Page 2648 - Week 07 - Tuesday, 5 June 2012
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The bill will implement the national energy customer framework, commonly referred to as the NECF. This legislation is also being adopted by other jurisdictions. The second bill will make necessary consequential amendments to existing ACT legislation that are necessary as a result of the adoption of the national energy retail law.
The implementation of the NECF will eventually integrate all participating individual state and territory retail energy markets into a single market. The state and territory regulatory frameworks for the sale and supply of energy will be combined into a single framework with a common set of national rules. NECF will see the removal of inconsistent requirements, providing for a seamless national energy market, meaning increased competition, greater opportunity for innovation in the products that are sold to customers and, consequently and ultimately, more competitive prices.
At the same time, the second bill makes necessary consequential amendments to maintain consumer protections and requirements unique to the territory’s needs. These include the continued role of the ACT Civil and Administrative Tribunal as the energy ombudsman under the NECF and the mandatory green power first offer requirement.
This legislation represents one of the final and major achievements under the energy reform agenda agreed to by Australian governments under the Australian energy market agreement in 2004.
The implementation of NECF was also identified as a priority in the sustainable energy policy released by the ACT government last year. It caps eight years of national energy regulatory reform, which has included the establishment of the national energy market bodies, the Australian Energy Market Commission and the Australian Energy Regulator, and other significant national energy reforms such as the introduction of the national electricity law and the national gas law.
The implementation of NECF in the territory represents a significant improvement to the consumer protection framework for ACT gas and electricity customers, especially those who are most vulnerable. In addition to improving consumer protections, the NECF will deliver lower compliance costs for electricity and gas suppliers wishing to supply into the Canberra market. By streamlining and removing inefficient regulation, this legislation has the effect of making it easier for new electricity and gas retailers from other states to enter the ACT market, through reducing their compliance costs.
Over the longer term, the NECF—by facilitating greater competition through a single national energy retail market, combined with a robust consumer protection framework—will help provide Canberra consumers with more choice through a greater variety of products to suit their needs at competitive prices. This is a significant outcome in the fact of increasing energy costs. In April this year the ICRC released its draft determination for the regulated retail tariff for the period 1 July 2012 to 30 June 2014. The determination recommended an increase of 17.2 per cent on the 2011-12 determination. This increase, driven almost entirely by external factors, represents a significant increase on household electricity bills.
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