PIAC’s letter responded to IPART’s final report for regulated retail prices and charges for gas from 1 July 2016. PIAC reiterated its concerns with IPARTs determination that competition is sufficient in NSW, even in regional areas with only one retailer. PIAC was not satisfied that IPART had given sufficient consideration to specific barriers to entry in regional NSW gas markets, including the size of customer base, the higher customer acquisition costs, and the limited geographical pipeline coverage and capacity of regional pipelines. IPART contended that for the majority of the market the threat of competition from electricity was enough to keep gas prices affordable. However, the ACCC had found that the threat from electricity ‘provides a weak constraint on pipelines’. PIAC recommended that this issue be given more consideration over the next year.
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