Energy sector ‘too complex’: ACCC

Coalition and Greens MPs are ramping up their demands for a royal commission into energy prices, as the Australian Competition and Consumer Commission (ACCC) labels the retail electricity market too complex and opaque, and heads to court with a supplier.

The ACCC has instigated proceedings in the Federal Court, alleging that between October 2017 and March 2018, Click Energy told consumers in Victoria and Queensland that they could get discounts of between seven and 29 per cent if they paid their bills on time.

The ACCC says the claims were false or misleading because the discounts offered applied to “Click Energy’s market offer rates, which varied and were higher than Click Energy’s standing offer rates.”

“When compared with Click Energy’s standing offer rates, the discounts were much lower than advertised. In some cases, there was no discount at all,” said ACCC chair Rod Sims.

“We believe that Click Energy’s conduct is among the worst practices we see in retail electricity marketing. We allege that consumers were misled about discounts and savings, with some consumers not getting any discount or savings at all.

“The retail electricity market is too complex and opaque. Customers need to trust that discounts and savings advertised by retailers are accurate so they can make informed choices about which products are best for them.

A push for a royal commission has hit a hurdle, despite a handful of government MPs also reportedly pushing Prime Minister Malcolm Turnbull for a full-blown inquiry, with crossbench senators Pauline Hanson and Derryn Hinch rejecting the move.

The Greens are also leading the charge for a commission of inquiry that would have similar powers to a royal commission.

Greens MP Adam Bandt says the industry is rife with profiteering and that in his home state of Victoria, up to 30 per cent of some customers’ bills was the energy retailers’ profit margin alone.

“There are some pricing practices that are just so opaque and we don’t know exactly what the big power companies are doing,” he told Sky News.

“All we know is that it costs a lot, so I think you need something that is going to be able to get in there, look at the practices, go behind closed doors, look at what the companies are actually doing to gain the evidence and build the case that we really need to go back to basics and start again from scratch.”

Mr Bandt blamed the soaring energy costs on the wave of privatisation in the sector since the 1990s.

“If they’re serious about wanting to tackle electricity prices, then there is one big lever that the Government can pull and that only the Government can pull, and that is re-regulation,” he said.

Soaring prices in the past decade have caused hardship for a big number of retirees struggling to make ends meet, with many households struggling to heat or cool their homes. But so far, little has been done to cut through confusing energy plan offers.

Comparison sites offer some help but they, too, are often compromised.

A YourLifeChoices investigation into sites that claim to give consumers the ability to assess energy plans and policies found that many are fronts for a select group of providers. Read the small print and you will find they are not impartial and thus cannot offer consumers unbiased comparisons across all products.

Would you support a royal commission into the energy sector? Do you know if you are getting the best deals available or are the plans too complex?

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Janelle Ward
Janelle Ward
Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.
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