Safeguards for energy users

The following letter was published in The Australian Financial Review on 12 October 2009. I reproduce it here for your enjoyment.

In your "Radical plan to guarantee energy supply" (October 9), much was made of the Australian Energy Market Commission’s recommendation to support greater flexibility in retail energy pricing.

Energy retailers praised the move arguing that the additional flexibility proposed by the AEMC should be seen “as a minimum”.

There was no coverage, however, of the fact that the AEMC emphasised the need for best-practice consumer protections as an important safeguard in a retail market characterised by rising prices under the Carbon Pollution Reduction Scheme and a more flexible price setting mechanism.

Energy is an essential service that all Australians require to participate effectively in society. Once the CPRS comes into force, compensation through the tax and transfer system will be insufficient on its own to protect the most vulnerable energy consumers from impending CPRS-related price increases.

A robust consumer protection framework is needed which provides consumers with access to payment plans and other hardship assistance as well as protecting them from unfair disconnection.

Victoria, the nation’s most competitive energy market with the most flexible price setting arrangements, provides a good model for the national consumer protection regime currently being considered by the ministerial council on energy.