The state's Economic Regulation Authority says a re-amalgamation of Verve Energy and Synergy will have adverse implications on the wholesale energy market.
The state's Economic Regulation Authority says a re-amalgamation of Verve Energy and Synergy will have adverse implications on the wholesale energy market.
In its Annual Wholesale Electricity Market Report, the ERA said a merger Verve Energy with retailer Synergy would "destroy" competition.
"Both retail and generating activities within the WEM [wholesale electricity market] are currently dominated by state-owned businesses, namely, Synergy and Verve Energy, respectively," ERA said in its report.
"... this concentrated structure has led to a quasi-bilateral monopoly market structure in the WEM.
"Such a structure is likely to reinforce the barriers to new entry resulting from non-cost reflective tariffs and the absence of FRC [full retail competition].
"In addition, the Authority understands that the new government may be considering a merger of Verve Energy and Synergy.
"The Authority considers that the existence of such a dominant 'gentailer' in the WEM would destroy effective competitive tension in the market with adverse impacts on efficiency."
