Market Deals Still Best Way to Save on Bills

Encouraging households to shop around for better electricity deals, and not price re-regulation, is the key to delivering lower power bills, the energy industry said today.

The Australian Energy Council’s Chief Executive Sarah McNamara said that electricity retailers were committed to developing tools and simplifying bills to encourage customers to shift to lower priced market offers.

“The ACCC said that the annual savings attributable to its default price recommendation would be between $105 and $165.

“This is much lower than the $832 savings per year suggested today – savings of that magnitude are only available for a customer who switched from the highest priced offer in the market to the cheapest deal. For the majority of customers who have already switched to a market offer, the government’s proposed default price won’t lower their bills.

“The quickest way to save money on your energy bills is to shop around. The Government’s own EnergyMadeEasy website is a useful tool to help customers switch to a cheaper deal. Any customers who remain on the default price, regulated or not, will be paying more than they need to."

Ms McNamara said that the AEC supports the Government’s decision to implement an indicative benchmark price off which discounts must be calculated. “This is a simple and effective measure to improve market transparency,” she said.

Ms McNamara also said the Government’s other energy proposals required careful consideration and implementation to avoid unintended consequences.

“The detail of these interventions need to be worked through. But they do not fill the policy vacuum which has been ongoing since the demise of the National Energy Guarantee.

“The AEC will engage with the government on how any underwriting of firm generation might work, given interventions of this kind have the potential to distort the market. The AEC remains supportive of the reliability obligation to be discussed at Friday’s COAG meeting.”

About the Australian Energy Council

The Council represents 22 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.