What is changing?
Tasmania is entering into full retail competition, which means that all residential and small business customers will, for the first time, be able to choose their electricity retailer. Currently, Tasmanian customers can only contract with Aurora Energy for their electricity supply. From 1 January 2014 Aurora Energy will no longer operate in Tasmania as an electricity retailer and will be replaced by at least two competing private sector retailers. In order to fulfil this, all residential and small business customer contracts with Aurora will be sold in two main ‘bundles’ by the second half of 2013 to these retailers.
On 1 January 2014, all 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 in which they live.
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 that date.
From 1 January 2014, these initial private sector retailers will be able to offer new products and prices to customers who choose to move to these products, as well as the existing regulated tariffs.
From 1 July 2014, any retailer will be able to offer new products to customers.
What will full retail competition do for me?
Currently, residential and small business customers do not have a choice about which retailer they purchase their electricity from – they must contract with Aurora Energy. Full retail competition means that customers can choose their retailer based on their personal requirements. For example, customers can move retailer as often as they like to better meet their needs, such as lower electricity price offerings, services or tariff structures, and at the same time place downward pressure on prices.
What choices will I have under full retail competition?
From 1 January 2014, the Tasmanian electricity market will begin to be opened to competition, which means there will be more than one electricity provider competing for customers and offering a selection of electricity products. Over time, customers will have greater choice by being able to choose between a number of retailers to find a product or price that best meets their needs.
Once full retail competition commences, you will also 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:
Standard Retail Contract
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, with prices determined by that retailer.
The Tasmanian Economic Regulator will also set a regulated price which the two purchasing retailers are required to offer. This means that everyone will have access to a safety net electricity price set by the Regulator. No retailer can charge prices for electricity that is higher than the contract price set by the Regulator.
Market Retail Contract
Retailers have the choice to make available a number of what are called ‘market retail contracts’ to customers. 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.
When can I transfer between different retailers?
Under full retail competition all customers will have the ability to transfer between any retailer that operates in Tasmania. However, the move from Aurora to new, competing retailers, is technically complex and 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 establishing full retail competition. There will be four stages to full retail competition transition, where you will be progressively given more choices about your electricity retailer and product offerings. This will give both customers and retailers a chance to get used to the new Tasmanian market environment.
From 1 January 2014 to 31 March 2014, you will 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.
From 1 April 2014 to 30 June 2014 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 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 in the early months of FRC will limit the number of customers that can be transferred in any month to 1000.
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 apply during this time.
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.