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Legislative Assembly for the ACT: 2002 Week 13 Hansard (21 November) . . Page.. 4051 ..

Mr Quinlan: The answer to the member's question is as follows:

(1) The ACT is expecting to receive from National Competition Payments approximately $12.2 m for 2003/2004. The payment will be for the ACT's overall performance in implementing National Competition Policy. It is not possible under the assessment process used by the National Competition Council to link a program to any part of the payment.

(2) The Independent Competition and Regulatory Commission (ICRC) in its 'Final Report on Full Retail Contestability in Electricity in the ACT', released on 12 July 2002 and tabled on 29 August 2002, estimated that ACT domestic customers costs directly attributable to FRC are estimated to be between $1.92 and $3.25 per month at the upper threshold.

(3) The financial advantages to domestic customers in the ACT of introducing FRC relate primarily to wider market issues. They are predominantly in the form of mitigation of price rises associated with the renegotiation of supply contracts in a tightening wholesale market.

The introduction of a competitive market to a wider group of customers also reduces the potential for continued cross subsidisation of smaller customers by larger customers within the sub-100MWh tranche. The community is currently paying for any cross subsidies through increased costs of goods and services charged by those ACT businesses. FRC will enhance the viability of small businesses by providing them access to electricity cost structures similar to those enjoyed by interstate and larger competitors.

Competition between suppliers may result in prices being offered to ACT domestic customers below the rate offered by actual.

Under the approach taken by the Government customers can stay with actual if they so choose. In this way, electricity users get to choose their supplier in light of their assessment of their best interest.

(4) The benefits of FRC expected to accrue to ACT domestic customers are not fully quantifiable at this point but the benefit will accrue over time.

The provision of choice is of itself a benefit. This choice provides for customers the opportunity to make known their priorities and preferences in terms of the level of service, and nature of product being offered. The potential to encourage investment in renewable energy sources, for instance, is a benefit of FRC not easily assessed in dollar terms.

(5) The systems and processes that need to be improved are those associated with facilitating the transfer of customers between retailers and attributing the electricity used by an individual customer to the appropriate retailer in order to 'settle' the wholesale market. All such transfers and settlements systems and processes must be compatible with the IT systems and comply with the rules developed by the National Electricity Market Management Company (NEMMCO).

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