30 October 2013
CHOICE is turning the heat up on energy retailers in a bid to close a loophole that allows them to increase energy prices without informing consumers before they’ve already taken effect.
The news comes a day after Energy Australia was named and shamed at the 8th annual CHOICE Shonky Awards for failing to disclose price rises to customers before slugging them with higher charges.
“How’s this for a business idea – you sell Australians an essential service, lock them into a long-term contract, but give yourself the right to increase the prices whenever you like. And when you do increase them, don’t tell your customers until after they’ve already racked up the bill and it’s too late to do anything about it,” says CHOICE CEO Alan Kirkland.
“This is exactly what we are seeing with electricity bills, which have been identified as the number one cost of living concern by Australian households. With prices increasing over 50 per cent in the past five years, the last thing we need is retailers exploiting the fine print to make this market even more confusing.
“That’s why today CHOICE is calling on all energy retailers, including Energy Australia, to lift their game and help Australians make informed choices.”
We think Australian energy users have the right to better information, helping them to:
Adjust their usage in response to price rises.
Budget for increased bills.
Shop around and see if they can get a better deal.
CHOICE is calling for:
Advance notice of price increases, including clear details of your new and old prices.
Clear personalised information about what price rises mean for your budget. For example, will the price increases mean an extra $5, $50 or $500 for your monthly or quarterly bills?
Clear information about your current energy plan so you can easily shop around.
“Energy Australia used to send customers a letter, explaining price rises in advance. Now they are exploiting a loophole in the new energy laws to delay information about price rises until the customer’s next bill, after the new prices have come into effect,” Mr Kirkland says.
“Energy Australia is one of the biggest energy retailers and we call on them to lift their game and put consumers first. If they don’t, then we call on governments to change the law and make it clear that consumers must be informed of price rises before they kick in.”
What has Energy Australia said to explain its current practice?
From the Energy Australia website at http://www.energyaustralia.com.au/residential/help-centre/faqs/pricing-rate-changes:
Why didn’t I receive written notice that my prices were increasing?
If you’re on a Market Contract
In the past, we sent our Market Contract customers a letter explaining any price changes, but since amending our terms and conditions to align with the scheduled introduction of the National Energy Customer Framework (NECF) and for business needs on 1 July 2012, we’ll advise you directly of any price changes in your first bill in which your new prices are effective. You can view your Market Contract terms and conditions from our Conditions and pricing page.
What do the National Energy Retail Rules say?
46 Tariffs and charges
(2) A retailer must set out in a market retail contract with a small customer all tariffs and charges payable by the customer.
(3) The retailer must give notice to the customer of any variation to the tariffs and charges that affects the customer.
(4) The notice must be given as soon as practicable, and in any event no later than the customer’s next bill.
- The NECF is a national customer protection framework for the retail sale of electricity and gas to residential and small business energy customers. Its implementation involves the transfer of current state and territory (except Western Australia and the Northern Territory) legislation to a single set of national Laws, Regulations and Rules. See http://www.scer.gov.au/workstreams/energy-market-reform/national-energy-customer-framework/
- The NECF (for residential and small business electricity customers) commenced in the Australian Capital Territory and Tasmania on 1 July 2012, in South Australia on 1 February 2013 and in New South Wales on 1 July 2013. Victoria will implement the NECF, subject to the resolution of state-specific issues. Queensland (QLD) aims to implement the NECF in 2014, subject to there being state-specific variations to support customers outside of south east QLD. See http://www.scer.gov.au/workstreams/energy-market-reform/national-energy-customer-framework/