The Australian Capital Territory (ACT) has one network distribution area – Evoenergy. Multiple retailers compete for small customers. The Independent Competition and Regulatory Tribunal (ICRC) regulates the maximum electricity standing offer for ActewAGL Retail in the ACT.


  • The median residential offer increased by seven per cent in the ACT from March 2019 to March 2020.
  • There was an eight per cent fall in the number of small ACT residential electricity customers on the standing offer in the year to December 2019, the biggest change in the NEM over that period. The median standing offer price increased by one per cent.
  • Residential customers on the median standing offer could save $522 by switching to the minimum market offer.
  • In the ACT two new retailers entered the electricity market – Powerdirect and Simply Energy – bringing the total of retailers in the ACT to nine. The market share of ActewAGL Retail has fallen from 85 per cent to 81 per cent, and the ACT was the only jurisdiction to have an increase in the switching rate over the past 12 months.
  • The ACT continues to have the lowest rate of switching at just over 10 per cent compared with 21 per cent in Victoria, but shopping around is now more important than ever. The ACT was the only jurisdiction to have an increase in price dispersion – by 32 per cent, increasing the gap between the highest and lowest priced offer to $1,000.
  • Residential customer satisfaction with the level of customer service has increased by one per cent to 63 per cent, while value for money has increased by 13 per cent to 53 per cent between April 2019 and 2020.
  • The number of residential customers on hardship programs increased by 464 during 2018-19 to almost 2,100, and the proportion of customers on hardship programs increased from 0.57 per cent to 0.76 per cent of all small customers. The level of debt customers had when they entered the scheme decreased by 15 per cent to $1,376.

Looking forward

  • Prices for ActewAGL’s Standing offers will continue to be set by the ICRC. The ICRC’s draft decision for prices from 1 July 2020 was for ActewAGL’s regulated standing offer price to decrease by 6.7 per cent.
  • The AEMC will monitor the development of competition in the ACT and provide information to the ACT Government on any actions relevant to their own regulated price regime.


The ACT’s electricity market is the smallest in the NEM, and its gas market is the second smallest.

For the electricity market:

  • in March 2020, there were nine electricity retail companies and 10 brands
  • these companies supply approximately 190,000 small electricity customers, as of December 2019
  • Powerdirect and Simply Energy entered the ACT market over the past year.

For the gas market:

  • there were three gas retail businesses and brands in March 2020
  • these brands supply approximately 127,000 small gas customers, as of December 2019
  • no new gas retailers have entered the market since March 2019.

The ACT introduced full retail contestability for gas in 2002 and for electricity in 2003. At this time, it removed retail price regulation for gas but retained it for electricity. The Independent Competition and Regulatory Commission set regulated standing offer electricity prices. The ACT adopted the National Energy Customer Framework (NECF) on 1 July 2012.

Retail market structure

The structure of a market influences the conduct of its participants and in turn the performance of the participants and outcomes for consumers as a whole. The Commission analyses a range of factors, including market concentration, customer switching and barriers to entry, expansion and exist to assess market structure. The key findings of this analysis for the ACT are outlined below.

  • Electricity market concentration, as measured by the Herfindahl-Hirschman index (HHI), declined by 12 per cent (970 points) to 6,908 from July 2018 to June 2019.
  • The ACT remains the second most concentrated market in the NEM based on the HHI, as it has been since 2011.
  • Gas market concentration, as measured by HHI, declined by 13 per cent (1,035 points) to 6,992 from July 2018 to June 2019. The ACT is the fifth most concentrated gas market.

Changes in retail market concentration by jurisdiction are set out in the figure below. It shows the retail electricity market in the ACT has become less concentrated over time.

Market share graph - electricity

Market share (%)
HerfindahI-Hirscgman Index (HHI)

Source: AER and ESCV, AEMC analysis Notes - Queensland refers to the South East Queensland region. The market share measures (and related HHI calculations) were taken from the fourth quarter of each financial year, except in 2019-20 where only two quarters of data was available.

