Market Issues
In
September 2002, NT Power – the only competitor to Power
and Water in the Territory’s electricity market – exited
the electricity market, citing an inability to secure
on-going gas supplies.
In light of these developments,
in January 2003 the Government decided to suspend the contestability timetable
that would have seen full retail contestability achieved by April 2005. This has
the effect of halting contestability at the 750MWh per annum level until
prospects for competition re-emerge.
In August 2009, the
Treasurer approved Terms of Reference for the Commission
to undertake a review of Full Retail Contestability
(FRC) for NT electricity customers.
The Commission is to report on the objectives
of FRC in the Northern Territory context, the conditions necessary for
competition to develop in the Territory, and the prudent actions Government
should take to encourage the development of competition. The inquiry is to
present the various options for the design and rules of FRC arrangements for
electricity in the Northern Territory and make an assessment of the likely
costs, benefits, and feasibility of each.
The Review commenced in
August
2009 with the release of an Issues Paper setting out the Commission's assessment
of the issues and recommendations for the Review. A Issues Paper was released
for public comment in October 2009. The Final Report was presented to the Minister in
December
2009.
The Current State of the Electricity Market
As part of the Commission's role in keeping the
market informed, the Commission has issued the following reports in relation to
the composition of the Territory's electricity market, with the main focus being
the on the size of the contestable and potentially contestable market.
The Commission has been advised by Power and
Water that previously published electricity supply information in the 1999-00
and 2000-01 reports contained some errors. The Commission has revised these
reports.
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