The Australian Energy Regulator (AER) has published two reports that provide a detailed snapshot of the Australian retail energy market, including energy affordability and compliance with the National Energy Retail Law (Retail Law).
The AER’s 2014 annual Performance and Affordability report highlights the performance of retailers in a range of areas, including the number of customers in debt and debt levels. Information on retailers’ customer service levels, including complaint rates, is also provided.
AER Board member Jim Cox said that the report provides particularly valuable information about how lower income households were faring in the energy market including: how much households spend on energy, how many people are in retailer hardship programs, how many of these eventually clear their energy debts, and how many were disconnected for non-payment.
During 2013-14 significant increases in the number of customers entering retailer hardship programs occurred in some states, despite affordability (how much a household spent on energy as proportion of their disposable income) remaining steady.
“The increase in the number of customers entering into hardship programs rather than simply being disconnected indicates to us that more people are taking steps to control their debt before it gets out of hand. This is a positive development,” Mr Cox said.
“Help under a retailer’s hardship program can include tailored payment plans based on what a customer can afford to pay. As long as a customer is making the agreed repayments, they shouldn’t be disconnected” Mr Cox said.
“If you experience financial difficulties, it is important to speak to your energy retailer early, to avoid the of risk disconnection.”
Retailer hardship programs are mandatory and have to be approved by the AER.
“Our aim for this report is to highlight examples of good practice, as well as identifying areas of concern.” Mr Cox said.
“It is important that consumers are informed about the options that are available to them”.
Mr Cox said the report is a timely reminder about the potential benefits of shopping around.
“There can be big differences between the most expensive and least expensive energy offer, even in the same area, so it is definitely worth looking to see if there is a better energy offer available.”
“Our Energy Made Easy website (www.energymadeeasy.gov.au) is a handy resource to help consumers compare the electricity deals in their area. It’s a free government website, so you can trust it’s not influenced by commercial interests,” Mr Cox said.
Mr Cox said dissatisfied customers should feel confident to look at other options.
“If you’re not happy with your retailer or some aspect of your energy service, you can take your account somewhere else. Knowing that customers are prepared – and able – to do this keeps retailers on their toes.”
The AER has also released its annual retailer compliance report for 2014.
While retailer compliance with the Retail Law was generally satisfactory, the AER remains concerned about some issues. These include energy companies’ obligations to consumers using life support equipment, disconnection of customers in financial hardship, customer consent, and billing issues.
The AER has recently taken action against energy retailer EnergyAustralia for allegedly contravening the National Energy Retail Law by failing to obtain the explicit informed consent of customers before transferring them to new energy plans.
“We will continue to monitor these areas and investigate potential breaches. There are a range of remedies available to the AER where business are not complying with the law, including working with businesses to resolve issues, infringement notices, enforceable undertakings and court action,” said Mr Cox.
Read more: NSW Media release
Read More: South Australia media release
Read more: Tasmania media release
Read more: ACT media release