‘Full retail competition’ means that Tasmanian residential and small business customers will, for the first time, be able to choose their electricity retailer. Currently, residential and small business customers can only contract with Aurora Energy for their electricity supply. Tasmanian electricity customers who use more than 50 megawatt hours per year can already choose their retailer. However, the majority of customers use less than this amount of electricity. Competition is about providing choice to all customers, large and small.
The introduction of competition is a key part of the Tasmanian Government’s broader energy reform agenda. Competition is about providing choice in the electricity market for all customers. Choice brings competition between providers and will benefit customers through the availability of new and innovative products and services that better meet customers’ needs, as well as placing downward pressure on prices.
The Tasmanian Government has decided that the best way to bring about robust competition in the Tasmanian retail electricity market from the commencement of full retail competition is to sell Aurora Energy’s existing customer base to private sector retailers who wish to offer their products and services in the State. This means that Aurora Energy will no longer operate in Tasmania as an electricity retailer after 1 January 2014, as all of its current customer contracts will be transferred to the purchasing retailers.
Aurora’s role in managing the Tasmanian distribution network will continue, but these functions will be merged with Transend Networks’ transmission functions from 1 July 2014 under a new, integrated network business structure.
To make best use of Aurora’s previous investments in retail services, its current retail functions will be merged with those of Hydro Tasmania’s mainland retailer, Momentum, once the transition of retail customers to new retailers is complete.
No. Hydro Tasmania’s generation assets and the transmission and distribution networks – the ‘poles and wires’ – will all remain in public ownership. The only ‘assets’ that will be sold are Aurora’s Tasmanian retail customer contracts.
Work is already well underway to prepare the Tasmanian market for the introduction of full retail competition on 1 January 2014. To be in position to commence competition from this date, the sale of Aurora’s customer base will need be finalised by the second half of 2013. The Tasmanian customer base will be sold in two main ‘bundles’, with each bundle to be purchased by a different new retailer.
On 1 January 2014, all of Aurora’s existing customers will be automatically transferred to one of the new retailers under the same terms and conditions as they previously had in place with Aurora.
Customers will be transferred to one of the new retailers based on the local government area (LGA) in which they live. For example, customers who live in the Launceston LGA may be transferred to one retailer while customers who live in the Burnie LGA may be transferred to the other.
The actual retailers that will be entering the market will not be known until the Government has completed the sale process. However, all customers will be notified well in advance of 1 January 2014 of who their new retailer will be and the arrangements that will apply from the commencement of full retail competition.
Aurora Energy will no longer exist as a retailer in Tasmania after 1 January 2014, so you cannot choose to stay with Aurora when competition is introduced. Your existing contract with Aurora will be acquired by one of the new purchasing retailers and you will be automatically transferred to that retailer under your contract’s existing terms and conditions. This transfer is provided for under Tasmanian legislation, approved by the Parliament earlier this year.
Currently, residential customers do not have a choice about which retailer they purchase their electricity from – they must contract with Aurora Energy. Some people may not like the idea of being transferred to a new retailer without having any say in who that retailer is, but this is a necessary step to allow greater choice for all consumers into the future under the new full retail competition arrangements.
What choices will I have from 1 January 2014? When will I be able to shop around for a deal with another retailer?
Because of the way the National Energy Market works, the move from the current arrangements with only one retailer to full retail competition – where multiple retailers all compete for customers – is technically complex. It will take a while to establish all the necessary market processes and administrative arrangements for customers to be able to switch freely from one retailer to another.
Therefore, the Government is putting in place a staged approach to FRC. There will be four stages to full retail competition transition, where customers will be progressively given more choices about their electricity retailer and product offerings. This will give both customers and retailers a chance to get used to the new Tasmanian market environment.
Stage 1 (1 January 2014 to 30 March 2014)
During the initial three months of competition, you must remain with your assigned retailer. You can either choose to stay on your standard retail contract on the same terms and conditions as when you were with Aurora or you can take up a new ‘market offer’ from your new retailer. The differences between ‘standard retail contracts’ and ‘market offer contracts’ are explained in more detail below.
