AER Retail Market Performance and Affordability Report - NSW highlights

The Australian Energy Regulator (AER) has published its 2nd annual report on retail market performance, which for the first time includes information about energy market issues in New South Wales. The report also includes information on energy affordability.

The AER’s 2014 annual Performance and Affordability report for the first time includes information on the performance of NSW retailers in a range of key areas, including the number of customers in debt, debt levels, the number of disconnections, as well as information on the number of customers who are in retailer hardship programs. Information on retailers’ customer service levels, including complaint rates, is also provided.

The National Energy Retail Law commenced in NSW in July 2013.

As this is the first time the report examines NSW, this year’s report will act as a benchmark to monitor future trends in the market. The report sheds light on the key issues facing lower income households:

  • approx. 108,000 residential customers (3.6 per cent) in NSW had an electricity bill debt with their retailer,
  • the average electricity debt was $529,
  • approx. 51,000 residential gas customers (4.3 per cent) had a gas bill debt with their retailer,
  • the average gas debt was $395,
  • approx. 63,000 (2 per cent) electricity customers were using payment plans with their retailer to repay debt,
  • a further 18,000 (0.6 per cent) received assistance under retailer hardship programs to repay their debt,
  • approx. 11,000 (1 per cent) gas customers were on payment plans, and
  • a further 4,000 (0.3 per cent) received assistance under hardship programs.

“New South Wales has the most customers on payment plans although the average debts were less than in other States,” AER Board member Jim Cox said.

“This suggests that many customers are taking steps to manage their debt before being threatened with disconnection and that retailers are being more proactive in identifying customers with financial problems.”

“Help under a retailer’s hardship program can include tailored payment plans based on what a customer can afford to pay. As long as a customer is making the agreed repayments, they shouldn’t be disconnected” Mr Cox said.

“If you experience financial difficulties, it is important to speak to your energy retailer early, to avoid the of risk disconnection.”

Residential energy disconnections in NSW increased by 32 per cent in 2013-14.

“Our investigations indicate that this rise was mainly due to changes to one retailer’s business practices,” Mr Cox said.

“We will continue to monitor disconnections to ensure that retailers meet their obligations. Disconnection should be a last resort for retailers when customers are unable to pay their bills. We investigate potential breaches of the National Energy Rules and businesses that do not comply could face infringement notices, court enforceable undertakings, or even court action.”

Retailer hardship programs are mandatory and have to be approved by the AER.

The report also sheds light on affordability of energy in NSW.

The average low income household (with no concession and on a market offer) spent:

  • $1718 on electricity - an increase of 4.3 per cent.
  • $893 on gas – an increase of 4.5 per cent

Mr Cox said that while NSW customers were already active in the market – with 63 per cent of electricity customers and 72 per cent of gas customers on market contracts – the report was a timely reminder about the benefits of shopping around.

“There can be big differences between the most expensive and least expensive energy offer, even in the same area, so it is definitely worth looking to see if there is a better energy offer available.”

“Our Energy Made Easy website (www.energymadeeasy.gov.au) is a handy resource to help consumers compare the electricity deals in their area. It’s a free government website, so you can trust it’s not influenced by commercial interests,” Mr Cox said.

Mr Cox said dissatisfied customers should feel confident to look at other options.

Issued date: 
25 November 2014
AER reference: 
NR 22/14