08 August, 2017

Annabel Hennessy and Matthew Benns

Courtesy of the Daily Telegraph

 

Money hungry energy companies could be forced to switch customers to cheaper contracts under a new plan being considered by the Federal Government.

Prime Minister Malcolm Turnbull has summoned the country’s biggest electricity retailers to meet him in Canberra tomorrow where he will confront them on soaring prices.

It comes after The Daily Telegraph’s electricity campaign revealed thousands of NSW homes were at risk of disconnection while retailers are making huge profits.
The retail price for electricity in NSW is now among the highest in the world with the average home paying 39.1c/kWh compared to compared to just 31.43c in Great Britain and 15.75c in the US.

Federal Energy Minister Josh Frydenberg told The Daily Telegraph he wanted retailers to move households from the higher standing offers to cheaper market deals.

“The Australian Energy Regulator has found that Australian households could save $1,000 dollars or more by moving from a standing offers to a market offer. That being the case, nearly half of the Australian households have not switched retailer or contracts in the last five years,” Mr Frydenberg said.

“So we need more transparency, more consumer awareness and we need the retailers themselves to facilitate the movement of their customers.”

Standing offers are deals that can’t change more than once every six months and do not come with discounts. Market offers can change at any time but tend to be cheaper and include discounts.

Mr Frydenberg said the purpose of the meeting was to “eyeball” the electricity retailers, but if they found the retailers weren’t doing enough to help vulnerable households they would explore regulatory options.

It is understood Turnbull Government is also looking at introducing standardised discounts after concerns deals were too confusing for the average customer to understand.

Australian Power Project CEO Nathan Vass said research showed the price of electricity had jumped by about 350 per cent compared to other household goods since 1997.

“Ordinary Australians can’t go on like this. The PM has to lay down the law and demand that the energy companies put people before their profits and provide this essential service at a reasonable price,” he said.

Those invited to tomorrow’s meeting include the heads of Energy Australia, Origin Energy, AGL, Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council.

An AGL spokesman said they had called for a “standardised industry-wide solution to help customers easily compare plans” and are committed to working with industry, regulators, retailers and consumer groups.

An Origin spokeswoman said they were “acutely aware” households were being hurt by price rises and that customers in their hardship program would not pay recent increases.

EnergyAustralia’s spokeswoman said they had been encouraging governments to investigate and adopt several measures aimed at reducing cost and complexity for customers.