Consumers more annoyed with their energy company than their banks and mobile providers
Trust in energy companies has hit record low levels, prompting Australians to shop around for a better deal on their household power bills.
The Australian Energy Market Commission (AEMC), which sets the rules for how the nation’s electricity and gas markets operate, has released its latest review into competition in the energy sector.
It claims only 39 per cent of Australians trust their energy company, down from 50 per cent last year.
“The recent announcements by the major energy retailers about keeping prices flat or falling is certainly very welcome news,” AEMC chairman John Pierce told the ABC’s AM program.
“But over the last 12 months, the confidence or trust that consumers have in the sector is taking a bit of a battering.”
Mr Pierce was quick to point out the data used in the AEMC report was taken before some of the shocking revelations from the banking royal commission, which may have further eroded trust in the sector.
Retail power prices rose from 2017 to 2018 across most states and territories, by between $110 and $316.
Some companies have started announcing minor price cuts for this year, which do little to cover the massive increases from the previous year.
Federal Energy Minister Josh Frydenberg issued a blunt warning to energy companies.
“My message to the retailers is: unless they get prices down and they pick up their act you will see more intervention, because that’s what the public will demand of their political leaders,” he told the ABC’s RN.
Consumer advocates warned that people were more likely to shop around because of growing frustration over how confusing energy companies make information about their offers.
“They are confused and frustrated with the energy market, and that’s both gas and electricity,” Gavin Dufty, policy and research manager at the St Vincent de Paul Society, told AM.
“They also all have different ways to entice you, which means you’re not really sure what you’re getting. It looks good, but at the end of the day when the bill turns up it may not be good.”
Mr Dufty also argued bickering over the politics of energy policy was not helping customers make decisions about which deal was best for them.
Comparison websites, both commercial and government-operated, were also growing in popularity as customers looked for alternative deals.
But the AEMC found such websites varied in how useful they were to consumers.
Retailers need to use their seat at the negotiating table
The AEMC report also found significant costs borne by consumers came from the network charges, or costs of maintaining poles and wires, passed on to retailers.
John Pierce said retailers were not pressuring networks to cut some of those charges, and argued that would be another way to win back community support.
“The process certainly allows them to be involved,” he said.
“On some of the major things that drive those network charges, I would expect those commercial retailers would be very well placed to put a view to the Australian Energy Regulator about what the rate of return should be on those network charges.