Report

Market power in the Victorian retail energy market

6 Dec 2012
Description

According to the Australian Energy Market Commission (AEMC), the objectives of energy retail market competition are to give customers the opportunity to choose among competing retailers and to deliver efficient prices and services.1 In neoclassical economic theory, effective competition is desirable because it allocates resources efficiently and maintains pressure on market participants to deliver efficient prices to consumers.
The Victorian retail energy market is designed to work competitively with the informed choices of consumers placing competitive constraints on price and restricting inefficient market outcomes. Unlike other Australian retail energy markets, Victorian retail prices are not subject to a regulated price cap.

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2012
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