Opening up the electricity market to competition may have been touted by government as paving the way for lower bills, but many households have refused to take part, which has resulted in only a modest number of families nationwide chasing cheaper power suppliers.
At the same time, households say that the value for money of their electricity services ranks behind gas and all other utility services, including banking, mobile phones and internet services, said Rosemary Sinclair, the chief executive of the government-backed Energy Consumers Australia.
More Environment News Videos
'Clean coal' makes a comeback
New technology means coal will play a role in electricity generation long into the future, says Malcolm Turnbull. Courtesy ABC News 24.
"While some consumers are taking advantage of competition to get better value for money, the majority are not," she said.
One difficulty can be the challenge of changing supplier even if you find a better priced offer, Ms Sinclair said, with a "general wariness about the market and the sense that it is not working in [consumer's] interests".
![According to a survey, 74 per cent of households do not intend to change their supplier in the next 12 months.](/web/20170207113658im_/http://www.smh.com.au/content/dam/images/g/q/j/1/l/3/image.related.articleLeadwide.620x349.gu65tk.png/1486418786761.jpg)
"The consumers who are switching ā who are actively engaging in the market ā are not reporting higher levels of satisfaction with value for money than those who are not. This points to the need to place the retail market ā where there are questions about value for money, the nature of the services being offered and where innovation is going to come from ā at the centre of thinking about the transformation of the energy system."
Consumer wariness over how electricity and gas markets work have resulted in large numbers of households deciding not to engage at all, a survey by the consumer body released Tuesday has found, with nearly half of all households in NSW and Queensland never having switched supplier (47 per cent and 52 per cent respectively) while even in Victoria, which is touted as among the most competitive markets globally, 36 per cent of households have never changed their supplier.
As a result, it appears that much of the switching involves only a small number of households who change supplier regularly, the survey found, a finding which was reinforced by the fact that 74 per cent of households surveyed do not intend to change their supplier in the next 12 months.
!["While some consumers are taking advantage of competition to get better value for money, the majority are not": Rosemary ...](/web/20170207113658im_/http://www.smh.com.au/content/dam/images/g/u/6/t/w/8/image.related.articleLeadwide.620x349.gu65tk.png/1486418786761.jpg)
At the same time, satisfaction with electricity and gas supplies has declined everywhere bar in Victoria, with most states also reporting lower 'value for money', the survey found.
Opaque pricing of electricity has prompted Victoria's Essential Services Commissioner, Ron Ben-David, to argue that perhaps energy markets need some "regulatory shock therapy".
![Consumers wary of electricity and gas markets: Few families are chasing alternate energy suppliers.](/web/20170207113658im_/http://www.smh.com.au/content/dam/images/g/p/o/9/r/t/image.related.articleLeadwide.620x349.gu65tk.png/1486418786761.jpg)
"Without a regulatory spur, the retail energy markets can soon settle into fairly cosy equilibrium once prices have been deregulated," he wrote in a paper last year. "Such cosy arrangements are unlikely to be in the long-term interests of consumers. As regulators, we should not tolerate such complacency."
The unwillingness of households to shop around has resulted in the big three energy utilities ā Origin, AGL and EnergyAustralia ā continuing to dominate the market, holding an estimated 90 per cent in Queensland, 91 per cent in NSW, 79 per cent in South Australia and 63 per cent in Victoria.
"Around us, we see markets with characteristics that force us to question the effective state of competition. Price structures are at odds with what we might expect in a highly competitive market," the Essential Services Commissioner's Ben-David wrote. "Retailers have developed contract arrangements that effectively 'hide' their actual prices. Customers have a very low awareness of the market, how they are engaging with it or what it really means for them."
Competition policy doesn't end with just establishing the market design rules, the Energy Consumers Australia's Ms Sinclair said.
"Up to now, the emphasis has been on the supply side of the [energy] market," she said. " We haven't had the tools to understand consumer behaviour. We do now ā and policy makers need to understand how the consumer sees the market, on their terms."
0 comments
New User? Sign up