In the 1990s, Victoria’s energy market was broken up into monopoly businesses, networks that own the poles and wires, and businesses that operated competitively, the generators and retailers. Other states followed suit. Price regulation was adopted in an effort to limit how much monopoly network businesses could charge, but recent legal maneouvres by those businesses mean that we will end up paying more than is fair.
Recognising that the system preferences big business, the authors of that 2012 report—an Expert Panel led by Oxford University Professor George Yarrow—recommended significant reform to the framework. In particular, the report recommended doing away with the legalistic processes of the Competition Tribunal, which operates as a division of the Federal Court. Disappointingly, the Panel’s recommendations were watered down during the legislative process.
National energy markets and regulators are governed by an objective that promotes the long-term interests of consumers. If energy ministers nationally wanted to promote the consumer interest, a simple step would be to abolish the ability of networks to appeal price determinations.
Gerard Brody is the Chief Executive Officer of Consumer Action Law Centre.