The Australian Energy Regulator has published its 2nd annual report on retail market performance which provides a detailed picture of key issues in the South Australian retail energy market. The report also includes information on energy affordability.
The AER’s 2014 annual Performance and Affordability report includes information on the performance of retailers in a range of 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 SA in February 2013.
AER Board member Jim Cox said the report sheds light on key issues facing lower income households in SA:
- approx. 39,000 residential customers (5.2 per cent) in SA had an electricity bill debt with their retailer,
- average electricity debts were $667,
- approx. 17,000 residential gas customers (4.2 per cent) had a gas bill debt with their retailer,
- average gas debts’ were $287,
- approx. 24,000 (3.2 per cent) of SA electricity customers were using payment plans with their retailer to repay debt,
- a further 8600 (1.2 per cent) received assistance under retailer hardship programs to repay their debt - a 32 per cent increase over the previous year, and
- approx. 9,000 (2.3 per cent) gas customers were on payment plans. A further 2,800 (0.7 per cent) received assistance under hardship programs.
“South Australia has an above average number of customers on payment plans with a high level of debt. However, residential electricity disconnections for non-payment in SA have decreased by 5 per cent,” Mr 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 active 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”
Retailer hardship programs are mandatory and have to be approved by the AER.
“Our aim for the report is to highlight examples of good practice, as well as identifying areas of concern.” Mr Cox said
The report also sheds light on the affordability of energy in SA.
The average low income household (with no concession and on a market offer) spent:
- $1866 on electricity - an increase of 3 per cent.
- $996 on gas – an increase of 10 per cent
Mr Cox said the report was a timely reminder of 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.
The report also covers customer complaints about energy retailers. Complaints to retailers in SA have increased by 48 per cent.
Mr Cox said dissatisfied customers should feel confident to look at other options.
“If you’re not happy with your retailer or some aspect of your energy service, you can take your account somewhere else. Knowing that customers are prepared – and able – to do this keeps retailers on their toes.”
“One in ten South Australian energy customers has complained to their energy retailers, mainly about billing or customer service. The AER takes customer service issues seriously and has recently been active in relation to poor customer management.”
The AER has recently taken action against energy retailer EnergyAustralia for allegedly contravening the National Energy Retail Law by failing to obtain the explicit informed consent of customers before transferring them to new energy plans.