The Australian Energy Market Commission (AEMC) has released its final report of the Power of Choice Review, suggesting substantial reforms to the national electricity market (NEM) to give consumers greater choice in the way they use electricity.

 

The recommendations include changes to the National Electricity Rules (NER), the National Energy Retail Rules and sever government programs to provide information, technology and price options.

 

AEMC Chairman, Mr John Pierce, said the package of reforms would enable the electricity market to meet the needs of consumers over the next 15-20 years.

 

“The reforms provide more opportunities for consumers to make informed choices based on the benefits that end use services provide. Ultimately, consumers are in the best position to decide what works for them.

 

The overall benefits to the system will be realised through the choices that consumers make.” Mr Pierce said.

 

AEMC recommendations propose:

  • More flexible electricity pricing to better reflect the costs of electricity supply at different times.
  • Price incentives for consumers who choose to change their consumption patterns, with safeguards for consumers with limited capacity to change their consumption.
  • A review of existing arrangements to make it easier for consumers to switch between electricity retailers.
  • Encouraging commercial investment in the technology that enables flexible pricing options and other demand side participation products.
  • Rewarding commercial and industrial energy users for changing their consumption patterns.
  • Improving consumer access to electricity consumption data to enhance understanding of their energy use.
  • Clarifying the role of third parties providing energy management services to improve competition and robust consumer protection.
  • Incentives for networks to consider demand side projects in lieu of infrastructure investments.
  • Allowing consumers to sell energy they generate (eg. solar, embedded generation, battery storage) to parties other than their retail electricity supplier.

 

A comprehensive awareness program to help consumers to make informed decisions about their electricity consumption is recommended prior to the implementation of pricing and metering reforms.