New measures to protect loyal energy customers in Australia

The Australian Government has lately criticised the nation’s large energy retailers for penalising loyal customers and tricking new customers with deceptive offers, including ‘big sticker discounts’. We are now starting to see the first steps nationally to protect consumers from overpaying for electricity. [1]

We’ve previously written about what you typically need to do to get a fair deal on electricity in Australia. It’s not only a painful process but an absolutely unfair one. To cut the long story short, if you’re too busy to switch electricity plans every quarter or year, you get penalised. Yes, it’s shocking that you pay for your loyalty rather than get rewarded for it! But it’s not just that, the tricky terms and conditions that electricity retailers use to label their discounts end up misleading customers about which deal is best for them.

While the rising cost of electricity has been discussed for a long time, no real action has been taken to protect consumers, until very recently. The Australian Government has now confirmed that it will adopt a number of recommendations from the Australian Competition and Consumer Commission’s (ACCC) Retail Electricity Pricing Inquiry. In an effort to reduce electricity prices, the government has asked the Australian Energy Regulator (AER) to work on setting a maximum default market tariff and updating consumer protections immediately. [2]

The government will introduce the following new changes that will impact customers directly:
• Introducing a new ‘default offer’ by July 2019 that will replace the current standing offers
• The default offer is said to save some consumers up to $832 on electricity bills annually
• Introducing a reference bill for each region, which acts as a common reference point to help consumers understand and compare offers to find the best deal

In Victoria, an Independent Review into the Electricity and Gas Retail Markets, released in August 2017, revealed that the retailers’ approaches to marketing, pricing and contracting had left customers unwilling or unable to navigate the market. As a result, the Essential Services Commission has created new customer entitlements that need to be applied by energy retailers in Victoria. While you can access the full report here, we’ve listed these entitlements in brief below:

• The display of the ‘best offer’ on customers’ bills
• Prior notice to customers about any changes that will affect their bill
• A ‘clear advice entitlement’ that requires retailers to be upfront with customers about any terms in the contract that could lead them to paying more than they expect

The entitlements force electricity retailers to communicate clearly with customers and act in their interest. We fully support these steps to bring about much-needed transparency in the market. In fact, the lack of fairness has been one of our biggest motivators to enter the Australian retail electricity market. When we launch later this year, we won’t be swarming the market with 100 different energy plans and enticing people with sign up discounts, but rather, provide all customers everyday low prices. In the meantime, we’ll continue working on the launch with the business endeavour to provide fair electricity pricing for our customers.

For more information on our launch, please visit www.elysianenergy.com.au.

 

[1] https://www.heraldsun.com.au/business/the-hoax-australians-have-been-sold-on-electricity/news-story/c4424f54ae396b545b2d7031183050ea

[2] https://www.aer.gov.au/system/files/Letter%20to%20the%20AER%20Chair%20-%20dafault%20pricing.pdf

Elysian Energy
Elysian Energy