The energy market has been described as “broken” in a new report published by the ACCC on Wednesday, which claims that consumers are being charged over the odds for electricity – with many older Aussies unable to afford their skyrocketing bills.
The Australian Competition and Consumer Commission (ACCC) found that the average Aussie household could save as much as $415 per year on their electricity bill and have made 56 recommendations of ways to improve the National Electricity Market following a public inquiry, ordered by the Treasurer.
“It is clear that most households are paying far too much for electricity,” said ACCC Chair Rod Sims, “In addition, some of the most vulnerable in our community are forced to struggle through freezing winters and scorching summers, with many others also having difficulty paying their bills.”
The Retail Electricity Pricing Inquiry, which began in May 2017, looked at the root cause for rising energy prises in Australia and identified ways to improve the market, including funding for organisations to help vulnerable consumers, including the elderly, to better understand the market and choose a low-cost electricity offer that suits their needs.
Sims added: “The ACCC’s affordability measures for consumers also include improvements to state and territory concession schemes, and funding for organisations to assist vulnerable consumers to choose a low-priced electricity offer that suits their circumstances. One of the most important recommendations is to move customers off excessively high ‘standing’ offers to a new standard ‘default’ offer to be independently set by the Australian Energy Regulator.”
Already @The_Nationals are using the ACCC recommendations to continue the Coalition's civil war over energy policy. As long as @TurnbullMalcolm is held captive by the hard-right his energy policy paralysis will continue – meaning higher power prices for households & businesses. https://t.co/Ne9KpemUL9
— Mark Butler MP (@Mark_Butler_MP) July 11, 2018
Minister for the Environment & Energy Josh Frydenburg spoke to ABC radio host Kim Landers about the report, he said: “Well this is a very comprehensive and important piece of work. The clear message is that the market is not working in the best interests of consumers. The ACCC have made a number of recommendations around the retail market, around networks and around wholesale and generation costs – all developed to reduce power prices.”
However Shadow Minister for Climate Change and Energy Mark Butler was unconvinced, predicting that prices will continue to rise. He wrote: “Already @The_Nationals are using the ACCC recommendations to continue the Coalition’s civil war over energy policy.”
COTA Australia welcomed the report’s recommendations and have called on the Federal government to take action, as Chief Executive Ian Yates said the ACCC’s report includes a series of important consumer focused suggestions that could reduce their cost of living pressures faced by older Australians.
“Energy prices are going up and up and older Australians, particularly retirees on age pensions, are struggling with the rising cost pressures forcing them to cut spending in other areas such as health,’ he said, “The ACCC report released today is a step in the right direction to ensuring the rights of older Australians in the electricity market are properly accounted for.”
Some of the recommendations made by the ACCC include abolishing the current retail ‘standing’ offers and replacing them with a new ‘default’ offer across all retailers and limiting companies with 20 per cent or more market share from acquiring more generation capacity.
The report also suggests the drafting of a mandatory code for comparator websites, to ensure offers are recommended based on customer benefit, not commissions paid, and increasing the Australian Energy Regulator’s powers to investigate and address problems in the market and increasing penalties for serious wrongdoing.
Sims added: “The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses.
“There are many reasons Australia has the electricity affordability issues we are now facing. Wholesale and retail markets are too concentrated. Regulation and poorly designed policy have added significant costs to electricity bills. Retailers’ marketing of discounts are inconsistent and confusing to consumers and have left many consumers on excessively high ‘standing’ offers.”