AER annual performance report shines light on retail energy markets

The Australian Energy Regulator has released its first annual performance report on the retail energy market under the National Energy Retail Law (Retail Law), which started in South Australia, the Australian Capital Territory and Tasmania (for electricity only) during 2012-13.

The AER monitors retail market and retailer performance in key areas including number of active retailers, customer switching rates, the number of customers in debt, average debt levels, the numbers disconnected for non-payment and the assistance provided to customers experiencing payment difficulties. The report also shines a spotlight on customer service levels provided by retailers, including the performance of their call centres and the rates of complaints across retailers.

“Our monitoring and reporting role brings a high level of transparency to the performance of energy retailers and the retail energy market. It helps us to identify emerging issues and problem areas that may require a compliance or enforcement response. It also serves to highlight those retailers who are performing less well or who are not meeting their obligations in particular areas,” AER Chairman Andrew Reeves said.

“For example, our mystery shopper review shows that some retailers are not being as responsive in answering customer calls as their peers. This sort of benchmarking information is valuable for customers when making decisions about what retailer to sign up with.”

The AER’s analysis on energy affordability and the impact of energy bills on the budgets of low income households in Queensland, Victoria, New South Wales, South Australia, the ACT and Tasmania, is reported for the first time. This shows benchmark low income households in receipt of an energy concession spend between 2.9 and 7.9 per cent of disposable income on electricity bills and between 1.4 and 3.4 per cent on gas bills. These estimates are influenced by consumption levels, prices and ABS estimates of the income of low income households across jurisdictions.

“Customer protections under the Retail Law require energy retailers to offer payment plans to customers who are having difficulty paying their bills, or more comprehensive hardship assistance for eligible customers,” Mr Reeves said.
“Customers who are having trouble paying their energy bills should contact their retailer as soon as they know they will have a problem. Early assistance can help customers avoid building up higher levels of debt, avoid extra fees or having their service disconnected.”

“The AER will continue to closely monitor retailers’ performance in these key areas to ensure that customers are getting appropriate access to payment plans and hardship assistance. We are commencing a broader review of retailers’ hardship programs in early 2014.”

Mr Reeves also said that customers who are unhappy with the service they are receiving from their retailer or who were looking to reduce their energy bills should consider shopping around and switching offers.

“The range between the highest and lowest priced offer in any given area can be several hundred dollars over a year, so clearly it can pay to shop around. The AER’s Energy Made Easy website is a free, easy to use, independent website that can help customers compare different energy offers.”

Mr Reeves said that the report will provide valuable customer and market information to those organisations dealing with customers and energy issues.

“It will become even more a source of interest as other states take up the Retail Law and as we get more data to allow us to identify trends,” Mr Reeves said.

To compare energy offers, visit www.energymadeeasy.gov.au

Issued date: 
26 November 2013
AER reference: 
NR 028/13
Contact: 
Ms Meg Macfarlan, AER media unit 02 6243 1317 0408 995 408