guidelines

Information for Contestable Customers

Among the Utilities Commission’s functions is ensuring that (prospective) contestable customers receive necessary and balanced information about their rights and obligations under the new arrangements. With this aim in mind, a series of information circulars have been issued to address some of the questions which potential contestable customers might have.

• Letter to Contestable Customers regarding the withdrawal of competitor - 6 September 2002

• Information Circular: No 5

• Information Circular: No 4

• Information Circular: No 3

• Information Circular: No 2

• Information Circular: No 1

Contestable Pricing Guidelines

Retail prices paid for electricity by contestable customers is a matter for negotiation between each customer and licensed retailers. 

In September 2001, the Commission published Contestable Pricing Guidelines to present the Commission’s views on the types of pricing conduct that could give rise to a finding of ‘anti-competitive’ and/or ‘discriminatory’ conduct by the Commission under either the Ring-Fencing Code or the complaints provisions of the Electricity Reform Act 2000. 

These Guidelines were developed initially to provide guidance during the tender process associated with contestable government sites when there were two competing suppliers and, as such, the Guidelines were not developed with a view to providing guidance in the absence of effective retail competition. With the Guideline’s focus on anti-competitive pricing and discriminatory pricing, the focus of the Guidelines is on placing a floor under Power and Water’s contestable customer pricing without any attention being given to possible ceilings to that pricing. 

In the circumstances that currently prevail in the NT electricity market, the Commission has decided that the Guidelines are in need of review. To allow time for such a review to take place, the Commission has withdrawn the Guidelines with immediate effect from 26 April 2007. 

The Guidelines issued by the Commission on 1 December 2004 “On Negotiating Power Prices With A Large New Load” remain in force.

• Guidance on discounting for large loads

Register of Contestable Customers

As Power and Water is the only holder of complete lists of customers, it would be unfair to allow them to begin signing up potential customers before these customers are known to other potential suppliers. In the interests of fair competition, a Register of Contestable Customers is held by the Utilities Commission.

• Register of Contestable Customers

Non-Contestable Customers

The ‘market structure’ arrangements applying to non-contestable customers (those customers who are not yet classed as contestable) remain unchanged from those which applied prior to 1 April 2000.

Power and Water Retail continues to be the franchised supplier of ‘non-contestable customers’, and the prices charged for electricity are set by the Government.