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The Australian Energy Market Commission (AEMC) has released its 2014 Residential Electricity Price Trends report. The report forecasts retail electricity prices for each Australian state and territory out to financial year 2016/17. Frontier (Australia) was engaged by the AEMC to conduct wholesale market modelling as well as assisting in building the tariff models for each jurisdiction.

Retail electricity prices are forecast to decline in real terms in most eastern states. This trend is mainly driven by suppressed wholesale electricity prices and the expected decline in network charges.

Frontier’s modelling shows that wholesale electricity prices in eastern states will remain low for the forecast period due to continuing decline in electricity demand. The removal of the carbon price also led to a one-off drop in electricity prices at the beginning of the financial year 2014/15.

In its recent draft determination, the Australian Energy Regulator (AER) has proposed a large reduction in allowed revenues for network businesses in New South Wales and Australian Capital Territory from financial year 2015/16. The AER has not yet announced its draft determination regarding Queensland and South Australia. Lower network charges will also contribute to lower final retail bills paid by customers.

The electricity market in Western Australia operates differently from the eastern states. Retail electricity prices in Western Australia are predicted to rise in financial years 2015/16 and 2016/17, which mainly reflects the budgetary outlook of the Western Australian government.

Frontier regularly advises clients on energy issues spanning wholesale, network, retail and regulation.
For more information, please contact Marita O’Keeffe on or phone +61 3 9620 4488.

Specialist financial economists Professor Stephen Gray and Dr Jason Hall from SFG Consulting Pty Ltd joined Frontier (Australia) as executive directors as of Monday 3 November 2014.

The addition of Stephen and Jason significantly boosts Frontier’s capacity to provide specialised financial consulting services in the areas of cost of capital, valuations, corporate finance, and financial economics.

“We’ve worked with Stephen and Jason for many years and they are a natural fit into Frontier Economics. Their skills and experience are highly regarded around the region.” said Danny Price, managing director of Frontier (Australia). “This means our clients can access an expanded range of economic advice, with our strong sectoral knowledge in the broader areas of financial economics, litigation support, competition, public policy and regulatory advice.”

“Frontier's reputation for quality, independent economic thought made it an easy decision for us. We’ve always enjoyed working with Danny, Philip and the rest of the team.” said Stephen Gray.

Stephen and Jason will advise clients from a new Frontier office in Brisbane, which gives us a renewed presence in that location.

In addition, Andrew Harpham, a long-standing member of Frontier's energy team, joins the board of Frontier Economics Pty Ltd. This follows the appointment of James Allan, also a long-time Frontier employee, as an executive director in November 2013.

Dr Philip Williams continues as chairman. We look forward to this exciting new stage in our development.

For more information, please contact Marita O’Keeffe on or phone +61 3 9620 4488.

With A Postscript On The Negotiated Outcome

This note was originally prepared to support a presentation made by Brian Parmenter of Frontier (Australia) at Norton Rose on 15 June 2010. On 2 July 2010, the new Prime Minister, Julia Gillard, announced substantial changes to the Resources Super Profits Tax (RSPT) proposed by her predecessor, Kevin Rudd, rechristening it the Minerals Resource Rent Tax. We have opted to leave the main part of the note in its original form; it explains how rent taxes work and identifies the key deficiencies of the RSPT. We have added a postscript that addresses the recently announced changes.DOWNLOAD FULL PUBLICATION