As energy market reform matures, another option to assist vulnerable consumers achieve better energy outcomes is to implement competition in choice of supplier.
- The highest cost components of an energy price are usually generation and networks costs. If generation and network charges are set at cost-reflective levels, then it is possible for the final stage of energy delivery, the selling of energy to a consumer, to be a competitive market.
- All the sellers/retailers of energy to consumers need to be able to have access to generation and use of the energy networks on equal terms, and then through innovation in tariffs and efficiency in service delivery retailers can offer consumers different products/prices.
- The benefit of the competition between suppliers is that they may offer tariffs more suited to the consumption pattern of a consumer, including a vulnerable consumer.
- The consumer also has greater bargaining power with their energy supplier and will switch supplier if unhappy with the tariffs or service offered by their provider.
