A friendly goodbye:

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A friendly goodbye:
PIAC submission to IPART's Issues Paper, Early termination fees - Regulating the fees charged to small electricity customers in NSW
Derum, Oliver.
Publication Date:
6 Sep 2013
Publication Type:

This  submission responds to the Independent and Pricing and Regulatory Tribunal’s (IPART) Issues Paper, Early Termination Fees – Regulating the fees charged to small electricity customers in NSW. PIAC has argued in a number of submissions that base early termination fees (ETFs), which exclude the cost of any inducements offered to customers,  should be banned. In PIAC’s opinion, such ETFs have a negative impact on competition. While holding to this primary position, PIAC acknowledges the premise of this review is to set a base ETF. In light of that, PIAC makes a number of comments related to: IPART’s proposed approach in choosing which costs to include in the base ETF; how those selected costs are calculated; the impact on the market of making a base ETF too low or too high; the option or requiring all retailers to offer a contract without an ETF; and, permitting retailers to recover only the true cost of any inducements, not a recommended retail price, which may be higher. The submission recommends that because the costs associated with early termination are low, any ETF cap should be set no higher than $20, the level set by the Victorian Essential Services Commission.

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