You are under no obligation to take up a market offer from your new retailer. If you do nothing you will continue to be provided electricity by your new retailer under their standard retail contract, which will be the same as the one you had with Aurora before 1 January 2014. In fact, if you choose to do nothing, you will probably notice very little difference between your previous arrangements with Aurora and the arrangements with your new retailer, aside from who bills you for your electricity use.
Stage 2 (1 April 2014 to 30 June 2014)
During this period, you will have some additional choices. You will be able to:
- Remain with your assigned retailer on either their standard retail contract or on a market retail contract; or
- Move to the other purchasing retailer on either their standard retail contract or on a market retail contract;
While you will be able to switch between the two new retailers during this period, technical constraints on how customers are transferred from one retailer to another will limit to 1000 the number of customers that can be transferred in any month. If this limit has been reached and you apply to switch retailers, you will be put on a waiting list and transferred as soon as is technically possible.
Stage 3 (1 July 2014 to 31 December 2014)
From 1 July 2014, you will be free to choose any type of contract offering with any retailer that is offering retail services in Tasmania, and not just the two retailers that bought Aurora’s customer contracts. However, the 1000 customer per month transfer limit will still be in place during this time.
Stage 4 (1 January 2015 onwards)
From 1 January 2015, the limit on the number of transfers that can occur in any given month will be removed and you will be able to choose any product offering from any retailer operating in Tasmania.
Please see Introduction of full retail competition Fact Sheet for more information.
You don’t need to do anything at this stage. Aurora Energy will contact you directly if you need to do anything between now and 1 January 2014.
However, you may like to gain an understanding of:
- how much electricity you use – check your bill history;
- how you use electricity – take notice of when and how you use electricity around your house or business;
- how your bill is calculated – check the fixed and variable charges; and
- how you can save energy.
Then when competition commences, you will have an understanding of your circumstance and will be in a position to make a more informed decision about whether you would like to take up a particular offer from a retailer.
If you choose to do nothing, you will continue to be supplied by your new retailer under a standard retail contract at prices that are set by the Tasmanian Economic Regulator. This is the same as the current arrangements you have with Aurora.
Effectively, if you choose to do nothing the only thing that will change for you as a customer is that it will be your new retailer – and not Aurora – that bills you for the electricity you use.
Your electricity supply will not be cut off and you do not have to arrange for a connection with your new retailer – your account will be transferred to your new retailer automatically.
Will I still receive my electricity concession? Do I have to re-apply to my new retailer for my concession?
Yes, all existing electricity concessions will be retained and will be available to eligible customers regardless of their retailer. The Government is also introducing some improvements to the existing concessions regime, including an increase to the rates applied to the Life Support Discount and a new Medical Cooling Discount for eligible customers. You can find further details on all available concessions in the Tasmanian Government’s Electricity Concessions Fact Sheet.
Information on those customers that are eligible for concessions will be transferred directly from Aurora to the new retailers from 1 January 2014. This means that you will not need to re-apply to your new retailer to receive your concession, it will continue automatically. However, if you move to another retailer at a later date, you may need to advise them that you are a concession customer as part of the transfer process in order to ensure that you continue to receive your concession.
The relevant concession amount will continue to be deducted directly from your electricity bill by your new retailer, like Aurora currently does. The Government will have an arrangement in place to reimburse retailers for providing concessions on eligible customers’ electricity bills. This means you do not have to worry about claiming your concession back from the Government.
Life support customers are provided with special protections under national energy retail law, which include specific protections against disconnection. These protections will be unaffected by Tasmania’s move to FRC. For further details, see the Customer Protection Tab under ‘Consumers’ – Link.
The only change for Life Support customers will be an increase in the concession provided to eligible customers. Further information on this can be found in the Tasmanian Government’s Electricity Concessions Fact Sheet.
