ACCC Report confirms need to address competition in energy

ERM Power welcomes the ACCC Report which highlights the need for competition in generation and retailing. ERM Power CEO Jon Stretch said: “ERM Power is a Commercial and Industrial retailer that has brought competition and service to the business market,…

Posted on

ERM Power welcomes the ACCC Report which highlights the need for competition in generation and retailing.

ERM Power CEO Jon Stretch said: “ERM Power is a Commercial and Industrial retailer that has brought competition and service to the business market, challenging the large vertically integrated gentailers and taking more than 20% market share in C&I retailing.”

“The highest customer satisfaction ratings in the industry by a long shot show we have made a difference and we do the right thing by our customers.

“The retail price of electricity for business is far lower than residential but as we continually point out, 70% of generation in every jurisdiction is owned by a couple of large companies.

“The ACCC Report today shows that this has significantly impacted the wholesale price of electricity,” he said. [Table below shows the change in cost stack components in C&I between 2007 and 2018]

“The design of the National Energy Guarantee must not further entrench the power of the large incumbents who control generation and have retail businesses.

“Market concentration of generation ownership and vertical integration of retailers and generators has had a huge impact on price and outcomes for business and residential energy consumers.

“The ACCC Report and the National Energy Guarantee are essential to addressing the issues and delivering policy which energy users and the industry can rely on. Australia’s international competitiveness demands reliable and affordable energy so it’s critical we get this right.”

ACCC Report Retail Electricity Pricing Inquiry

Table 18.2:  Change in stock stack component between 2007-08 and 2017-18 (est.)-change per component C&I
 
2007–08
2017–18 est
Change
Increase in cost of component
Component increases as a share of total growth
Network
3.5
5.5
2.0
57%
35%
Wholesale electricity
5.7
8.3
2.6
45%
45%
Environmental
0.3
1.5
1.2
424%
21%
Retail costs
0.1
0.2
0.1
114%
2%
Retail margin
0.4
0.3
-0.1
-34%
-2%
Total cost stack
10.0
15.7
5.8
58%
n/a

Source:  ACCC analysis of retail data.

Network, and more recently, wholesale costs have made up the majority of the price increases over the period, contributing 35 and 45 per cent respectively. Environmental schemes have contributed 21 per cent to increases in prices. Retailer costs and margins have played a negligible role and have not contributed to the increase when combined.

ENDS
Media contact:
Tracey Palmer
Communications Manager
07 3021 3266
0438 310 539
TPalmer@ermpower.com.au

About ERM Power

ERM Power is an Australian energy company operating electricity sales, generation and energy solutions businesses. The Company has grown to become the second largest electricity provider to commercial businesses and industrials in Australia by loadsuper1, and is the only energy retailer licensed to sell electricity in all Australian states as well as the Northern Territory and the Australian Capital Territory. A growing range of energy solutions products and services are being delivered, including lighting and energy efficiency software and data analytics, to the Company’s existing and new customer base. ERM Power also sells electricity in several markets in the United States. The Company operates 662 megawatts of low emission, gas-fired peaking power stations in Western Australia and Queensland.  www.ermpower.com.au

____

i Based on ERM Power analysis of latest published information

Posted on