New retail gross margin and internal transfer price data published

We’ve published the retail gross margin (RGM) and internal transfer price (ITP) data for the 2022/23 financial year.

The ITP is the price at which a generator-retailer business ‘sells’ energy from its generation arm to its retail arm. The data shows the ITP increased for all gentailers for 2022/23 compared to previous years. Wholesale spot prices and hedge prices on the ASX also increased over the same period.

We have also published the RGM data for the 2022/23 financial year. The RGM is the retailer revenue remaining once the cost of electricity, metering, distribution, transmission and levies have been subtracted. The data shows the RGM for retailers with more than 1% of all ICPs. It shows that the RGM has decreased for most as costs increased by more than revenue.

The decrease in the average RGM indicates retailers absorbed at least part of the cost increases, instead of fully passing cost increases on to consumers.

We are carrying out a post-implementation review of the ITP and RGM information disclosure provisions while our risk management review is testing whether the availability and pricing of risk management options, particularly over-the-counter contracts, creates a barrier to entry or expansion by retailers. That includes considering the generator-retailer internal relativities (such as ITPs).

Read an update on that work: Reviews into information disclosure provisions