In the wake of the collapse of local green energy retailer, Enova, the NSW government say they are considering underwriting small energy retailers who face unfair market competition from large retailers who also generate electricity.
Last week, the board of Enova Community Energy placed Enova Community Energy and Enova Energy (the retail electricity business that provides electricity) into voluntary administration.
Local MP, Tamara Smith (Greens) asked Minister for Energy, Matt Kean, in Question Time last week what he is doing to prevent Enova and other small green energy retailers from going bust.
He replied that the Electricity Infrastructure Roadmap, which was a bipartisan effort, will help drive prices down.
‘What we need to see is small, innovative retailers like Enova Community Energy. They are critically important’.
‘We need them so that we have got a competitive retail market in NSW.
‘The government is disappointed to hear that it has entered into voluntary administration. That is particularly challenging for Enova staff. There is a national scheme in place to make sure that, when energy retailers go into administration, their consumers are protected.
‘This scheme is known as the Retailer of Last Resort scheme, which makes sure that customers always have a retailer and receive supply.
Last Resort scheme
‘To ensure ongoing competition in the market, NSW has joined with other states and territories to ask the Australian Competition and Consumer Commission (ACC) and the Australian Energy Regulator (AER) to report back to energy ministers in July on recent market dynamics, with a particular focus on bidding behaviour.
‘We need to ensure that all participants in the market are complying with their obligations under energy and competition law.
‘The government looks forward to receiving the results of that urgent body of work’.
Minsiter Kean added that a number of smaller retailers ‘have been impacted by the credit crunch that has been occurring as a result of the huge increase in wholesale electricity prices and the introduction of the price cap’.
‘We need to protect those small retailers’, he told parliament. ‘Otherwise, we are going to undo a decade’s worth of competition reform in the energy sector’.
‘That is not something that anyone wants to see because that means less competition and higher prices for consumers. [Federal Labor] Minister Bowen and I are aligned on this.
‘We want to work through these issues. We are looking at various options, for example, potentially an underwrite of small retailers.
‘That is one of the ideas that I floated with Minister Bowen, and he also has a number of initiatives.
‘We will get together with all the energy Ministers around the country to make sure we protect our small energy retailers so that we can continue to have a competitive market’.