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From the CEO
We hope this finds you well, and keeping safe, as we see some communities are again under pressure and having to go back into lock down to get community transmission under control, while for some of us there is more freedom.
We continue to work from home at Energy Consumers Australia and experience both the benefits of engaging on-line but also the toll it can take on us physically and mentally.
Whether it is being in my home environment, or because this is an extraordinary time, cultural references keep popping into my head as I work through the issues that come across my desk. Douglas Adams’ words about remaining calm on the cover of the Hitchhiker’s Guide to the Galaxy come up at least once a week. And Australians of a certain generation will remember the fridge magnet distributed by a former Prime Minister, asking the community to “Be Alert, but not alarmed”:
It was a very busy June for us here at Energy Consumers Australia and a hugely important one as we enter into a new financial year. Our top-of-mind focus has been on power prices and energy bills, and related to that, whether assistance is being provided to everyone who needs it so that they are not disconnected or going without the power they need.
In May we began signalling our expectation that prices should be lower from 1 July 2020 because of lower wholesale and network costs. We put this to the Australian Energy Regulator (AER) when they were re-setting the Default Market Offer reference price.
This week retailers wrote to all customers to advise them of price changes as they are now required to do, but it can be difficult even for us at Energy Consumers Australia to identify what price changes have been made. This lack of transparency remains an issue, that reinforces the lack of confidence and trust that consumers have in the energy market.
What we do know is that of the three major retailers, AGL announced falls in electricity prices of between 1.25 and 2.5 % in Queensland and South Australia. In New South Wales AGL gas customers will have lower prices, but no change in electricity prices, while customers in Queensland and South Australia will see higher gas prices. Origin Energy announced lower electricity and gas prices for both residential and small business customers, with the price falls being more substantial in Queensland and South Australia than in New South Wales and the ACT.
In this context, of how retail energy businesses are delivering for customers, the Australian Energy Market Commission (AEMC) and the AER both released important reports this week, which I see as “must reads” to get an understanding of the performance of the energy market.
The AER’s State of the energy market 2020 gives a deep-dive examination of the Australian energy sector, and this year includes a dedicated analysis of the transition underway in energy markets, including the active participation of consumers investing in generation and storage.
The AEMC in its 2020 Retail Energy Competition Review, using data from Energy Consumers Australia’s Energy Consumer Sentiment Survey (ECSS) said that “higher satisfaction levels are welcome news for the retail sector, although customers clearly think there is still room to improve.”
In our ECSS June 2020 report some key findings are that:
- satisfaction with the overall delivery of electricity and gas services is up 8% (to 77%) for household consumers and 12% (to 71%) for small business;
- all states now rate value for money of their electricity service above 50% for the first time, and the national result on this measure was up10% (to 57%);
- while the rise in satisfaction with value for money is positive, electricity still trails the next lowest rated essential service on this measure by 11% (gas and insurance were both at 68%.
- We also released our June 2020 SME Retail Tariff Tracker report. This shows that since April 2016, electricity bills for small businesses rose steeply, but more recently have begun to come down – which is consistent with the electricity price index published by the Australian Bureau of Statistics. Gas bills on the other hand have trended up slightly or remained steady since April 2016, with the exception of Western Australia.
We also released our June 2020 SME Retail Tariff Tracker report. This shows that since April 2016, electricity bills for small businesses rose steeply, but more recently have begun to come down – which is consistent with the electricity price index published by the Australian Bureau of Statistics. Gas bills on the other hand have trended up slightly or remained steady since April 2016, with the exception of Western Australia
Both the ECSS and the SME Retail Tariff Tracker collected information in March and early April, and since then the need to contain the COVID-19 pandemic has had significant impacts on people and the economy. With this in mind, we undertook additional research.
For small business, we provided supplementary information in our Energy related hardship report on the assistance measures available. We also asked focus groups and a survey of over 1,000 households about their experiences in accessing support to manage their bills, including energy.
In our research we found that a majority of households rank electricity bills as in the top 3 bills that they are concerned about. Further, most households reported that they cannot remember the last time their retailer sent information to them at all. Around half of those that did recall, did not rate the information as ‘useful’ and over a third found the information ‘hard to understand’.
