ACCC launches survey of energy companies amid high electricity and gas prices

The competition watchdog will examine the profits and margins of energy companies amid rising electricity and gas prices.

Energy prices are trading five times higher than they were a year ago, prompting treasurer Jim Chalmers to write to the Australian Competition and Consumer Commission, asking the regulator to investigate possible price inflation and anti-competitive behavior.

ACCC launches survey of energy companies amid high electricity and gas prices

The ACCC confirmed that they would launch an investigation into several companies and assess whether regulatory changes were needed to ensure the markets function properly.

The move comes after the Australian energy market operator last week took the unusual step of suspending the national electricity market by intervening and setting limits on power and gas amid widespread blackout risks.

Camera icon The ACCC will investigate possible price inflation and anti-competitive behavior in the gas and electricity markets. NCA NewsWire/Jeremy Piper Credit: News Corp Australia

ACCC chair Gina Cass-Gottlieb said the regulator would use its power to provide more transparency for Australians.

“Under the direction of the federal government, we will use our full intelligence-gathering powers to provide greater transparency about the factors that affect electricity and gas prices, including profits and margins of a wide variety of energy companies,” he said. Mrs. Cass-Gottlieb.

“By the Treasurer’s request, we will also review and bring to the attention of the Government if any regulatory changes are required to ensure that the electricity and gas markets function properly to the benefit of all Australian consumers.

“In addition, the Federal Secretary of Energy and the Energy Ministers of the State and Territory have requested the ACCC, as part of its ongoing investigations into the national energy market, to report back by July 2022.”

The ACCC recognized that global factors, namely Russia’s war in Ukraine, have strongly influenced global gas supplies and prices.

“(And) a cold start to winter and a reliance on aging coal-fired power plants exacerbated the challenges already facing the Australian energy market,” said Ms . Cass-Gottlieb.

“We are well aware of the pressures rapidly rising energy prices are putting on Australian households and businesses.”

Camera IconACCC Chair Gina Cass-Gottlieb says any need for regulatory change would be referred to the government. NCA NewsWire/Christian Gilles Credit: News Corp Australia

Head of Government Bill Shorten said he welcomed the ACCC probe.

“I’m glad they’re looking into this. Energy companies shouldn’t be making unnecessary profits when everyone else struggles with the cost of living and a winter hiatus. We have an energy system that’s only ten years behind schedule. In denial,” Mr. Shorten told the Nine Network.

“It is prudential. The energy companies will make their case for the ACCC. But I think many Australians are wondering: are the energy companies benefiting from this?

“We’re going to get to the bottom of it.”

Ms. Cass-Gottlieb said they are working closely with the Australian energy regulator and have co-written energy retailers to “remind them of their obligations” regarding electricity prices.

Retailers cannot price their perpetual offerings beyond the “safety net” set by the AER’s standard market offering – or the stock offers selected by the Essential Services Commi in Victoriassion.

Lori J. Kile
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