Industry welcomes Tasmanian government’s decision to reform electricity market

The Tasmanian government’s decision to reform its electricity market has been welcomed by the Energy Retailers Association of Australia (ERAA) following an expert panel review of the market. The decision will see the government introduce changes such as selling Aurora Energy’s customer base and introducing full retail competition (FRC) for the state by February next year.

“The decision to sell the government-owned electricity retail company, merge the network businesses and to open the market will ultimately bring more choice to customers,” said Cameron O’Reilly, CEO of the ERAA.

According to O’Reilly, the FRC will provide opportunities for new retailers to operate in Tasmania, giving consumers new products and greater choice.

“It will allow for a more dynamic, service-focused energy retail sector which will offer more energy market contracts to households,” said O’Reilly. “When given choice, Australians tend to embrace the right to switch energy companies.”

“However, FRC won’t necessarily mean huge reductions in people’s energy bills,” he warned. “More than 85% of retail electricity bills are determined by the wholesale cost of electricity and network charges all of which retailers have to pass through to end consumers.”

The expert panel recommended the government restructure Hydro Tasmania; however, it has elected not to. O’Reilly said this will need to be monitored.