An electricity retailer is a company that buys electricity on your behalf from the National Electricity Market. The electricity retailer also pays the network companies to deliver electricity through the poles and wires and provides you with a single bill.
For the first six months of competition, there will be only two retailers that will be allowed to sell electricity to residential customers – the retailers that have bought Aurora’s customer contracts. However, from 1 July 2014, other new retailers may choose to offer products and services to Tasmanian residential customers.
Under competition, you will be choosing the electricity retailer who sells electricity to you based on an offer that is made to you. You will not be choosing the companies that generate your electricity or physically deliver electricity to your house. Therefore, the quality or reliability of your electricity supply will not change if you switch between retailers.
Electricity retailers may eventually compete on more than just price. The structure of the tariffs may vary; electricity retailers may wish to sell you both gas and electricity and make billing simpler; they may offer you monthly or quarterly billing; and they may offer you other services such as advice on how to save energy.
Under full retail competition you will have a choice between two broad contract types – a ‘standard retail contract’ and a ‘market retail contract’. The differences between the two contract types are explained below.
All retailers are required to have available what is called a ‘standard retail contract’, the terms and conditions of which are standard and set out under the National Energy Retail Law. A retailer must offer its standard retail contract at its ‘standing offer’ prices to customers for which it is the ‘designated retailer’. The retailer’s standing offer prices are determined by that retailer.
In Tasmania, the Government will also require that every customer is assigned a ‘Regulated Offer Retailer’ that is required to make an offer to supply electricity to that customer under its standard retail contract at regulated prices, which are determined by the Tasmanian Economic Regulator. Who your Regulated Offer Retailer is will depend on where you live and whether they you have an existing connection or are seeking to establish a new connection. You will be provided with more information on your Regulated Offer Retailer and their obligations closer to the commencement of full retail competition.
Retailers will generally also have available a number of what are called ‘market retail contracts’. These kinds of contracts allow the retailer and the customer the flexibility to voluntarily enter into arrangements outside the standard retail contract arrangements. The prices, conditions and duration of market contracts are determined by the retailer that is offering them, but in order to protect customers retailers are still required to comply with certain minimum standard requirements under the National Energy Retail Law.
A standard retail contract will be ongoing. The price of the contract may be varied over time in accordance with the rules set out under the Tasmanian regulatory framework, as is currently the case with the price that you pay to Aurora.
Market retail contracts will typically be offered on a fixed term basis – this could be for 12 months, 2 years or longer. You can terminate a market contract early but the retailer may charge you a fee for doing so. Make sure you know what the penalties are before you enter into the contract.
Different customers will have different needs and priorities in terms of what they want from an electricity supply contract. Customers will need to make decisions based on what best suits their own circumstances. You will have to look carefully at what electricity retailers are offering you in the contract to see whether you will be better off. However, the kinds of terms and conditions that you should look at when comparing all contracts include:
- the price you pay;
- whether you must pay a security deposit;
- how and when you will be billed;
- when you must pay;
- length of contract and penalties for ending the contract early;
- details on disconnection and reconnection; and
- the price you pay for your electricity as shown on your bill will be set by the type of contract that you are on.
Ensure that your electricity retailer explains to you exactly how much you have to pay and whether there are any other costs before you agree to a contract.
No. There are national laws in place that require that there is always a retailer – your ‘designated retailer’ that is obliged to offer you electricity supply under a standard retail contract at their standing offer price. The Tasmanian Government is putting in place additional provisions that ensure that an offer is always available with at least one retailer at the prices that have been determined by the Tasmanian Economic Regulator. Your ‘designated retailer’ may vary depending on where you live and whether you have an existing connection or are seeking to establish a new connection.
As explained above, retailers will have flexibility in setting their prices for market offer contracts. Competition between retailers offering different products and services at different prices is one of the key advantages of FRC for consumers. However, the Government will ensure that all small customers also have the right to be supplied electricity on a standard retail contract at prices that are set independently by the Tasmanian Economic Regulator. This means that you if you do not like the prices or conditions offered by retailers under their market offers, you always have a ‘fallback’ option where the prices are set according to what the Regulator considers to be a fair and reasonable in the context of what it costs the retailer to supply you with electricity.
