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Legislative Assembly for the ACT: 2002 Week 13 Hansard (21 November) . . Page.. 4005 ..

CONSULTANCY

TRANSITION PATH FOR FULL CONTESTABILITY IN A.C.T.

ELECTRICITY RETAILING

TERMS OF REFERENCE

SUMMARY

At present, ACT electricity customers using 160 MWh p.a. or more at one premises, are free to choose their retailer. Around 17 retailers other than ACTEW are at present licensed in the ACT. Around 45% of ACT electricity is now contestable.

The timetable endorsed by ACT Ministers envisages that a transition to extending retailer choice to all remaining customers will commence from 1 January 2001, subject to consultation with other jurisdictions and subject to economic or technical constraints.

The consultancy will assist in planning for extending choice of retailer by providing options for a transition path that produces the best outcomes for end use customers whose consumption is under the present threshold.

The consultancy is also to provide an assessment of how a balance of costs and benefits favourable to customers may be best facilitated whether through full access by all on 1 January 2001 or by options for phasing in full retail competition over a period.

The assessment of indicative costs and benefits may then be used to guide and support further Government decision making as to the most appropriate path to full retail contestability for the ACT.

BACKGROUND INFORMATION

The ACT is, in relation to customers already contestable, broadly aligned with NSW and Victoria. It should be noted that arrangements for aggregation of sites using more than 100 MWh p.a. in NSW does not apply in the ACT.

� NSW released in May 2000 its proposed transition strategy for extending retailer choice to all customers. It is at present unclear what, if any, transition process, is intended for Victoria.

� ACT customers at present contestable who choose a retailer other than ACTEW, i.e. "second tier customers" in the terms of the National Electricity Code, must conform to the relevant metering requirements of the National Electricity Code.

� ACTEW's present franchise retail and network charges are as set out in the most recent determination of the ACT Independent Competition and Regulatory Commission.

� Jurisdictions, in particular Victoria and NSW, have set in place a process to clarify the decision making process for implementation of full retail competition and to specify and build nationally-consistent systems for customer transfer and settlement services for full retail, competition. As part of this process, an industry based National Electricity Market Settlements and Transfers Group (NEMSAT) has been established.

� Proposed changes to the National Electricity Code will set out, a broader range of metering options to accommodate further retail competition.

� Other publicly available information on economic modelling of price impacts associated with differing approaches to full retail competition may be relevant.

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