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Energy discounts fail to stack up
26 September 2017
The latest energy market report from the state’s economic regulator has found big discounts can have little effect on household energy bills.
The Essential Services Commission’s quarterly energy market update shows the highest discounts on offer might not turn out to be the cheapest offer available.
Commission chair Ron Ben-David says the latest data reveals a household would pay the same amount to two different retailers despite one offering double or even triple the discount.
“Our analysis showed you could pay retailer A, on a 10 per cent discount, the same amount as you would pay another retailer on a 30 per cent discount for the same amount of energy,” he said.
Dr Ben-David says it’s easy to see why customers can become confused.
“When the offers appear to be very different, but essentially cost the same, there’s no transparency for the customer,” he said.
The quarterly energy market update also shows disconnections are continuing to rise:
with electricity disconnections increasing by six per cent in the latest quarter, up from 8,048 to 8,559 April-June 2017 (up by 46 per cent on the same period last year)
gas disconnections increasing by seven per cent in the last quarter from 4,669 to 5,027 (up by 28 per cent on the same period last year)
The update also shows debt for those in hardship programs remains high at $60 million but has levelled off since the beginning of the financial year.
For the first time, the commission has also reported on its extensive energy audit program. Twenty-two of Victorian’s energy companies were audited over three months with results showing retailers and distributors were generally complying with current energy rules.
In most cases, retailers had sound practices for offering customers payment plans and distributors had good processes for managing customer complaints. However, the audit also showed many retailers and distributors had weaknesses in maintaining records, overseeing staff and providing accurate performance data.