Sims to fight for energy price drop
Competition chief Rod Sims has told energy companies the watchdog expects retail electricity prices to come down after a halving of the wholesale price and would take action if the falls don’t begin to trickle on to consumers.
The Australian Competition and Consumer Commission chairman said one of the watchdog’s key priorities for 2021 was policing the prices of essential services, calling out the energy and telecommunications sector.
”Consumers have suffered as prices went up. It’s only fair that they benefit as those prices come down,” Mr Sims said at the Committee for Economic Development of Australia yesterday.
He said the ACCC was watching energy companies as prices had come down a little bit, but it wanted to make sure they fell further. Mr Sims also revealed the watchdog had a number of active investigations in the sector.
”It’s a continuing story because wholesale prices have roughly halved,” he said. ”But, of course, they’re forward contracts and you’ve got to make judgments about when will the price at which they forward contract on come down, not just the spot price.
”Consumers saw prices go through the roof for a range of reasons. They’ve got to get the benefit of prices coming down. Success for me is that consumers get the price reductions.
”I know [some of] the energy companies are in a bit of financial stress, but our interest is in making sure the consumers get that benefit. It’s a big issue for us.”
Mr Sims used his speech to identify the ACCC’s 12 priority enforcement and compliance issues in 2021. They include among others, COVID-19 travel and event cancellations, competition issues in domestic air travel, competition and consumer issues relating to digital platforms and the pricing of essential services such as electricity and telecommunication.
He signalled the ACCC would present proposals to change merger laws, which he said were skewed towards approval.
”That will be the beginning of the discussion. I’m not suggesting there’s going to be change this year. This just keeps the ball on the floor,” he said.
He also said the ACCC was monitoring plans by regional airline Rex to enter major domestic routes in Sydney, Melbourne and Brisbane.
”One issue we’ll be watching very closely is to make sure they get access to slots at Sydney Airport, which is the fundamental constraint. And whether Rex succeeds or fails, who knows? But they shouldn’t not succeed because they can’t get hold of the slots,” he said.
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