In a study published in the December issue of Economic Papers, economist Lynne Chester says that, eight years since the national electricity market was announced formally, it is “national in name only”.
She argued the trend actually has been the other way, with a small number of generating companies dominating the areas in which they operate, the 19 retail companies in 1995 falling to eight and the reintegration of generation with retail operations.
Limited capacity for interconnections across state borders means there are live regional markets rather than one national market. Competition is supposed to keep prices down but instead Chester has found evidence of price manipulation by the large generation companies.
Prices for residential consumers have gone up in real terms “and the immediate outlook is for further increases”, she wrote.