The Turnbull Government has ordered the Australian Competition and Consumer Commission to review retail electricity prices, saying consumers need confidence in the market.
Electricity retailer behaviour, as well as contracts offered to consumers and business, will be scrutinised to ensure it is not just power companies benefiting from the National Electricity Market.
"The Turnbull government is determined to ensure Australians get a better deal for their energy," Mr Turnbull said in a joint statement with Treasurer Scott Morrison on Monday.
"A better deal in electricity is vital to keeping the lights on, delivering cheaper prices to families and businesses and sustaining jobs, particularly the thousands of jobs in our energy-intensive industries."
Energy Minister Josh Frydenberg said the government hoped the inquiry would lead to reduced power bills for households and businesses across the country.
"We want to get more information into the public realm and whatever reforms follow from that will be in the best interest of the consumer," Minister Frydenberg told the ABC on Monday.
The Turnbull Government has given the watchdog until June 30 next year to undertake the review, given it will be data-intensive and of a complex nature, however the ACCC will need to produce a paper within six months on its preliminary findings into the strategies and pricing behaviours of key electricity retailers.
The industry watchdog will work with the Australian Energy Regulator and the Australian Energy Market Commission in undertaking the inquiry.
The government said recent research by a number of organisations highlighted significant concern about the causes of recent electricity price increases on the east coast.
Concerns were flagged by the Australian Energy Market Commission, Energy Consumers Australia and the Grattan Institute, as well as in submissions to the COAG's review into energy markets, chaired by Alan Finkel.
The Federal Opposition has welcomed the review but said it ignored the fact that there is no national leadership from the Turnbull Government.
"We don't have a national energy policy," Mr Shorten told reporters in Canberra on Monday.
Labor wants a policy which includes a national interest test for future gas developments; an emissions intensity scheme; greater investment in renewable energy; and the power given to the ACCC to decide when to investigate markets that disadvantage Australian consumers.
Crossbench senator Nick Xenophon wants a public interest test to make sure resources are used in a way consistent with Australian sovereignty, and reinforced his view that energy security should be dealt with properly before he votes with the government on company tax cuts.
"Right now Australia is facing an energy crisis and waiting 12 months for an ACCC inquiry is yet another failure of leadership on the part of the government to tackle these issues," Senator Xenophon said.
The ACCC's terms of reference for its electricity market review will include:
- The key cost drivers of retail electricity pricing.
- Whether there is any behaviour preventing or limiting competition or consumer choice.
- The profitability of electricity retailers and whether these profits are commensurate with the risk retailers face.
- All wholesale market price, cost and conduct issues relevant to the inquiry.
- with AAP
