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PM asks watchdog to investigate power prices

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The Turnbull government hopes a review of the country's electricity market by the consumer watchdog will lead to cheaper power prices.

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Prime Minister Malcolm Turnbull has ordered the Australian Competition and Consumer Commission to review retail electricity prices, saying the market doesn’t appear to be operating as effectively as it could.

The commission will scrutinise electricity retailer behaviour and contracts offered to consumers and business to ensure they benefit from competition in the National Electricity Market.

“The Turnbull government is determined to ensure Australians get a better deal for their energy,” Turnbull said in a joint statement with Treasurer Scott Morrison today.

“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 envisaged the inquiry would lead to reduced power bills for households and businesses.

“Certainly that is our hope,” he told ABC radio.

“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.”

Given the review will be data-intensive and of a complex nature, the ACCC will be given until June 30 next year to undertake the review.

However, the commission will need to produce a paper within six months on its preliminary findings into the strategies and pricing behaviours of key electricity retailers.

It will work with the Australian Energy Regulator and the Australian Energy Market Commission in undertaking the inquiry.

The government says recent research by a number of organisations has highlighted significant concern about the causes of recent electricity price increases on the east coast.

These include from the Australian Energy Market Commission, Energy Consumers Australia and the Grattan Institute, as well as submissions to the COAG’s review into energy markets, chaired by Alan Finkel.

Market review terms of reference

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.

– AAP

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