Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2000 Week 3 Hansard (7 March) . . Page.. 630 ..

MR STEFANIAK (continuing):

That was not a problem for larger customers, but there is no point in a smaller customer getting a lower energy charge and then paying a higher bill because of high metering costs. That was the constraint in New Zealand when competition in retailing was first introduced. Small customers were free to choose their retailer, but faced charges of several thousand dollars to install advanced metering. It came as no surprise that few small customers switched retailer.

There is a lot of work going on now to try to demonstrate what is the best, most cost-effective customer transfer approach for Australia. It is a big issue, especially for Victoria and New South Wales. It is possible that this highly technical work will delay the date of introduction of full competition for a few months, but it simply means that Australia is learning from overseas in trying to get things right. It does not affect the transition, Australia-wide, to competition.

Both the Victorian and New South Wales governments have reaffirmed their commitment to full retail competition. New South Wales envisages a transition process, as in the ACT. In Victoria, where the law states that each and every customer will be contestable next year, the task will tough task, but it is one that is receiving a lot of attention.

One watchword at the moment is flexibility. There is flexibility to exploit new technology as it becomes available over the next decade, technology which it is reasonable to expect will make customer transfer and metering easier and more affordable than before. There is the flexibility that will enable utilities to retain their customers by offering gas and electricity on the same account. But concentrating too much on the precise details about how an increase in competition will affect ACTEW retailing is concentrating on the wrong issue. (Extension of time granted)

Some people have suggested that all the technical concerns about metering and customer transfers and the possibility that most domestic customers may, in the short term at least, stick with the company that they trust, mean that we can stop thinking about the future of ACTEW. That is not sensible. The reality is that the present situation, where one half of the electricity is contestable, means that times are tough for retailers and that customers have every interest in keeping it tougher for them. Even a small shift of customers to another retailer would make the wholesale trading issues faced by ACTEW on a day-to-day basis even more extreme. Even a small shift would mean that retailers would have to work harder to keep costs low. It would also mean that they would have to work harder to manage their risks.

In summary, it is clear that customers, both large and small, have benefited from the reform of the electricity industry. Life for the electricity companies, particularly the retailers, has become harder. It is very likely that further retail competition will make life tougher still, but that is simply a continuation of a process. In managing risk, in driving down costs in a very competitive industry and in keeping prices low for customers, size is a thing that does matter. The ACTEW/AGL partnership provides the means by which ACTEW's retailing operation can face the future with increased confidence.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .