ACCC lines up power price check
The Federal Government has ordered the ACCC to look at retail electricity prices.
The Australian Competition and Consumer Commission (ACCC) will be given the power to demand information from electricity companies as part of its in-depth review of the market.
It will then decide if formal intervention is needed.
The probe will look at power retailers’ margins and profits, to see if they match the associated costs and risks.
It will also review the transparency and clarity of energy company contracts with consumers, looking for signs of collusion in particular.
The ACCC has been directed to consider:
- what drives the cost of retail electricity pricing
- entry barriers in retail markets
- impacts of vertical integration business models
- signs of preventative or limiting behaviour
- the profitability of electricity retailers
“A better deal in electricity is vital to keeping the lights on, delivering cheaper prices to families and businesses and sustaining jobs, particularly the thousands of jobs in our energy intensive industries,” Prime Minister Malcolm Turnbull and Treasurer Scott Morrison said in a joint statement.
The ACCC has until June 30 next year to deliver a report, due to the “data-intensive and complex nature” of the review.
A preliminary paper into strategies and pricing behaviours is expected within six months.