Yes. At the conclusion of any contract arrangement you might have entered into, you have a right to go back to an arrangement where you are supplied with electricity under a standard retail contract, the prices of which will be regulated by the Tasmanian Economic Regulator.
No. Your electricity use can continue to be measured by your existing meter.
However, if you are a PAYG customer, your meter will be replaced – at no cost to you – sometime over the next three – six months if you have been advised that your PAYG meter is faulty or has a faded display.
Aurora currently reads your meter as part of its functions as the distribution network service provider, not as your retailer. Until Aurora’s distribution functions are merged with Transend’s transmission functions on 1 July 2014, personnel from Aurora’s distribution arm will still read your meter. From 1 July 2014, meter reading will be undertaken by the new, state-owned integrated network (distribution and transmission) business.
Aurora Pay As You Go is also being sold to a new retailer, the same as Aurora’s standard contract customers. Pay As You Go is to be sold to one of the same retailers that buys some of the standard contract customers.
Pay As You Go will continue as an unregulated product, but customers will maintain the right to transfer back onto a regulated standard contract if they wish.
Are there minimum standards that retailers have to comply with? How do I know my rights as a customer?
As an electricity customer you are already protected by existing Tasmanian and Australian Consumer Law, as well as by specific electricity-related provisions under the National Energy Retail Law. These protections will be unaffected by the introduction of full retail competition in Tasmania.
What if I have a problem with my electricity retailer? If I think I’ve been treated unfairly, or have some other complaint, or I can’t pay my bill, who do I contact?
All electricity retailers are required to have appropriate complaint resolution procedures in place. If you have a complaint you should always contact your electricity retailer first to try and resolve the issue.
If you cannot resolve a dispute with your electricity retailer, you can contact the Tasmanian Energy Ombudsman on 1800 001 170 or online at www.energyombudsman.tas.gov.au The services provided by the Ombudsman are free to consumers and the Ombudsman has the power under relevant laws to make a decision with which the electricity retailer must comply.
Any outstanding amounts that you owe to Aurora Energy will be transferred to your new retailer, who will be entitled to collect them from you when they acquire your customer contract.
Any active payment plans at 1 January 2014 will be transferred to your new retailer on the same terms and conditions as the plan that you had with Aurora. The only thing that will change is the retailer to which you are required to make your payments.
The Government understands that customers who currently receive payment from Aurora Energy for the electricity they export from their small-scale systems will be keen to know what will happen to these arrangements when Aurora is no longer operating in the Tasmanian retail market.
The Government is still considering a range of options with regard to the specific feed-in tariff arrangements that will apply from 1 January 2014. The current voluntary scheme will clearly need to change to reflect Aurora’s exit from the market. However, the Government is committed to ensuring that existing and new connection customers will receive a fair and reasonable rate for any electricity they export to the grid.
There are a range of issues that the Government needs to take into account before finalising its position, including:
- the benefits to electricity customers and electricity businesses;
- the potential impact on electricity prices and/or cost to the Budget; and
- commitments made at a national level, including through COAG.
The Government is taking advice on this issue from a range of sources and will be announcing its position soon.
What happens if my retailer is unable to continue to supply electricity, for example if they go out of business?
There are national arrangements in place to deal with the unlikely scenario where a retailer is unable to continue to service its customers, which involves another nominated retailer stepping in on a temporary basis to continue to ensure that the affected retailer’s customers continue to be supplied electricity. This retailer is called a ‘retailer of last resort’ and is appointed by the Australian Energy Regulator based on their proven capacity to take on additional customers at short notice.
The best place to visit in the first instance is the Tasmanian Government’s Energy Reform website where you can find:
- current news and updates on the status of the Reforms;
- Fact Sheets on a range of issues and topics; and
- links to other relevant websites, such as the Australian Energy Regulator, the Tasmanian Economic Regulator etc.