Energy Consumers Australia (ECA) thanks the Australian Energy Market Commission (AEMC) for the opportunity to provide comment on its Consultation Paper, Improving the accuracy of customer transfers (the Consultation Paper).
The Long term interest of consumers of energy services is promoted by economic efficiency. Achieving efficient outcomes for electricity consumers can be broken down into three different tasks. Firstly, there must be strict structural separation of potentially competitive markets from natural monopolies. Secondly, “best practice” economic regulation must be applied to natural monopoly elements of the supply chain. Finally, there must be effective competition in those markets that are potentially competitive.
A key element of effective competition in retail markets is that a consumer can easily exercise choice and, once exercised, their choice can be acted upon. Delays in customer transfer not only restrict immediate choice. If the transfer process is identified as a “hassle”, this will dissuade other customers entering the market and transferring.
It should not be assumed, however, that retailers uniformly take the view that transfer should be easy. In their ideal world, transferring away is hard, while transferring in is easy. It is difficult to generalise about how these twin but contradictory forces play out in the decision making of any individual retailer.
ECA is disappointed that improving the ease of customer transfers, identified as a concern in 2012, is only being acted on in 2016. ECA hopes that this will not be the norm in terms of how market bodies pursue issues that promote the long term interests of consumers.
The AEMC Consultation Paper identifies two specific issues to be addressed through the rule changes; address standardisation and resolving erroneous transfers. These are discussed further below. ECA proposes changes to the proposals contained in the consultation paper, including in relation to how energy retailers can be better brought into the process to develop solutions that will serve the long term interests of consumers.
The full submission can be read here.