FIX IT! How to fix the energy market rule making process – an evaluation
Since 2012, consumer advocates have been able to propose a ‘rule change’ to the National Energy Retail Rules (NERR), which regulates the sale and supply of electricity and gas to retail customers in subscribing states and territories. Proposing a rule change initiates a process of consultation and determination by the Australian Energy Market Commission (AEMC). This rule change process is a new way consumer advocates can seek to improve consumer outcomes.
Consumer Action Law Centre (Consumer Action) and the Consumer Utilities Advocacy Centre (CUAC) partnered to make the first rule change under the NERR. The experience of being the first proponents of a retail rule change is documented in this assessment of the efficiency and effectiveness of the rule change framework and its ability to deliver good consumer outcomes.
Our experience is that a retail rule change is an extremely resource intensive and lengthy process. The process is too cumbersome for it to be a viable avenue for consumer advocates to improve energy market regulation that promotes the long-term interests of consumers.
Further, we consider that the retail rule change and related institutional framework is not able to effectively respond to a dynamic and changing retail energy market. For consumer representatives this is a significant concern—it means that the national energy market processes are incapable of promoting good consumer outcomes.
Recommendations are made both to improve the current AEMC rule change process as well as to replace the rule change process with an alternative market review mechanism.
The report draws on the findings of an evaluation report, published simultaneously.
This work was supported by a grant from the Consumer Advocacy Panel (now Energy Consumers Australia).
Download the report here