Electricity Retail Pricing
Non-contestable Customers
Non-contestable retail
electricity tariffs and charges are regulated by the
Government, via an Electricity Pricing Order issued by
the Regulatory Minister.
Tranche 4 Contestable Customers
Recognising that some customers would
experience a significant price shock as they moved from the regulated
non-contestable tariff to a cost reflective contestable tariff, the government
has chosen to intervene in the competition process to allow for the staged
movement to cost-reflective prices.
The Regulatory Minister has issued an
Electricity Pricing Order applying to tranche 4 contestable customers (who use
between 750MWh and 2GWh of electricity per annum).
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place, the Commission has withdrawn the Guidelines with immediate effect from 26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.
In November 2009 and under
section 31 of Part 7 of the Utilities Commission Act, the Treasurer
approved the Terms of Reference requiring the Commission to undertake a review
of options for the development of a retail price monitoring regime for
contestable customers. The purpose of the review is to recommend options for a
framework to increase transparency in retail electricity pricing, and ensure
that retail prices reflect the cost of supply.
The Review commenced in March
2010 with the release of an Issues Paper setting out the Commission's assessment
of the issues and recommendations for the Review. The terms of reference for the
Review require the Final Report to be presented to the Minister in September
2010.
Following consideration of
submissions from interested parties and its own further deliberations, the
Commission has released a Draft Report which sets out the Commission's proposals
for a retail price monitoring regime.
The Commission invites
interested parties to make written submissions by Friday 16 July 2010.
Issues Paper
|
