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ELECTRICITY MARKET AUSTRALIA 3

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Australia’s retail electricity markets: who is serving whom? A report prepared for GetUp! August 2016 Executive Summary This report has been prepared for GetUp! We have been asked to analyse and comment on the retail electricity markets serving household electricity consumers in the National Electricity Market (NEM). The business of providing electricity to households by electricity retailers encompasses the acquisition of electricity in bulk, the purchase of network services from distributors and then the sale of that electricity to small customers. Retailers incur expenses in the management of price risks and in marketing, advertising, sales, customer service, billing and revenue collection. When electricity was provided by state and municipal electricity monopolies in Australia until the mid to late 1990s, the business of retailing electricity was described as one of the four main activities in the electricity industry (the others being generation, transmission on high voltage networks and distribution on the lower voltage networks). At that time retailing was described as, by far, the least expensive of the four activities. By comparison with electricity production and distribution, very little capital is required to provide the retail service. This Report shows that in those parts of the NEM where retail markets have since been fully deregulated (opened to competition), charges for retailing electricity to households have grown to be a far bigger portion of the hou ...
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