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Reducing Customers’ Switching Times – Consultation Paper: Submission

We appreciate the opportunity to respond to the Australian Energy Market Commission’s (AEMC) Reducing Customers’ Switching Times, Consultation Paper.

High prices for energy continue to cause significant and ongoing detriment for households and small businesses, despite the recent easing of price pressures in the last twelve months. In the latest Energy Consumer Sentiment Survey (ECSS), less than half the surveyed households and small businesses were satisfied with the value for money of their electricity services. 1)ECA, Consumer Sentiment Survey June 2019, p.8. Only around one in three respondents to the June 2019 survey indicate that they believe the market is working in their interests.2)ECA, Consumer Sentiment Survey June 2019, p.7.

In this context we welcome this rule change proposal to act on recommendations 8 (rules for ‘save’ activity by retailers) and 9 (speeding-up customer transfers) of the Australian Competition and Consumer Commission (ACCC) Retail Electricity Pricing Inquiry Report. Making switching faster and easier is good for consumers and can increase the competitive pressure on retailers to deliver better and more affordable services.

We therefore support the intent of the rule change and offer suggestions about the detailed design to improve the effectiveness of these important reforms. Specifically:

1. Preserve the ‘cooling off’ period but run it in parallel to a compressed customer transfer process, to deliver a faster and more convenient switching experience for consumers while maintaining important consumer protections.

2. Support new reporting requirements in relation to switching timeframes to allow market bodies to monitor implementation, with the AER to provide advice to the AEMC about non-compliance and enforcement action.

3. Extend the coverage of the Sustainable Payment Plans Framework and improve reporting about retailers’ debt management activities.

It is important to note however that improving switching is not a panacea. Progress on implementing the ACCC’s 56 recommendations has been mixed, and big questions remain about the sector’s commitment to energy service innovation. Consumers are telling us they want much greater control over their energy use and their bills. This goes well beyond an easier experience at the point of sale, but to the provision of real-time information and feedback about their consumption, and tools (apps etc.) to allow them to more easily and cheaply do what they need to do in their homes and in their businesses.

The full submission can be read here.

References   [ + ]

1. ECA, Consumer Sentiment Survey June 2019, p.8.
2. ECA, Consumer Sentiment Survey June 2019, p.7.

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