Simpler, fairer energy deals on the way

From 1 July 2019 EnergyAustralia customers will get simpler and fairer energy deals.

“Households, governments and regulators across the country have spoken. Buying electricity is too confusing, costs too much and takes up too much time,” said the head of EnergyAustralia’s customer business, Mark Collette.

“Doing things the way energy retailers have always done them isn’t working for families and businesses. So, today we’re straightening out the ‘confusopoly’ we’ve helped to create. From 1 July it will be a lot easier for customers with EnergyAustralia to spot a good deal and to save money on their power bills,” he said.

The major changes include:

• Automatically moving around 173,000 EnergyAustralia customers on old standing-offer rates to federal and Victoria government price “safety nets”, saving them between $130 and $487* a year
• Contacting an additional 450,000 customers with offers for simpler, fairer energy plans to reduce their power bills
• Eliminating frustrating plan features like pay on time discounts
• Applying discounts off the total energy bill (rather than off usage rates only)
• Making sure the prices customers sign up for apply for the full term of new contracts, and
• Lifting the bar for energy comparator services with standardised guidelines so customers can make easy comparisons wherever and however they choose to buy their energy.

Mr Collette said families, small businesses, governments and regulators had pushed the industry to do better. The new regulatory safety nets and major changes by EnergyAustralia would reduce or remove common “pain points” for customers, representing the biggest overhaul of industry practices since privatisation.

“People just want a simple and fair energy deal – it’s not too much to ask,” he said.

Meanwhile, electricity and gas prices for EnergyAustralia customers in New South Wales, Victoria, Queensland and South Australia will stay on hold as the company concentrates on delivering the changes.

Mr Collette said EnergyAustralia would contact more than 600,000 customers in the next few months, more than a third of its base, urging them to consider simpler, fairer deals that will save them money. This includes around 450,000 customers currently on market offers.

Already since May, about 43,000 existing EnergyAustralia customers have switched to a better deal.
EnergyAustralia’s remaining customers should be on great value offers already but, if in doubt, are encouraged to check their plans.

“Some customers we called were sceptical at first; they thought the offer was too good to be true, that it was some kind of a scam,” Mr Collette said.

“If you do get a call or an e-mail from EnergyAustralia, urging you to think about moving to a better offer, please don’t hang up or delete the message. It’s genuine, and could save you money,” he said.

-END-

Notes to editors:

• In 2018 EnergyAustralia committed to around $70 million of measures to mitigate, reduce or avoid electricity price rises for families and vulnerable customers.
• In 2019 EnergyAustralia is helping address other common customer “pain points” by introducing a new range of plans and implementing measures including:

o Fixing prices for the term of energy contracts
o Eliminating conditional discounting and exit fees
o Providing easily-understood discounts off the entire bill, rather than off parts of the bill
o Streamlining its suite of market products from five to three
o Keeping third-party comparators honest by only working with websites which present EnergyAustralia offers in a format that is easily understood and comparable

• The federal government announced in April it would introduce a default market offer (DMO) on 1 July 2019, effectively setting a maximum default price that retailers can charge for electricity in a region. The Victoria government is implementing a similar scheme, the Victoria default offer (VDO).
• The safety nets replace old standing offers, which were intended to be short-term bridges that meant no one was left without power while they found a competitive deal. However, many people never moved from these more expensive offers and were paying more for their power than they needed to.
• Under new government safety net offers:

o EnergyAustralia residential customers in New South Wales formerly on an old standing offer could save up to $130 off their electricity bills over 12 months [1]
o EnergyAustralia customers in Victoria formerly on an old standing offer could save up to $487 off their electricity bills over 12 months [2]
o EnergyAustralia customers in Queensland formerly on an old standing offer could save up to $173 off their electricity bills over 12 months [3]
o EnergyAustralia customers in South Australia formerly on an old standing offer could save up to $345 off their electricity bills over 12 months [4]

• It’s also the first time customers have had a consistent, transparent reference price, set by an independent umpire, that they can use to compare offers across the market
• * Estimated savings from SWOT to DMO based on 4.5 MWh annual electricity use in Energex distribution zone (QLD) on a flat tariff, post July 1 and AusNet (Vic) savings from SOT to VDO using ESC usage benchmark of 4MWh per annum on a flat tariff
• ^ Based on the average saving of a small business and residential customer on a market offer
• [1] Based on 3.9 MWh annual electricity use in Ausgrid distribution zone on a flat tariff, post July 1
• [2] Based on 4.0 MWh annual electricity use in AusNet distribution zone on a flat tariff, post July 1
• [3] Based on 4.6 MWh annual electricity use in Energex distribution zone on a flat tariff, post July 1
• [4] Based on 4.0 MWh annual electricity use on a flat tariff, post July 1