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Better deals are out there.
FIFTY per cent of electricity customers have not shopped around for a new plan in the last five years, potentially missing out on nearly $400 savings a year, a new report has found.
The latest national energy retail competition review, released by the Australian Energy Market Commission, found while overall competition is driving down prices, many customers aren’t bothering to reap the benefits.
The review found as the range of prices and services available grows, the benefits of shopping around regularly become more substantial.
According to the AEMC, for typical customers switching from a default offer to a competitive market offer, savings could be up to $140 in South East Queensland, $256 in NSW, $383 in Victoria and $312 in South Australia.
The AEMC says energy retail competition is less effective in the ACT, and effective competition is “yet to emerge†in Tasmania and regional Queensland.
The third annual review only covers states across the National Electricity Market, which excludes Western Australia and the Northern Territory.
While the proportion of customers on higher-priced standing offers has declined, the AEMC’s 2016 customer survey suggests around half of customers have not switched electricity retailers in the last five years.
“These customers could probably find a better deal in today’s market,†the report says.
The report found that while consumers know they have the option to switch and save, many are still not aware of the information available on government-run comparison websites such as the Australian Energy Regulator’s Energy Made Easy.
Around 90 per cent of consumers surveyed were aware they can switch, around 30 per cent were actively investigating their options, and 19 per cent switched retailers in 2015.
Surveys of vulnerable customers showed those who had switched their provider or plan found the process easier than expected.
Overall, the proportion of consumers who were satisfied with their electricity retailer increased to 73 per cent, up from 69 per cent in 2015 and 66 per cent in 2014. Seven per cent said they were dissatisfied.
The report comes as power bills in NSW, South Australia and Tasmania in particular are set to skyrocket from July 1.
AEMC Chairman John Pierce said a “new era in energy competition†was emerging as the traditional centralised energy supply model is replaced by new products and services.
“Our research shows many consumers find new technologies appealing, but there are significant gaps in consumer access to information about what these technologies could deliver for them,†he said.
The review recommends that states and territories consider actions to improve consumer access to benefits being offered in electricity and gas markets so all types of consumers have the opportunity to take advantage of competition.
“Detailed analysis of how the market can best respond to the needs of different groups of consumers shows that vulnerable consumers would benefit more than any other group from greater awareness about how to find the best energy deal for their circumstances and the support services available,†Mr Pierce said.
In NSW, the number of electricity retailers has risen from 13 in 2014 to 22 in 2016, and from 17 to 22 in Victoria. Consumer satisfaction with the level of choice has risen 13 percentage points in three years.