This report provides the December update on the ACCC’s inquiry into the prices, profits and margins in the supply of electricity in the National Electricity Market (NEM). The report examines the prices that customers are paying in the retail electricity market, the state of competition as well as the financial performance of electricity retailers.

Information has been gathered from retailers on their price setting strategies and on the policies and processes retailers have in place to manage their obligations with the Prohibiting Energy Market Misconduct prohibitions. The report collects information from retailers on time of use and demand offers. The dataset covers over 6.7 million residential customers (78% of residential customers in the NEM) and 400,000 small business customers.

The retail electricity market has experienced some modest improvements in competitive conditions over the past year with net growth in the number of new retailers entering the market. Analysis of publicly available acquisition offers shows that retailers are competing for new customers and offering prices below the default offers. These emerging signs of improved competition will be monitored in the next electricity inquiry report. 

The National Electricity Market comprises Victoria, New South Wales, South Australia, Queensland, the Australian Capital Territory and Tasmania.  

Findings

• Retail prices have fallen, more customers are on offers with prices below the default offers.
• Price outcomes vary by offer type, with demand offers the most expensive.
• Customers who switch regularly tend to be on better prices.
• Customers who do not switch pay more, paying a ‘loyalty penalty’.
• Valuable mechanisms exist to support customers, but can be improved.
• Costs of supply and retail margins have increased overall, but varied greatly between retailers.