Market share graph - gas

Market share (%)
HerfindahI-Hirscgman Index (HHI)

Source: AER, ESC, and AEMO, AEMC analysis

Independent rivalry

Consumer switching activity can provide an insight into the level of independent rivalry among retailers in a market and also influences levels of market share, market concentration and barriers to entry and expansion. Information about consumers switching between different types of retailers (such as switching from one Big 3 to another, or from the Big 3 to tier 2 retailers) provides an indicator of progress in achieving effective competition in a market. Further, the rate of switching between the Big 3, and from tier 2 retailers to the Big 3, provides an insight into how effectively retailers who have historically enjoyed the benefits of incumbency are competing for consumers.

Overall switching decreased across the NEM but increased in the ACT over the past year. Switching was predominantly from ActewAGL to Origin and EnergyAustralia. Switching rates between retailer types is shown in the figure below.

Consumer switching within and between retailer tiers, yearly average between 2013 to 2019

Switching rate %

Source - AEMO data. AEMC analysis. Notes - Queensland refers to South East Queensland. Big 3 in the Australian Capital Territory includes ActewAGL.

Retailer views on market structure

In addition to examining observable market share data and trends, the AEMC conducts a retailer survey and interviews to obtain insights from retailers of various sizes about what they believe is affecting market structure, the state of competition in the energy market and factors that retailers consider will influence the market in the future.

A number of retailers considered that the small size of the ACT market remains a barrier to entry.

Retailers indicated on a scale of 0 to 100 how much of barrier to entry and expansion access to competitively priced hedging, retail licence arrangement/regulations, and market power of incumbent are in each jurisdiction.

With 0 not being a barrier and 100 being a strong barrier, retailers indicated the following barriers to entry into the ACT as:

  • access to competitively priced hedging = 30 (lowest in the NEM)
  • retail licence arrangement/regulations = 40 (fourth lowest in the NEM)
  • market power of incumbent = 71 (second highest in the NEM)

With 0 not being a barrier and 100 being a strong barrier, retailers indicated the following barriers to expansion into the ACT as:

  • access to competitively priced hedging = 25 (lowest in the NEM)
  • retail licence arrangement/regulations = 30 (second lowest in the NEM)
  • market power of incumbent = 50 (second lowest in the NEM)

Pricing practices

The AEMC examines how retailers compete for customers through price and non-price offerings in relation to small consumers in both the electricity and gas markets.

To analyse pricing behaviour, the Commission examined a range of possible bill outcomes for a representative South East Queensland customer as follows:

  • For residential non-solar offer - annual consumption of 7,151 kWh.
  • For small business offers - annual consumption of 20,000 kWh.
  • For residential gas offers - annual consumption level of 38,451 MJ.

Standing and market offers

The below table shows the proportion of small customers on standing offers for electricity and gas and shows that in the ACT, 57 per cent of customers are on market offers.

Electricity and gas standing offers percentage

Electricity standing offerChange from 2018 to 2019Gas standing offerChange from 2018 to 2019
New south Wales13%-1%12%-1%
Australian Capital Territory43%-8%43%-6%
South Australia8%-1%10%-1%

Note: *Gas statistics are Queensland-wide and electricity statistics are for the deregulated region (South East Queensland). **While Tasmania has multiple gas offers - the AER does not publish customer numbers. ***Victorian numbers are based on residential customers only - Source: AER retail statistics and the ESC's Victorian Energy Market Report 2018-19. Data as of December 2019 - except for Victoria which is based on 2018-19.

Pricing behaviour - standing and market offers

As shown in the figure and table below, the ACT’s residential market has seen the number of offers available in 2020 decrease and the lowest offer has remained about the same from 2019 to 2020. The highest, average and median offers have all increased in 2020. Overall, price offers are increasing in 2020, although the ICRC's draft decision for the regulated standing offer price cap for ActewAGL is to decrease by more than $100 in 2020-21. Price dispersion has increased by 32 per cent, and while prices are generally higher, there are still lower priced offers available.

Bills - ACT Electricity Distribution Residential

Number of offers

Source: Energy Made Easy (accessed 1 March 2019 and 1 March 2020), AEMC analysis.

