The energy market regulator is launching a plan to create a one-stop shop where householders can switch to cheaper electricity and gas retail deals with the click of a mouse, while it calls for sweeping reforms to boost protections for customers who are being let down by the current system.
Power prices will remain front of mind for most Australians. A global energy crunch has sent electricity prices soaring by 25 per cent on average, or $300, since April and they are forecast to rise a further 30 per cent next year.
Australian Energy Regulator chairwoman Clare Savage.Credit:Dan Peled
The Australian Energy Regulator, which sets the rules for the energy market, said there were about 1 million searches executed on the comparison website in 2022 but of those, only about 5 per cent, or 70,000 people, switched their retailers.
The regulator already runs the Energy Made Easy website where customers can compare their current electricity deals with those from other retailers.
Australian Energy Regulator chair Clare Savage is aiming to have a new system up and running by the middle of next year so that users can click through to sign up to better deals from the Energy Made Easy website.
“If you could actually make it easier for consumers to do the searching to switch in one move, we’d actually see consumers paying less on their energy bills,” Savage said.
“We want to make it so that you can click on our website and it takes you straight through to the retailer’s website, where you can access the same deal – so you can complete the switching process there.”
Under the Better Bills initiative, due to kick in by 2025, retailers will be required to print on the front page of their bills if a customer is on the best deal on offer from their retailers.
Victoria does not participate in the National Energy Retail Law and operates its own system, including a state-run energy deal comparison website.
On Wednesday, the Australian Energy Regulator launched the Towards Energy Equity plan.
Savage said she was seeking a “game changer” to improve the outcomes for those enduring hardships, such as mental illness, who were struggling to pay their energy bills.
“Someone who’s been working in the vulnerability space for all their lives said to me that nothing’s changed for 20 years. The reflection I had on that was, well, I’ve actually worked in this system for 20 years and it may be that the way I’ve been thinking about it is part of the problem, too.”
Savage said she previously thought problems with the current hardship system would be solved outside the energy market, through the welfare system, and people would use assistance to pay their gas and electricity bills. Customers who are struggling to pay their bills can enter a hardship program with their retailer that allows them to delay and stagger their repayments.
Savage said 2.7 per cent of energy customers had been in debt on their bills for more than 90 days and a quarter of them were $2500 in arrears. “If you’ve got 10 or 20 bucks spare and maybe less a week, you’re not coming back from that,” she said.
The regulator will consult energy industry stakeholders including retailers, electricity generators and network operators, and present a finalised proposal to the federal energy minister by the middle of next year.
The consultation will include a proposal for a centralised agency to deliver financial and social support for vulnerable customers as well as a government-funded “reinsurance pool” that would fund retailers to financially support customers in hardship.
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