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Power Transformed

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The electricity services market is changing rapidly. Until recently, people and businesses bought their electricity from a single electricity retailer, along poles and wires owned by a distribution business. But with rapidly reducing cost of new technology, consumers can already choose from a range of technologies and services to manage their demand, which is predicted to grow and evolve over time. They can also produce and store their own electricity supply. Further technical transformation is likely, with increasing use of smart meters and cost-reflective network pricing unlocking a new wave of innovative services.

Electricity market reform is also underway to remove cross-subsidies to ensure that network investment is limited to the minimum necessary and to incentivise consumers to adjust their use patterns in response to price signals.

The new market can offer unprecedented opportunity for consumers to have a choice in how their energy needs are met and to save money, and many consumers may reap rewards. However the transforming market can also bring more choice and complexity, and with it, the potential for consumer detriment through poor choices.

In addition, some customers will face challenges to participating in the new market due to a range of factors including socio-economic status, home-ownership, literacy or wealth. Those that are unable to participate may end up paying more for their regular electricity supply, as they are unable to access the generation, storage or energy management technologies that will help them reduce their consumption or exposure to cost-reflective network prices.

It is central to the success of reforms that consumers can trust the energy market, and the market itself delivers good consumer outcomes. The exercise of consumer choice is central to the effectiveness of market reforms.

It is well established that in the face of complexity and a high volume of information, people tend to make worse decisions or opt to make no decision at all. In a complex and information-rich electricity market, the risk is that some consumers will either disengage or get poor outcomes such that their trust in the market will be undermined. At worst, poor decision-making could lead to a lack of supply as off-grid systems fail or are insufficient to meet demand. If consumers opt out of the new market, the benefits of reforms will be jeopardised.

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The Report

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The report was published on July 31, 2016. Read the report here.

 

Reference Group members were:

Name Organisation Term
Independent Chair
Andrew Reeves Andrew Reeves Consulting March 2015 – May 2016
Members
Gerard Brody Consumer Action Law Centre March 2015 – May 2016
Ben Burge

Chris Murphy

Powershop

Powershop

March – December 2015

January – May 2016

Ian Clyde

David Young

Essential Services Commission Victoria

Essential Services Commission Victoria

March – December 2015

January – May 2016

Mark Feather Department of Economic Development, Jobs, Transport and Resources March 2015 – May 2016
Michelle Groves Australian Energy Regulator March 2015 – May 2016
Gabrielle Kuiper Public Interest Advocacy Centre March – August 2015
Tim Nelson AGL Energy March 2015 – May 2016
Lara Olsen

Melissa O’Neill

Citipower/Powercor

Citipower/Powercor

March – December 2015

January – May 2016

Stuart Richardson Department of Industry, Innovation and Science March 2015 – May 2016
Rosemary Sinclair Energy Consumers Australia August 2015 – May 2016
Paul Smith

Chris Spangaro

Australian Energy Market Commission

Australian Energy Market Commission

March – December 2015

December 2015 – May 2016

Yolande Strengers

Larissa Nicholls

RMIT

RMIT

March – December 2015

January – May 2016

Dean Van Gerrevink Vector Advanced Metering March – December 2015
Tony Wood Grattan Institute March 2015 – May 2016

The Power Transformed report will not necessarily reflect the views of individual Members, nor will strategies for the transforming market necessarily be endorsed by them.

Feedback will be sought from other stakeholders, including consumer representatives.

Forthcoming meetings include:

  1. Consumer decision making in the complex electricity services market: potential for detriment
  2. Inclusion in the high-tech energy market: how do we re-define the essential electricity supply service?
  3. Tools and strategies to enable good consumer outcomes and build trust

To receive updates from these meetings as they progress, and keep up to date on leading thinking on enabling good consumer participation in the transforming energy market, sign up to our updates on the sidebar.

The Power Transformed report is scheduled for release in July 2016.

Meeting updates:

Images from Maria Elena, Jeremy Levine,

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