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Tracking the cost of energy for a more transparent market

The Problem

Deregulation of Australia’s energy markets was supposed to bring about a new era of competition and consumer choice. Unfortunately for millions of Australians, it also paved the way for a market that was complex and confusing.

“Information overload” was how one of the submissions to the Australian Competition and Consumer Commission’s Retail Electricity Pricing Inquiry four years ago described trying to decipher their energy bill. While an internal customer research document from one electricity retailer –provided as evidence to the inquiry – conceded that customers were “generally dissatisfied with the complexity of bills”.

As ACCC chairman Rod Sims noted at the time, if the average person was unable to understand their bill, they were probably paying “far too much”.

The Challenge

Having access to accurate and timely data is crucial if consumers are to select an energy retailer and product that suits their circumstances. Yet, third parties have traditionally faced substantial barriers to accessing this information, ranging from business concerns about privacy or the complex processes required to publish data, through to consumers’ general lack of awareness about their rights.

St Vincent de Paul Society, a charity dedicated to supporting disadvantaged Australians, recognised this challenge more than a decade ago and began investigating ways to make the market more transparent, particularly for consumers who could least afford to be locked into expensive energy deals.

“We wanted to get in early and track what occurred in the market as deregulation kicked in,” said Gavin Dufty, general manager of policy and research at the charity. “Given the energy market is pretty opaque, we wanted to be able to get as much data out into the public domain and into the hands of consumers and other interested parties as possible … so that they could become better engaged in the market and make better informed decisions.”

The Project

The Vinnies’ Tariff-Tracking Project has been monitoring and reporting on changes to residential energy tariffs since 2010. Initially the research was self-funded and contained to the state of Victoria, however, with the support of Energy Consumers Australia, it has since expanded to most other states. It is the first and only open source of data on energy prices.

Reports – both national and state-specific – are released at least annually, giving consumers, consumer advocates and other stakeholders previously inaccessible insights into electricity, gas and solar price movements, market developments, such as new entrants and products, as well as policy changes.

The latest ECA grant, approved in mid-2020, has enabled St Vinnies to extend its tracking to changes to electricity and gas prices in NSW, QLD, SA, ACT and Tasmania in the wake of 2020, 2021 and 2022 price re-sets.

This analysis will culminate in the production of 18 new or updated reports that will inform policy makers, regulators and consumer advocates about trends and developments in these markets. 

The Impact

“I just wanted to let you know that because of the article you wrote … about how to save more on my bills, I changed my energy plan. I think it’s going to save me a good amount of money”.

It is consumer feedback such as this – sparked by a news article on the ABC – that speaks to the success of the project so far. A media-based advocacy strategy, aiming to boost consumer awareness, has been an important component of the initiative.

Following the release of the most recent national report, and subsequent media coverage, the Australian Government’s Energy Made Easy comparison website attracted increased traffic, with visitor numbers up 80 per cent on the previous week. Searches for energy plans almost doubled.

Mr Dufty said it was pleasing to see more people engaged with the market.

He said the tracking data was also informing policy and procedures within St Vinnies’, ensuring that staff and support workers had relevant information to ensure that vulnerable clients “were not getting ripped off”.

“We like to think that the St Vinnies brand has gone some way to motivating people to take a second look at their energy accounts and see if they can get a better deal,” he said. “We want to see households directly benefit with more money in their pockets, and not in the pockets of the big energy companies.”

The Vinnies’ Tariff-Tracking project has had other benefits too, informing numerous regulatory and policy reviews, while consumer groups and other stakeholders have been using the reports to produce research for submissions.

It also encouraged ECA to establish its own tracking project aimed at business customers, The Small and Medium Enterprise Retail Tracker, which is a similar spreadsheet-based tool that allows consumer advocates, and other interested parties, to compare prices and produce their own analysis.

ECA chief executive Lynne Gallagher said independent tracking and publicly reporting on energy prices played a key role in applying downward pressure on excessive pricing and margins: “By reporting on market developments and new trends, this project makes consumers more aware, and therefore confident in their decision making, which also contributes to a more competitive market”.

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