20192020changechange %
Number of offers9689-7-7%
Highest offer2227247024311%
Lowest offer14721471-10%
Median offer167017821137%
Average offer17081797895%

Bills - ACT Electricity Distribution Small Business

Number of offers

Source: Energy Made Easy (accessed 1 March 2019 and 1 March 2020), AEMC analysis.

20192020changechange %
# of offers46742861%
Highest $6,043 $6,82077713%
lowest $4,263 $4,183-80-2%
Median offer $5,227 $5,4862595%
Average offer $5,313 $5,4521393%
range $1,781 $2,63885748%

Bills - ACT Gas Distribution

Number of offers

Source: AER retail statistics and the ESC's Victorian Energy Market Report 2018-19.

Consumer behaviour and sentiment

In order to determine consumer behaviour and sentiment the AEMC examines consumer:

  • switching behaviour
  • ability to make choices and access to information
  • confidence in the energy market
  • satisfaction with energy services
  • perceptions of value for money for energy services

In an effectively competitive market, the expectation would be for consumers to have increasing confidence in their ability to make decisions over time.

Residential consumers

Data on residential consumer sentiment is sourced from the ECA's biannual Energy Consumer Sentiment Survey (the ECA Survey). Survey results have been compared on a year-to-year basis due to seasonality in the biannual survey responses (i.e. results in April 2019 to April 2020). The ECA survey results show that September/October results are generally more pessimistic than April.

Key changes in switching behaviour in the ACT were:

  • More customers switched retailers (11 per cent in 2020 compared to nine per cent in 2019).
  • Fewer consumers indicated an intention to switch retailers in the next 12 months (12 per cent in April 2020 compared to 18 per cent in April 2019).
  • The main reasons stated by residential consumers for switching was not being satisfied with the value for money from their retailer (18 per cent) and/or having searched for a better deal on a comparison website (20 per cent).

Electricity switching graph


Test Description

Gas switching graph


Source: AEMO, AEMC analysis.

Residential consumer confidence in the energy market increased in 2020. In April 2020 (compared to April 2019), confidence in the ACT that:

  • the market is working in consumers’ long-term interests was 26 per cent (up eight per cent)
  • they can make good decisions was 56 per cent (up two per cent)
  • they can access easily understood information was 48 per cent (up three per cent).

Residential consumer sentiment


Small business consumers

Small business consumer confidence data for 2019 and 2020 for the ACT is not available through the ECA survey due to the relatively small sample size.

Small business consumer sentiment


Consumer outcomes: Complaints, hardship and disconnections

Key statistics related to complaints, hardship and disconnections for the ACT include:

  • Complaints to retailers increased by five per cent from 2017-18 to 2018-19.
  • Complaints to the Ombudsman increased by 31 per cent in 2018-19. However the low number of consumers in this jurisdiction means that the change in actual numbers in relatively small.
  • The proportion of consumers on hardship programs between June 2018 and June 2019 increased by 0.18 per cent to a total of 0.76 per cent of consumers.
  • The average debt of customers on entry into hardship programs for electricity decreased by $241 from $1,617 in 2017-18 to $1,376 in 2018-19.
  • Electricity disconnection rates have:
    • increased by 40 per cent to 706 in 2018-19 for residential consumers
    • decreased by 62 per cent to 131 in 2018-19 for small business consumers.
    • [include in footnote] Note that the low number of consumers in this jurisdiction means that the change in actual numbers in relatively small.
  • Gas disconnection rates have:
    • increased for residential customers by 11 per cent to 481 disconnections in 2018-19
    • decreased for small business consumers by 15 per cent to 31 disconnections in 2018-19.
    • [include in footnote] Note that the low number of consumers in this jurisdiction means that the change in actual numbers in relatively small.

