AER report shines spotlight on Tasmanian energy market

The Australian Energy Regulator has released its first annual performance report on the retail energy market under the National Energy Retail Law, which started in Tasmania (for electricity only) on 1 July 2012.

The report identifies a range of customer service performance issues for Aurora Energy—the only retailer for residential customers in Tasmania. In particular, the report shows that Aurora does not perform well, in comparison with retailers in other states, in respect of their telephone answering service. It had the lowest proportion of telephone calls answered within 30 seconds (50 per cent) and the largest percentage of abandoned calls (10 per cent). Aurora Energy failed to report reliable and comparable information on the numbers of customer complaints it received and so this data has been excluded from the report. The AER is pursuing this matter with Aurora Energy.

The report also underlines that many customers are experiencing difficulties in managing their bills. In Tasmania at the end of June, around 7000 electricity customers (3 per cent) had amounts owing to their retailer for 90 days or more, with the average debt being around $800. Many of these customers are being assisted, with over half (around 3600) on payment plans. The number of customers accessing Aurora Energy’s hardship program also rose from 248 customers in March to 408 in the June quarter. In addition to this, Aurora Energy assists its customers through a hardship fund, administered by community agencies, which is not included in this report. During 2012-13, 1057 electricity customers were disconnected for non-payment.

The report also features findings on energy affordability, and the impact of energy bills on the budgets of lower income households in Tasmania. At June 2013, annual electricity bills for a benchmark Tasmanian low income household in receipt of an energy concession came to $2160—around 7.8 per cent of their annual disposable income. This assumes that a low income household has the same level of usage as other Tasmanian households of comparable size.

Compared to a benchmark middle and high income household in Tasmania, annual electricity bills came to $2972 and comprised only 2.7 per cent and 1 per cent of disposable income respectively. Households in Tasmania, typically have higher electricity consumption (and therefore bills) when compared to other states as the cooler climate generates greater heating requirements and very few households have access to natural gas.

Mr Reeves said that the 2012-13 report highlighted the importance of this assistance to households.

“The Retail Law provides important protections for consumers. Energy retailers have 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 on hardship issues 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 said.

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

Issued date: 
26 November 2013
AER reference: 
NR 030/13
Contact: 
Ms Meg Macfarlan, AER media unit 02 6243 1317 0408 995 408