The Consumer Policy Research Centre (CPRC) also released the first results of its research on the impact of COVID-19 on consumers, which it will continue from now until October. CPRC reported that:
- 12 million Australians are concerned about the impact of COVID-19 on their financial wellbeing; 1 in 5 are ‘very’ concerned
- Almost half of Australians (49%) are taking steps to manage their household expenses including dipping into savings (28%) and using credit cards or buy-now-pay-later services (22%)
- More than 1 in 4 Australians are worried about their ability to pay rent, mortgage repayments and energy bills.
If you would like to discuss with us any of our research, please email Kerry Connors.
In June, along with the other organisations that sought authorisation for a New Energy Tech Consumer Code (NETCC), we participated in the appeal process before the Australian Competition Tribunal (ACT). The NETCC aims to set a minimum standard of customer service for customers looking to purchase behind the meter products including technologies such as solar, battery energy storage systems and electric vehicle charging products. We would hope that if the ACT approves the code, the NETCC will better protect consumers looking to take charge of their energy usage and supply.
We believe collaboration with other consumer organisations and stakeholders is key and our activities last month certainly reflect that.
- working with the members of the End-Users Consultative Group (EUCG), that engages with The Energy Charter CEO Council, signatories and the Independent Accountability Panel. The EUCG is developing their expectations for the second year of The Energy Charter disclosures;
- we are working closely with the Energy Security Board, the AEMC, AER and the Australian Energy Market Operator on the important reforms and design questions that go to a transition in the energy market that can demonstrate how residential and small consumers can have better outcomes;
- supporting the AER’s Consumer Reference Group on inflation and the rate of return, as these parameters have a significant impact on the network component of people’s electricity and gas bills (around 50%);
- supporting Mark Byrne from the Total Environment Centre and Kellie Caught from the Australian Council of Social Services, to bring to fruition the result of over twelve months of work on a consumer-led agenda on access and pricing. I want to thank the Distributed Energy Integration Program partners for supporting a successful and an innovative process, that was out of their comfort zone at times.
We would like to congratulate the members of the Independent Accountability Panel of the Energy Charter on their appointment – Clare Petre as Chair, Andrew Richards and Cassandra Goldie. This is an important year for The Energy Charter to show how its actions have benefitted customers.
On a personal note, there is some sadness in the departures of three of our colleagues from the Queensland Council of Social Service. Fiona Hawthorne, Rose McGrath and Luke Reade have been amazing colleagues and untiring in their advocacy for vulnerable and regional consumers in Queensland.
Thank you for the opportunity to catch up with you every month. If you have feedback, questions or comments, please connect with us via our social media (links below) or reach out through our Share Your Story page here.
Stay safe and well,
Chief Executive Officer (Interim)
Energy costs improving but still the top cost of living concern in COVID-19 crisis
We have released new research showing green shoots of improvement in consumer sentiment following a period of flat or lower energy prices. But the study also shows anxiety about energy bills with the combined impact of working from home, social isolation and winter energy spikes, as well as concern about a lack of effective communications by energy companies on hardship support in the current crisis.
- SME Retail Tariff Tracker Final Report Media Release June 2020
- Energy prices moderating but better support needed for consumers
- Network cost reductions must be passed through to consumers by retailers
Submission to the Draft Guidelines to make the Integrated System Plan Actionable
We broadly support the Guidelines which will provide a clear framework for AEMO to undertake its role as the author of the Integrated System Plan.
- Submission to AEMC Deferral of Network Charges Rule 2020
- Submission to the Technology Investment Roadmap Discussion Paper
- Submission to the AER Victorian Electricity Distributors Regulatory Proposals 2021-26
Consumer Forum on AEMO Rule Change: July 7th
- We have organised a Consumer Forum for 7 July on AEMO’s Rule Change request to establish DER Technical Standards and the initial standard AEMO is proposing. If you would like to join and haven’t received a direct invitation please contact David Havyatt here.
Consumer Forum on consulting on the CDR Rules Framework: TBC
- With the excellent news on 29 June that Treasurer Josh Frydenberg has made the designation instrument for the Consumer Data Right (CDR) for energy, the starter’s gun has been fired. The next step will be the ACCC consulting on the Rules Framework. We will organise another consumer forum when that consultation is underway. To be sure you are advised when this occurs email David Havyatt here.
Energy Network Industry Awards applications now open
- Applications for the 2020 Energy Consumers Australia Energy Network Consumer Engagement Award which we present in partnership with Energy Networks Australia will officially open from July 1st. This award recognises an Australian energy network business that demonstrates outstanding leadership in consumer engagement. Further details can be seen here.