ACCC proposes joint tendering for retail energy prices

The Australian Competition and Consumer Commission has proposed to give members of the Large Format Retail Association the ability to jointly tender and negotiate for cheaper electricity prices. 

The proposal comes as retail electricity prices continue to increase, having more than doubled between 2015 and 2017, and will allow LFRA members the ability to seek more competitive offers for the next 11 years – something the ACCC expects will lead to more competition between power players.

“Energy is usually the third largest expense for Australian businesses. Now, the businesses in this submission will get on a more sustainable financial footing as their cost of electricity is reduced,” LFRA’s chief executive Philippa Kelly said. 

“Members of the buyers group could potentially pass on the electricity cost reduction in the form of lower prices, invest in improved product offerings, expanding their product ranges or employ additional customer service staff with the expected savings.”

According to the LFRA, the large format retail sector consumed over 1 terawatt hours, with approximately 942 gigawatt hours in the national energy market, 86 gigawatt hour in the wholesale electricity market and almost 10 gigawatt hours in the Northern Territory. 

LFRA members include retailers such as Bunnings, Ikea, Macpac, Officeworks, JB Hi-Fi, Supercheap Auto, Rebel Sports, Anaconda and Freedom. 

“We propose to allow this joint tendering because we expect it will lead to more competition between suppliers for the group’s combined electricity demand,” said ACCC commissioner Stephen Ridgeway. 

“Collectively tendering is also likely to save the retailers time and money compared to individual negotiations for electricity supply.”

Businesses are increasingly looking for ways to cut down on their overall energy usage, with retailers such as Dominos, Coles, and Woolworthsimplementing solar strategies to offset the rising price of energy. 

Additionally, property players such as Vicinity Centres and Stockland have begun their own solar programs to lower their portfolio’s energy footprint.

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