Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC

THE recent royal commission eroded what precarious trust many had left in banks, but a recent Australian Energy Market Commission survey suggests the public rates their energy retailers even lower. 
Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC Trust low, prices up, loyalty doesn't pay and comparison sites don't work: AEMC

People trust their banks more than their power providers.

Its Retail Energy Review 2018, released today, finds confidence is low.
 
The Australian Energy Market Commission has said results from its recent survey found that 39% of people trust their energy companies, down from an already unimpressive 50% the previous year. 
 
"Consumers say they are less satisfied with the value for money in the electricity and gas sectors than they are with banking, mobile phones, internet, water and insurance services," today's report said. 
 
"Over the last 12 months, the confidence or trust that consumers have in the sector is taking a bit of a battering," chairman John Pierce told the ABC this morning. 
 
Power prices have risen sharply by $110 to $316 on average (except for southeast Queensland) and gas prices have increased by $14 to $192. 
 
A recent investigation by the Australian Competition and Consumer Commission found much of the cost comes from network charges and maintenance of poles and wires, something AEMC suggests could be changed. 
 
On every measure confidence is down: confidence the market is working in customer interest fell to 25%; confidence in available information fell to 50%; confidence in their ability to make energy market-related decisions fell to 58%; satisfaction with the level of competition fell to 43% and satisfaction in value for money for electricity fell to 44% and for gas to 60%. 
 
Confusing bills were also sledged.
 
Smaller companies are making inroads into the big three energy companies' market share  but these tend to do well only when they have their own assets. 
 
"Customers who take the initiative and threaten to change retailers are often rewarded with the best pricing," the report said. 
 
However "loyal customers are rarely offered the best deals". 
 
"The confusing aspects of pricing and product offering behaviour are within retailers' control. Retailers can change their offers to make them simpler to understand," it said.
 
The other solution to this seems simple: compare the market. 
 
However, those sites are actually part of the problem, with many lacking transparency about the range of offers covered and the fees and commissions paid by retailers. 
 
Not only can they not offer the best deals to consumers they also contribute to higher marketing costs for retailers, which may be paid for by consumers.
 
Further, "consumer awareness of government power bill comparison websites like Energy Made Easy remains low". 
 
Unfortunately it seems that the Commonwealth energy minister's awareness of that fact also remains low after a release from his office this morning trumpeted its success. 
 
"Australians have used the Energy Made Easy price comparator website more than one million times since the government's meetings with energy retailers in August last year," Josh Frydenberg said this morning. 
 
"This means many more Australians are taking charge of their energy bills and shopping around to reduce their energy costs."
 
Treasurer Scott Morrison's third budget, handed down in May included $28 million towards helping households seek better energy prices by collecting their data and giving it to consumer groups. 
 
It will provide funding for the Australian Energy Market Operator, which already collects data from the major power companies, to make data available to consumer groups and comparison websites, beyond what leading group Choice already provides. 
 
Choice was not one of those named in AEMC report as a comparator site pushing up prices. 
The sunniest spot in the report is solar. 
 
There has been a 25% increase in uptake last year over 2016 and 1.8 million households now having solar panels. 
 
Not only are solar rooftop installations growing fast, but those who have installed it report high satisfaction. 
 
Between 2014 and 2016 85% of people who installed solar "were satisfied with the process and 80% thought their system offered good value for money". 

 

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