Overall affordability of electricity and gas for households improved in New South Wales in the year to 30 June 2016, according to the new 2015-16 Australian Energy Regulator (AER) performance report[1].
AER Chair Paula Conboy said that at 30 June 2016, a low income household was spending 3.8 per cent of its disposable income on electricity (after a concession), down from 3.9 per cent in 2014-15, and 2.8 per cent on gas, helped by a new gas concession available to eligible customers.
“Despite these changes, and new entrants to the New South Wales market, energy bills remain a big expense for many people,” Ms Conboy said.
“One way to reduce the cost of energy is to shop around, so it is pleasing that more New South Wales electricity and gas customers are now on typically cheaper market contracts,” Ms Conboy said.
“Just under 75 per cent of electricity customers and 80 per cent of gas customers, up by 5 per cent and 4 per cent respectively in the year to 30 June 2016, are now on market retail contacts, with typical savings of around 6 per cent off the standing offer for both electricity and gas.”
The AER’s Energy Made Easy website is a useful resource to help people compare all the generally available offers in their area, as well as get helpful information to help navigate the market. There were over 750 electricity offers generally available in New South Wales at 30 June 2016.
Ms Conboy said there are encouraging signs that retailers are working harder to help those unable to pay their energy bills.
“Participation in hardship programs, which provide the highest level of support for customers, increased for both electricity and gas customers in 2015-16,” she said.
“Retailers in New South Wales reported a 15 per cent fall in gas disconnections, and a 6 per cent fall in electricity disconnections. Despite this, the average electricity hardship debt in New South Wales has increased and 3.3 per cent of customers are repaying an electricity debt” Ms Conboy said.
“If customers are struggling to pay their energy bills they should contact their energy retailer early and ask for help, to avoid being disconnected.”
The AER has developed a new Sustainable Payment Plan Framework to provide further protection for vulnerable consumers. Several retailers in New South Wales including AGL, Click Energy, EnergyAustralia, Origin Energy, Pooled Energy, Powershop and Simply Energy have already signed up to the voluntary framework that sets standards for retailers to meet when offering payment plans to customers.
“We have worked with financial counsellors, consumer groups and energy retailers to develop a Framework to improve how retailers can assist their customers manage their energy bills. We are shining a light on those energy retailers who have voluntarily agreed to the Framework committing them to improving outcomes for customers struggling to pay their energy bills” Ms Conboy said.
The AER has also released its annual compliance report for 2015-16. New South Wales distribution networks Ausgrid and Essential Energy were among eight energy businesses to be fined by the AER during the year for breaches of the National Energy Retail Law, paying $60,000 and $20,000 respectively in penalties for failing to provide at least four business days’ notice of any disruption of service to life support customers.
"Breaches of life support obligations are potentially catastrophic and have been the focus of campaigns to increase community awareness and improve compliance,” Ms Conboy said.
“Results are being seen in improved network systems and processes to safeguard against potential breaches as they continue to work towards improved compliance. The campaign continues in 2016-17.”
About the AER
The Australian Energy Regulator regulates energy markets and networks under national legislation and rules in eastern and southern Australia, as well as networks in the Northern Territory. Its functions include:
- monitoring wholesale electricity and gas markets to ensure energy businesses comply with the legislation and rules, and taking enforcement action where necessary;
- setting the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy;
- regulating retail energy markets in Queensland, New South Wales, South Australia, Tasmania (electricity only), and the ACT;
- operating the Energy Made Easy website, which provides a retail price comparator and other information for energy consumers;
- publishing information on energy markets, including the annual State of the energy market report, to assist participants and the wider community.
[1] These reports cover jurisdictions that have commenced the National Energy Retail Law. This includes Tasmania (electricity only) and the Australian Capital Territory from 1 July 2012, South Australia from 1 February 2013, New South Wales from 1 July 2014 and Queensland from 1 July 2015.