Big discounts don't translate to energy savings

A new report on the state of the Victorian energy market shows while energy companies are offering bigger and bigger discounts, power bills are continuing to rise.

The latest analysis of market by the regulator shows the average standard contract price of electricity and gas increased by 5 per cent and 16 per cent respectively over the past year.

Essential Services Commission chair Ron Ben-David says at the same time, the cost of failing to meet discount conditions increased significantly.

“A customer who didn’t meet their discount conditions for an entire year would pay an extra $314 for electricity, an increase of 27 per cent and $189 for gas, an increase of 16 per cent,“ he said.

Dr Ben-David says the combined impact of rising prices and bill shock from not meeting discount conditions sees many customers struggling to pay their energy bills.

“The number of customers in hardship programs grew to 37,935 (up 13 per cent),” he said.

New data shows customers can be up to a year behind in payments before getting help from energy companies.

“The average debt for someone entering a hardship program in 2016–17 was $1,241, meaning these customers are already a year behind before they start getting help,’ said Dr Ben-David.

“These findings reinforce the need to push ahead with changes to the energy rules,’ he said.

The new rules coming into effect in January 2019 will require retailers to provide timely, flexible and meaningful assistance to customers who are facing payment difficulty.

The latest report also shows:

• total disconnection numbers were down (61,529 - 50,035) but the number of households being wrongfully cut off was up by 28 per cent (564 726)
• small and medium-sized retailers have increased market share over the past year but most customers are still with the six large retailers (85 per cent electricity and 92 per cent gas).

The new data is from the commission’s second annual Victorian Energy Market Report aimed at helping customers understand how the market works and what they can do to get the best out of it.