Consultations have now closed on the draft Bill, the price cap section of the consultation paper and the draft price order instrument.
Consultation on the remainder of the consultation paper closes on 7 February 2023.
This consultation paper seeks input on the design of the gas elements of the Government’s plan to address high energy prices and ensure that our wholesale gas markets deliver adequate supply at reasonable prices and on reasonable terms to domestic users.
A mandatory code of conduct is proposed, to address systemic issues within the wholesale gas market and guide participants’ behaviour. As part of the code, a reasonable pricing framework will provide a basis for producers and buyers to negotiate domestic wholesale gas contracts at ‘reasonable prices’, which should reflect the cost of domestic gas production including a reasonable return.
A temporary, emergency price cap is also proposed to ensure domestic industry remains viable, and ensure households and businesses have access to affordable energy. A draft instrument to implement the price cap is available at Appendix B to the consultation paper.
Feedback is also sought on the draft Competition and Consumer Amendment (Gas Market) Bill 2022 and explanatory memorandum. If passed, the Bill will establish a new Part IVBB within the Competition and Consumer Act 2010, creating an enabling framework for implementation of the mandatory code and price cap.
The final design of these measures will be informed by responses to this consultation.