The Challenge of a Deregulated Market

An Address by Alan Moran, Director, Deregulation Unit, Institute of Public Affairs
to the Conference: Network Pricing, VoLL Interconnection in the NEM,
Melbourne 29 September 1999


Since the NSW/Vic markets for electricity commenced in 1997, average prices have been almost half the levels that were forecast. Prices may have been trending upwards, but do not seem set to increase to the level of $38 per MWh that was anticipated at the time of Victorian privatisation. However, prices in the Queensland and SA markets have been above this. Increased supply from Queensland is likely in the next year or so, bringing a price softening in that State. This will be reflected in the rest of the linked market because of pending interconnections NSW and Queensland.

Against this background of market trends, the paper discusses some policy issues including the ACCC's merger restraints, regulatory price setting outcomes and the need to press for regulatory disengagement.

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