The table below provides a breakdown of closed complaints to jurisdictional ombudsman schemes:

ACT ombudsmen complaints

Retail gas111189133219292
Retail dual fuel87160148117147

In addition to closed complaints, ombudsmen deal with a range of enquiries and issues across various categories, which are listed below (noting that most complaints are in the ‘billing’ category):

  • Billing complaints
  • Credit
  • Transfer
  • Marketing
  • Customer service
  • Land
  • Supply
  • Provision
  • General enquiry

Additional information

Access to generation

Vertically integrated retailers

A vertically integrated retailer is a business that owns generation assets as well as selling electricity to customers in the mass market. Vertical integration in the electricity market provides a means for retailers and generators to internally manage the risk of price volatility in the wholesale spot market as they have a physical hedge. A physical hedge means that they have direct access to generation contracts to cover their customer's demand (also known as their load). The business therefore does not need to purchase that quantity of generation contracts from another party to manage its risk. However, these retailers' load and generation is unlikely to ever be perfectly matched, and they will therefore still have to purchase derivative products to manage their risk. Likewise, other risk management tools (such as demand response) may be used to hedge the retailers load to the desired level of risk.

The trend of retailers in the electricity market vertically integrating continued in 2019. This included acquisition of generation assets and entering into long-term contracts with generators, such as joint ventures.

Some retailers noted in the retailer surveys and interviews that some form of vertical integration is becoming a prerequisite to be able to expand to an efficient scale.

Arm’s-length vertical integration

A retailer that is vertically integrated through an arms-length relationship has access to wholesale hedging contracts through its parent company that owns, or is, a generation business. Unlike traditional vertically integrated retailers, the retail business and generation assets are generally separate businesses. For generators, such as Pacific Hydro, adding a retail arm like Tango Energy can reduce the risk they face in the contracts market by providing an extra path to market for their generation.

These retailers have access to contracts from their parent company’s generation, typically purchased at market rates, and terms and conditions. Any further uncontracted load is then purchased through the wholesale contract market or left exposed to the spot price. This structure allows the retailer to have a greater level of certainty that it will have access to contracts to provide a hedge against a volatile and/or illiquid market.

Standalone retailers

A standalone retailer is one that does not own, or have a commercial relationship with, any generation business to manage their customer's load. These retailers typically have to contract for their whole risk management portfolio with external parties. Therefore, to manage their risk to the same level, a standalone retailer will need to enter more commercial contracts with external parties relative to a vertically integrated retailer.

Standalone retailers typically have a higher cost to serve each customer due to the larger amount of derivative contracts they must purchase to hedge their load. The cost of hedge contracts stem from the associated premiums (and other costs) to ASX and over-the-counter (OTC) contracts. These businesses also face uncertainty of the availability and price of contracts in the future. Neither the costs nor uncertainty faced by standalone retailers are present to the same degree for vertically integrated retailers because they internally hedge.

While, in theory, standalone retailers may get access to lower costs on a transient basis compared to a vertically integrated retailer, over the longer term their costs are expected to be higher.

Wholesale contract market

The wholesale contract market is an important feature of the NEM, which supports retail competition. The below sections explain why and how retailers interact with the wholesale contract market. Retailer views on the contract market are covered in Chapter 3, section 3.3.1.

Why retailers interact with the wholesale contracts markets

The NEM wholesale spot market is a gross pool market where generators are paid for the electricity they produce, and retailers pay for the electricity their customers consume.[1]

The wholesale spot market price per megawatt hour varies from -$1,000 to $14,700. Retailers and generators therefore use electricity wholesale contracts as a way to manage the risk they are exposed to from fluctuating spot market prices. The wholesale contract market has implications for retail market outcomes. Wholesale contracts allow retailers to have a form of insurance so that they are able to know the price that they will pay for electricity in the medium-term. This in turn allows them to write longer term retail contracts with consumers, providing stable retail prices. For generators, wholesale contracts provide the revenue certainty that is critical when seeking finance for new generation investments.

A more liquid wholesale contract market typically supports a more effectively competitive retail market. This is because retailers are able to get the contracts they require to manage the wholesale market risk. A liquid wholesale contract market is typically characterised by:

  • no single transaction being likely to move the price excessively
  • individual trades that are able to be easily executed
  • an ability to trade large volumes of energy in a short period
  • a market that can recover towards its natural equilibrium after being exposed to a shock.

