Gas Week

EWN Publishing

IPART plan: small off-grid monopoly generators obliged to supply at standard rates, on a continious basis

Posted by gasweek on 25 September, 2007

The NSW Independent Pricing and Regulatory Tribunal, response to the precedents set by the GridX Power Pty Ltd retailer supplier licence application argued that GridX could not withdraw supply once a customer was connected. Prevention of misuse of market power: GridX’s customers can not receive supply under standard form customer contracts nor do they have the ability to choose an alternative supplier and receive the benefits of competition. These customers will be supplied by a bundled monopoly supplier and, as a consequence, may be vulnerable to the misuse of market power.

Wholesale competition, not retail:IPART said “While islanded networks such as GridX proposes will provide competition at both the generation and network levels, they will not provide customer choice at the retail level where the network operators will effectively operate as monopoly energy suppliers. This raised two key issues:

• should GridX be obligated to supply customers connected to its islanded networks, and

• how to prevent GridX from misusing the market power as a monopoly supplier.

Proposed solutions:

• as there was a potential for customers to be stranded without supply of an essential service, adn this was “clearly unacceptable”. therefore, a “supply obligation should be included in any licence granted to GridX”.

Reference: Independent Pricing and Regulatory Tribunal, GridX Power Pty Ltd – retailer supplier licence application. Electricity Licensing – Consultation Paper, May 2007. Inquiries regarding this document should be directed to a staff member: Gary Drysdale Phone: (02) 9290 8477 Email: gary_drysdale@ipart.nsw.gov.au Website: http://www.ipart.nsw.gov.au

Erisk Net, 21/8/2007

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