Competition on the rise in the utilities market

“Arghhhh”, you scream when you see your electricity bill – along with some words we can’t publish. The bill has gone up yet again! It sometimes seems as though it doesn’t matter how many energy-saving gadgets and tips you use – the power bill just won’t budge. Would you be any better off in a deregulated energy market?

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What is energy deregulation?

Increased competition through government deregulation has mostly seen the real price of energy remain steady, as more companies can now plead for your custom. Historically, one company had control of a particular state’s energy market – This essentially took the power out of the consumer, and the state-owned energy companies could dictate prices subject to government oversight.

Deregulation isn’t exactly a new thing. In fact, NSW introduced full retail competition all the way back in 2002, allowing new competitors to enter the market. This was then followed up in 2014 with full price deregulation after Victoria did the same thing.

Deregulation essentially means that customers have the option to switch to a market company, and if not were placed on a “transitional tariff”. Those who moved off the tariff – 40 per cent of the market – could have saved a potential $380 a year or more, according to the NSW Government.

While some areas have experienced increases in the real price of electricity, the Australian Energy Regulator says this is mostly the result of network and maintenance costs by the distributor (not the retailer). The increased distributor costs have been associated with the slow fall of electricity usage as more and more Australians switch to solar.

It’s important to know that deregulation does not mean consumer protection laws have vanished. The consumer is still covered by a myriad of strict consumer protection laws – deregulation simply means there is less red tape for new companies to come on board. Deregulation can be a scary word; it conjures up images of executives burning your money to light their cigars. Though in reality it’s a lot simpler, and is unlikely to hurt Australians.

Deregulation Pros and Cons

Pros Cons
Easier to switch companies. Consumer laws mean that people are still protected You can’t “set and forget” your energy provider – you need to research
More variety of energy plans – can pick one that suits your needs There is a chance that prices could still go up, rather than down.
Competitive prices controlled by market forces and not a single body. Aggressive marketing can be annoying

What states are missing out on deregulation?

Not all Australians are able to shop around for a better electricity deal. In Western Australia, Tasmania and the Northern Territory, consumer choice is limited. Read below for the state of the energy market in these regulated states:

Western Australia

Western Australians consuming 50 megawatts of electricity a year or less (most homes and small businesses) are restricted to one provider – Synergy. According to the Western Australia State Government, residential and small business customers seeking power are usually “supplied by Synergy and pay electricity prices regulated by the Western Australian Government as determined under electricity by-laws”.The WA Government has introduced power reforms which Treasurer Mike Nahan says will save $500m in the government budget per year. A number of cost cutting measures include closing down power plants, and demand-side providers. Hopefully the effect of this is that these savings will be passed on to consumers, however there are no guarantees.


In Tasmania, consumers are currently limited to a lone supplier – Aurora Energy. However, July 1, 2014 marked the introduction of full retail competition in Tasmania, with other suppliers set to enter the electricity market in the future.However, a comedy of errors means that electricity bills in Tasmania could rise. Storage dams are at record lows, and the Basslink cable connecting Tasmania to the mainland has been out of action since December 2015. Basslink was constructed to handle peak power usage in Tasmania by connecting it to the grid on the mainland. These errors have meant that the traditionally green state has been burning millions of litres of diesel fuel a month to power the state. It seems deregulation in Tasmania is going to take a backseat until the Basslink issues are fully solved.

Northern Territory

Ah, the good old Top End. It’s a paradise, though from Humpty Doo to Fannie Bay to Coolalinga, the electricity market remains dominated with a government-owned provider – Power and Water Corporation (PWC). PWC services most of the Top End, with only a couple of other companies serving a small number of customers. Jacana Energy and Rimfire effectively serve as spinoffs for the consumer market, and have done since the start of 2016. They offer rates a little below the tariff, and so far have only around one per cent of the Territory’s population on board; the vast majority are still with PWC.Despite the lack of competition, the great north boasts some of lowest energy bills in the country. This is thanks largely to massive government subsidies and feed-in tariffs.

What about Queensland?

Queensland’s energy market is in strange bedfellows at the moment.  The State Government merged Ergon and Energex – two of the state’s leading electricity suppliers.  This merger has a range of both benefits and drawbacks. From July 1 2016 the Queensland government has deregulated the energy market, however it’s still in the process of working out the kinks, and it may be some years before we witness the full effects of deregulation.The state still remains Government energy dominated, and the Australian Energy Regulator has reported that Queensland was the only region to record a rise in prices. It also had the most expensive energy wholesale prices in the country.

How do I get a good deal with an electricity company?

Canstar Blue’s customer satisfaction ratings are a great place to start if you’re looking for a quality energy retailer.Researching your options and shopping around is a great way to save money on energy, and deregulation of the utilities industries in most Australian states means the majority of customers now have a more varied choice of providers.

A survey of 2,500 Australian utilities consumers in 2013 showed that more than one in eight had switched electricity providers in the past 12 months. A third of those who had switched cited price and saving money as the reason they had changed providers.While changing energy providers can be a daunting task, it’s important you make the most of retail competition and find an energy company that looks after you. Taking a few minutes to do some research may save you a lot of money in the long run.

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