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Governments should be open to the idea of the "nuclear option" of re-regulating household gas and electricity prices if retailers do not improve their offering to consumers, the head of Victoria's energy watchdog says.
Essential Services Commission chairman Ron Ben David said price re-regulation should only be implemented if other regulatory measures fail to tip the market in favour of consumers.
Victorian power prices have been fully deregulated since 2009 and there are now almost 30 electricity retailers competing for customers.
However, in a personal submission to a government review of the retail energy market, Dr Ben David said it had not resulted in better outcomes for consumers.
"These days there are some very high discounts in the market, 30, 35, even 40 per cent," he said.
"But you don't know how long you're going to get that discount for, and you don't know what price that discount is off."
Mr Ben David said up until now he had been confident they could "tweak competition" to make it work for consumers.
"But as each year goes by I've become a little more concerned that that might not be the case," he said.
"I call re-regulation the 'nuclear option' because once you regulate a market you remove the incentive for the service providers to be innovative.
"I think we should try and maintain that incentive for as long as possible but if in the end we can't make it work in the interests of consumers then we have to look at the options, and that would be re-regulation."
He said retailers should be required to provide better and clearer information to consumers.
Electricity bill prices in Victoria 2010-2017
| Distributer | Citipower | Powercor | Ausnet | Jemena | United Energy |
|---|---|---|---|---|---|
| 2010 | $1,132 | $1,245 | $1,179 | $1,212 | $1,164 |
| 2011 | $1,175 | $1,322 | $1,301 | $1,330 | $1,257 |
| 2012 | $1,454 | $1,673 | $1,678 | $1,659 | $1,576 |
| 2013 | $1,499 | $1,738 | $1,830 | $1,742 | $1,640 |
| 2014 | $1,532 | $1,778 | $1,908 | $1,793 | $1,694 |
| 2015 | $1,487 | $1,760 | $1,901 | $1,735 | $1,634 |
| 2016 | $1,561 | $1,787 | $1,874 | $1,747 | $1,601 |
| 2017 | $1,655 | $1,889 | $2,058 | $1,919 | $1,765 |
Source: St Vincent de Paul Society and Alviss Consulting
Retrograde step
The Australian Energy Council, which represents energy retailers, said the competitive energy market in Victoria was in its infancy.
Chief executive Matthew Warren said price re-regulation would be a retrograde step.
"We've seen re-regulation in the UK makes conditions worse for consumers because it kills competition, it flattens prices and everyone gets the same cookie cutter outcome," he said.
The review of the energy market, headed by former Labor minister John Thwaites and former Liberal minister Terry Mulder, is due to report to the State Government by the end of next month.
Energy Minister Lily D'Ambrosio said the Government would take its recommendations seriously.
"We want to make sure that competition is actually working and delivering good results to consumers," she said.
Topics: states-and-territories, electricity-energy-and-utilities, community-and-society, melbourne-3000, vic