Prime Minister Malcolm Turnbull has called a meeting with the heads of Australia’s major power companies on Wednesday to discuss how customers can be given relief on electricity prices.
Many households and businesses are paying significantly more than they should be and they need to be given better information so they can seek better deals, according to the PM.
“This situation must be addressed – urgently and directly,” Mr Turnbull wrote in a letter to the companies.
He said he would be seeking the executives’ views on what the electricity sector can do to ensure Australian families aren’t paying more for electricity than they need to.
In his letter, Mr Turnbull said electricity price rises in 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,” he wrote.
“It is simply not good enough that some families and businesses cannot always afford to turn on their lights, heating and equipment.”
The Prime Minister said he was particularly concerned by reports customers are being pushed to higher-priced standard contracts or non-discounted plans, often without realising.
The Australian Energy Markets Commission’s (AEMC) Retail Competition report found 47 per cent of residential and 54 per cent 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 PM’s letter said.
In Victoria, a household with typical consumption could save up to $830 a year by switching to the best market offer, according to St Vincent de Paul.
The Australian Energy Regulator has identified households could save up to $900, $1400 and $1500 respectively in Queensland, New South Wales and South Australia by going from the worst to best market offer.
The Prime Minister has invited the heads of Energy Australia, Origin Energy, AGL, Snowy Hydro, Momentum Energy, Alinta Energy, Simply Energy and the Australian Energy Council.
Energy Consumers Australia CEO Rosemary Sinclair welcomed news of the meeting and said it was critical retailers take proactive steps to help consumers manage their electricity bills at a time when many are facing double digit increases in prices.
”The Prime Minister’s intervention sends a strong message about the need for strong, practical and immediate action by retailers to cushion the impact of higher prices,” Ms Sinclair said.
”We are looking for retailers to take steps to ensure customers are on the best deal for them, and to help them manage their consumption and costs.”
Ms Sinclair said recent research carried out by Energy Consumers Australia showed while consumers see competition in the retail sector as a good thing, they are not convinced they are getting the benefits they should be getting.
”Consumers are telling us that they are not seeing good value for money for energy at the moment and they have little faith in the market, as is, providing better outcomes in the future,” Ms Sinclair said.