01.NSW to deregulate its electricity prices
The NSW government has announced it will deregulate electricity prices, following the lead of Victoria and South Australia.
Under the current system, the Independent Regulatory and Pricing Tribunal (IPART) sets a regulated price, which is available for all consumers, in addition to companies having market prices. But as of July 1, IPART will no longer be required to set prices, leaving it completely up to energy companies to choose their prices.
NSW premier, Barry O'Farrell argues the changes will improve competition, saying one million customers currently on a regulated price will see a reduction in the cost of electricity charges.
While CHOICE welcomes any move to reduce electricity prices, various reports have found that price deregulation in Victoria, the first state to fully deregulate its electricity market, haven't resulted in any overall benefit to consumers in terms of price. In addition, retail costs only account for a small proportion of the average electricity bill. In NSW, the main drivers of cost increases over recent years has been in the infrastructure costs such as poles and wires.
The other issue is that for consumers, finding the cheapest retailer is very hard work. A CHOICE survey in 2012 found a third of consumers who had joined their retailer in the previous three years said they had tried to compare providers but found it too difficult.