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Legislative Assembly for the ACT: 2002 Week 13 Hansard (20 November) . . Page.. 3791 ..

MS TUCKER (continuing):

Until now, households and many small businesses have been supplied with electricity by ActewAGL only, with large customers being able to seek other electricity suppliers through the national electricity market. With the opening up of the market, I understand that electricity consumers will be able to choose from 13 electricity retailers licensed to operate in the ACT.

It seems that the only reason we are doing this is to fulfil our obligations under the national competition policy. The ICRC found that there is no short-term quantifiable net benefit arising from full retail contestability but that there would be an increase in the overall cost of electricity of between 7 and 9 per cent. There will be increased costs in running the new administrative systems, to allow people to switch between supplies. Individual retailers are also likely to increase their marketing costs to get market share, which costs would ultimately be passed on to consumers.

In theory, there should be long-term benefits to consumers in having more responsive electricity supplies and a greater range of services to choose from, but the benefits are hard to quantify. While having retail contestability for electricity may be okay for commercial users already working within a competitive market-driven environment, you have to question whether this is appropriate for household users.

It has to be remembered that electricity is an essential service that is contributing to the wellbeing of ordinary people. We all need to have lighting, hot water, stoves, refrigerators and heating in our homes. For many people, the only source for this is electricity. We need to make sure that the most vulnerable people in our society are not put in a worse situation by the introduction of full retail contestability.

Larger and/or more educated customers may be able to work out the best deals and may experience some price reductions, as they will have greater bargaining power. The experience from other states is that only a small proportion of customers have moved into the open market. However, small consumers will pay relatively more in their total electricity bills than large consumers. The ICRC expects that full retail contestability would put some additional pressure on services such as the Essential Services Consumer Council.

I note from the minister's statement yesterday that the government recognises that there is a need to protect smaller users who are not in a position to evaluate offers from different suppliers or who may not receive any offers from other suppliers because they are regarded as a risky or low-priority customer.

The minister said that there will be a transitional period of three years in which customers will be able to continue to be supplied by ActewAGL at a regulated price. The Greens fully support this arrangement but believe that we should not be placing an arbitrary limit on this transitional period. It should not cease until the new market arrangements have been proved to have a positive public benefit and we are assured that disadvantaged people are adequately protected.

We also believe that during this transitional period people who have moved away from ActewAGL and taken up a new electricity supplier should be able to move back to a regulated contract with ActewAGL if they are unhappy with their new supplier. People

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