Increased electricity prices to fuel competition says ACT Utilities

News posted on 28.01.2014 on Research & developement

The ACT has the lowest electricity prices in Australia, a well known local brand, high customer satisfaction and a reliable network says ActewAGL general manager of retail Ayesha Razzaq. These form high barriers to entry for electricity retailers, with the smaller electricity retailers suggesting that an increase in power prices might entice new entrants to the ACT market and increase competition there.

The ACT's smaller electricity retailers have raised the pricing issue with the Independent Competition and Regulatory Commission (ICRC) which is currently conducting its annual review. The commission has discussed the idea of paying a so-called competition allowance to attract more electricity retailers to the Territory while Energy Australia, Canberra's second largest electricity retailer, has also indicated that more incentives are required to make the market more appealing to retailers.

The ACT government has stopped short of supporting any incentive subsidy payable to power companies, with Energy Minister Simon Corbell pointing to a lack of evidence that a price subsidy would improve competition, believing the cost would be passed onto consumers instead.