The Victorian government has legislated to remove all price caps on retail electricity prices and gas rates from the 1st of January 2009.
The Victorian government was previously responsible for setting the maximum that Victorian electricity companies and Victorian gas suppliers were allowed to charge to consumers.
Victorian energy companies will be unconstrained from 2009 in what they are able to charge Victorian households and small businesses for their electricity and gas usage.
The Victorian government has kept a close watch on gas rates and electricity prices being charged to consumers by Victorian energy suppliers. This new legislation has been put into place after a review by the Australian Energy Market Commission (AEMC) found that Victorians had benefited from the increased market competition, where Victorian gas and electricity suppliers strived to offer the cheapest electricity and gas prices and offered the best customer service.
By the removal of retail price regulation in Victoria, consumers could benefit more by enabling them to choose from a wider range of energy products and options, (including tariff innovation) that is currently in place. There is no need for retail price regulation where competition is facilitating the delivery of efficient outcomes.
As reported in the Australian Financial Review this new legislation will enable small consumers and businesses to 'shop around among more than 10 retailers for the most competitive prices.'
By removing these price caps it may open up the market, making it more competitive for Victorian gas companies and Victorian electricity providers, however, the cost of electricity and gas to Victorians may increase, as the removal of the energy price capping system removes any protection energy consumers may have against vagaries of the Australian wholesale energy market often brought on by drought and ever changing weather patterns.
Gas suppliers and electricity providers have been bearing the brunt of the increasing cost that comes with clean energy. The consumer without the security of price caps may feel these crippling costs more directly.
Once carbon trading is established, the cost of 'black power' will increase, forcing gas and electricity suppliers to pass the rising cost onto consumers. As a result, consumers could be forced to rethink their energy consumption, and consider alternative green energy.
Here at Rate Detective we can help you to save on your electricity and gas bills. Find out how much you can save by comparing electricity and gas in Victoria.