Types of energy contracts

Households and small businesses can choose to be supplied gas under one of the following types of contracts:

  • Standard contract – all retailers are required to offer customers a standard price offer. These prices are set by the retailer and can only vary once every 6 months. Retailers have to adhere to a robust set of customer protection rules. The terms and conditions of these contracts are set in legislation. These contracts have no end date.
  • Market contract – any retailer can offer customers gas priced under a market offer. The price is generally set by the retailer and often the contract period is fixed, but the retailer may offer incentives such as pay on time discounts or levy charges such as exit fees. Prices under a market contract can change at any time, so long as the retailer notifies the customer in line with the national energy rules and it is in accordance with the contract. Retailers have to adhere to a robust set of customer protection rules.

Retail gas prices are deregulated

On 1 July 2017, the NSW Government deregulated retail gas prices.

Households and small businesses can continue to buy gas under standard contracts and market contracts.

Just like with electricity, the removal of retail gas price regulation will promote greater competition in the market, encourage more retailers to operate in NSW and offer a range of gas deals. Almost 80 percent of households and small businesses have already moved off the regulated price and onto a market or standard contract.

Frequently asked questions about retail gas price deregulation

How are retail gas prices set after deregulation?

Previously, AGL, ActewAGL and Origin were required to offer regulated prices which were agreed with the NSW Independent Pricing and Regulatory Tribunal (IPART). Now, all gas retailers set their own prices, as they do already for their market contracts. The only thing that is different is that AGL, ActewAGL and Origin are no longer required to offer a regulated price.

However, the NSW Government has asked IPART to forecast retail gas prices for two years: 2017-18 and 2018-19. This will help customers and the Government benchmark retail price movements now that retail prices are deregulated.

The NSW Government has also expanded IPART's existing Market Monitor activities to include gas. In its role as Market Monitor, IPART conducts annual reviews to make sure that competition is still effective in NSW. In addition to IPART's role, the Australian Energy Market Commission (AEMC) also conducts annual reviews on gas and electricity market competition conditions.

The monitoring of both the electricity and gas market provides the NSW Government with advanced warning of any changes in competition. This allows the Government to act to ensure customers continue to benefit from a competitive market.

I am a household or small business. What does retail gas price deregulation mean for me?

There will be no change for customers who have already moved to a market contract. This applies to the majority of customers in NSW.

For 'small customers' (that is, households and small businesses using less than 1 terajoule of gas per year) who remained on regulated contracts after 1 July 2017, after gas price regulation is removed the Government has ensured price protections apply for a two year transitional period.

Will my rights or gas supply change?

Existing customer protection measures have not changed with the introduction of retail gas price deregulation.

Customers still have access to the NSW Gas Rebate, Energy Accounts Payment Assistance (EAPA) scheme, hardship programs, and payment plans. There are also protections around disconnection.

The NSW Government has expanded the Independent Pricing and Regulatory Tribunal's (IPART) existing market monitoring activities for electricity, to include gas. IPART conducts annual reviews to make sure competition is still effective in NSW.

The monitoring of the gas market provides the NSW Government with advanced warning of any changes in competition.

This allows the Government to act to ensure customers continue to benefit from a competitive market.

What do I need to do?

Nothing. From 1 July 2017, when deregulation began, any changes for customers who remained on the regulated price, will happen automatically.

If you want to look around for a new offer, the Australian Energy Regulator offers a free and independent comparison service called "Energy Made Easy" at www.energymadeeasy.gov.au.