How retailers interact with the wholesale contracts market

Contracts in the NEM are currently traded either on the Australian Securities Exchange (ASX) or Over-The-Counter (OTC) through bilateral contracts. Swaps, cap options and power purchase agreements (PPAs) are the typical types of wholesale market contracts. These contracts are written to relate to a specific regional reference node and therefore only cover the risk for a retail load in that region. Different contracts also have a different certainty, or firmness, attached to them. Examples of this are:

  • A PPA contract from a generator is not as certain (or firm) as a base swap or cap contact because the retailers is still exposed to high prices if the generator is not generating at the time.
  • Interregional hedging is generally not as firm a contract as those written for the region where the generator is located. For example a New South Wales base contract will only cover the risk of the New South Wales wholesale spot price and not that of the retailer's customers in another state. This can mean that while a business may manage their risk by contracting between regions, these hedges are not as firm as the same contract with a generator in the same region as the load. This means that generation assets are most valuable in the state where they exist.

Along with the typically high use of swap, cap and PPA products, there has been the emergence of more bespoke products, such as weather derivatives and load-following hedges. These contracts are becoming a common way for retailers to manage a portion, or all, of their risk exposure to the wholesale market. There is currently poor visibility on who is using these products as they are not traded on the ASX, and the Australian Financial Markets Association (AFMA) electricity OTC derivatives survey does not provide detailed information for these types of contracts.

Wholesale risk management

The retailer survey asked retailers four questions regarding their management of wholesale risk. Retailers were given multiple answers to choose from. 20 retailers responded to the survey, and between four and 15 retailers responded to each question. These results provide an indication of how retailers manage their exposure to risk in the wholesale spot price market, but should not be relied upon as definitive. Retailer results for Tasmania were excluded due to small number of respondents. 

How do you manage your wholesale risk?

Retailers were given four options to choose from

  • Internal contracting  - e.g. vertical integration
  • External contracting - active trading through OTC and ASX
  • External contracting - load following hedge or other de-risk strategy
  • Pass through wholesale costs - risk passed onto customers

 The table below shows the proportions of retailers that chose each of the four wholesale risk management strategies by jurisdiction:

Wholesale risk management strategies

Internal contracting-External contracting - active tradingExternal contracting - de-risk strategyPass through wholesale costs

When do you start hedging for wholesale costs?

Retailers were given the following options to choose from

  • 0-6 months
  • 6-12 months
  • 12-18 months
  • 18-24 months
  • Greater than 24 months
  • Wholesale costs are not hedged

The table below shows the proportions of retailers that chose each of the ‘when do you start hedging’ options by jurisdiction:

When do you start hedging

0-6 months6-12 month12-18 months18-24 monthsGreater than 24 monthsNot hedged

When do you finish hedging for wholesale costs?

Retailers were given the following options to choose from

  • 0-6 months
  • 6-12 months
  • 12-18 months
  • 18-24 months
  • Greater than 24 months
  • Wholesale costs are not hedged 

The table below shows the proportions of retailers that chose each of the ‘when do you finish hedging’ options by jurisdiction:

When do you finish hedging

0-6 months6-12 month12-18 months18-24 monthsGreater than 24 monthsNot hedged

Has your wholesale market hedging strategy changed over the past 12 months?

Retailers were given the following options to choose from

  • Yes, more coverage compared to 12 months ago
  • Yes, less coverage compared to 12 months ago
  • No, the same coverage as 12 months ago 

The table below shows the proportions of retailers that indicated whether their wholesale market hedging strategy has change or stayed the same as 12 months ago, by jurisdiction:

Has your strategy changed

More coverageLess coverageNo change in coverage

Engaged retailers

For the 2020 Retail energy competition review, the AEMC attempted to engage with 40 energy retail brands through an online survey and interviews. The below table show which retailers responded to each of these engagement methods. 

Engaged retailer

Online surveyInterview
Energy LocalsYesYes
ERM PowerYes
Pooled EnergyYes
Red/Lumo EnergyYesYes