The NSW Government formed the NSW Gas Retail Competition Working Group (the Working Group) to identify any barriers to competition in the NSW gas market, and opportunities, where possible, to address these barriers.

The Working Group was made up of representatives from gas retailers, transmission and distribution networks, large customers, residential and small business stakeholder groups, industry stakeholder groups, various NSW Government agencies, and the Energy and Water Ombudsman NSW.

The Working Group met three times (October 2015, December 2015, and February 2016) to discuss their experiences and ideas for improving competition in the NSW retail gas market, with a particular focus on improving competition in the retail gas market in regional NSW.

Read the Final Report of the Working Group.

Outcomes of the Working Group

The Working Group recommended the following high level principles, to inform the NSW Government’s approach to NSW gas market reform:

  • Commercial transactions should not be priority areas for intervention.
  • Any NSW Government led reform should not duplicate existing work being undertaken in the market.
  • Where appropriate, market reform should be driven by industry (in consultation with consumer stakeholders) instead of through regulatory processes.
  • Reform should support better outcomes for consumers.

The report also listed a number of actions for the Government to consider to help remove barriers to competition, noting that some actions will require a cooperative and collaborative resolution at the national level through the Council of Australian Governments (COAG) Energy Council. The seven actions which were discussed at the Working Group were:

Working Group Actions NSW Government Response
1. Drive prompt response to the AEMC and the Australian Competition and Consumer Commission (ACCC) reports through the COAG Energy Council, prioritising actions that reduce barriers to pipeline access and new retailer entry. Following publication of the ACCC report in April 2016 and the AEMC report in July 2016, the COAG Energy Council provided its response at its 19 August 2016 meeting.
2. Consider whether the expansion of rebates to liquid petroleum gas (LPG) would have a meaningful impact on competition, particularly examining the extent to which regional consumers actually substitute between reticulated natural gas and LPG. On 28 May 2016, the NSW Government announced that the $90 NSW Gas Rebate would be expanded to include households that relied upon reticulated or delivered LPG for heating, cooking and powering their hot water systems, and that are not connected to a natural gas distribution network. See Gas Rebate for on-supplied gas and delivered, bottled LPG.
3. Solutions to support vulnerable customers’ choice of fuel should not lock customers in to using gas at a time of uncertain pricing and supply.

The Government supports competition and choice. It provides a range of financial assistance and information to improve the efficient use of both electricity and gas. Actions we are undertaking to help customers improve their energy efficiency and reduce bills include:

  • rebates for both electricity and gas/LPG customers on low incomes
  • inclusion of both electricity and gas savings in the Energy Savings Scheme
  • helping low income households to access energy-saving appliances and home improvements through the Home Energy Action Plan
  • making it easier for consumers to decide on the best energy-efficient appliance to buy through the Smarter Choice program
4. Develop and implement an education campaign, with a regional focus. The NSW Government is currently developing a targeted communications plan to educate regulated price customers on the upcoming changes with a focus on regional area customers.
5. Retail gas price deregulation. On 23 September 2016, the NSW Government announced that retail gas prices will be deregulated on 1 July 2017.
6. Pursue the alignment of the pipeline and short term trading market (STTM) nominations timings to allow daily gas market to set the price prior to notifying the pipeline/upstream gas supplier of the volume of gas required to be shipped. This issue is currently being looked at by the AEMC’s open rule change: Gas day harmonisation. More information is available on the AEMC’s website.
7. Aim to simplify the paperwork to become a gas participant, where possible. This is to encourage more retailers and other parties to enter the market. The NSW Government is looking at options to streamline paperwork both within NSW and national regulatory frameworks.