Malcolm Turnbull has summoned the chiefs of major power companies to a meeting on Wednesday to discuss how customers can be given some relief on electricity prices through better deals.
Turnbull says many households and businesses are apparently paying significantly more than they should be, as they are pushed onto higher plans. They need to be given better information so they can seek better deals, he says.
“This situation must be addressed – urgently and directly,” Turnbull writes in a letter to the companies. He will be seeking the executives’ views on “what the electricity sector can do to ensure no family pays any more for electricity than it needs to”.
The initiative follows the government’s earlier intervention in the gas market to boost local supplies, and reflects its sensitivity to both the substance and politics of the energy issue. It is yet to make a decision on the recommendation of the Finkel report for a clean energy target, although it has accepted the other recommendations from the chief scientist’s report.
In his letter, Turnbull says the electricity price rises of the past decade have “put serious strain on Australian households and businesses. Disconnections have risen sharply in some states, and there are reports of spikes in the number of people suffering financial stress.”
Given Australia’s abundant energy, “it is simply not good enough that some families and businesses cannot always afford to turn on their lights, heating and equipment”.
Turnbull points to the government’s actions on the policy front but says that as families are feeling pressure currently “it is important to ensure no family pays a cent more for electricity than it needs to.
"I am particularly concerned by reports that customers are being pushed from discounted market rates to higher priced standard contracts or non-discounted plans often without realising it.
"The Australian Energy Markets Commission’s (AEMC) Retail Competition report found 47% of residential and 54% of small businesses have not switched electricity retailer or plan in the last five years. This suggests that these households and businesses are paying significantly more than they need to,” the letter says.
St Vincent de Paul, the Grattan Institute and the AEMC had pointed to “a lack of disclosure by retailers about the price/bill impact at the end of the discount period as a major problem. AEMC says small consumers are not receiving adequate information on costs and consumption.”
According to St Vincent de Paul, in Victoria a household with typical consumption could save up to A$830 annually by moving from the worst market offer to the best. The Australian Energy Regulator identified households savings up to $900, $1,400 and $,1500 respectively in Queensland, New South Wales and South Australia by going from worst-to-best deal.
Invitees to the meeting are: Catherine Tanna (Energy Australia); Frank Calabria (Origin Energy); Andy Vesey (AGL); Paul Broad (Snowy Hydro); Paul Geason (Momentum Energy); Jeff Dimey (Alinta Energy); Carly Wishart (Simply Energy); and Matthew Warren (Australian Energy Council).
Also there will be Treasurer Scott Morrison and Energy Minister Josh Frydenberg.