Need to know
- Financial year 2022–23 saw a 12% rise in complaints to retailers across the national energy market
- What rubbed customers the wrong way most often were unexpectedly high bills
- In the first three months of 2024, the number of customers entering hardship programs due to an energy debt increased by 33%
Many energy consumers were not happy customers over financial year 2022–23, if a 12% rise in complaints to retailers across the national energy market is anything to go by.
Complaints to energy ombudsman schemes across the country also went up, which means many initial customer complaints were not satisfactorily resolved and had to be escalated.
What rubbed customers the wrong way most often, according to the Australian Energy Regulator's (AER) latest state of the energy market report, were unexpectedly high bills. This was sometimes due to incorrect tariffs, fees and charges, but household energy costs just generally went up, and so did the average amount of debt borne by energy consumers.
Customers struggling to pay bills
It's getting pretty tough out there. In the first three months of 2024, the number of customers entering hardship programs due to an energy debt increased by 33% compared to the same period in 2023. Those entering such programs with a debt greater than $500 increased by 25%. There were also 3652 electricity disconnections.
According to the advocacy group Energy Consumers Australia (ECA), paying for power just keeps getting harder. The way energy retailers treat their customers isn't helping.
Earlier this year, for instance, we published an investigation that showed some retailers were luring customers in with cheap offers but then raising rates on those plans in a few months and rolling out a new cheapest plan, effectively a bait and switch tactic.
We need to see better consumer protections and tighter enforcement of retailer behaviour
Liz Stephens, Energy Consumers Australia
ECA general manager of public affairs and strategy Liz Stephens tells CHOICE that the organisation's latest consumer survey "showed that consumers rate energy companies as less good value for money than supermarkets. The research also showed that consumers trust energy companies less than supermarkets and banks. We need to see better consumer protections and tighter enforcement of retailer behaviour".
The ECA research, from June 2024, also showed that nearly 50% of households were more concerned about being able to pay their electricity bill than they were a year ago, and that 50% of rural households reported having a power outage over the previous six months, as compared to 27% for metropolitan areas.
With many hundreds of energy offers available across the market, picking the best plan is all but impossible.
It pays to shop around
The AER report reiterates the regulator's longstanding advice that passively accepting what's on offer from your energy retailer generally means you're paying more than you should. Being an astute energy customer is all about staying engaged and continually wresting the best deal from the market as well as understanding the difference between standing offers versus market offers.
A standing or default offer is what you blindly accept from your retailer when you don't pick a specific plan; a market offer is when you go to the trouble of finding the best deal available for your energy needs, from your current energy retailer or a competitor.
Of course, none of this is particularly easy, but the effort can really pay off.
Being an astute energy customer is all about staying engaged and continually wresting the best deal from the market
The idea is to employ your user data to your advantage. Your energy bill should come with certain information, such as your energy consumption over a period of time, tariffs, daily supply charges and other fees and discounts. You can plug this data, along with where you live and your type of household, into an independent comparator website run by the AER called Energy Made Easy or, if you live in Victoria, to a website run by the Victorian Essential Services Commission called Compare Energy. This will let you compare your current offer to other deals on the market.
The energy market is complicated and these aren't perfect tools, but they can certainly help reduce your energy costs. Finding the best offer on the market at any given time, however, may be impossible.
'Hundreds of offers'
As the AER report states, "retail energy offers can vary significantly, and hundreds of offers may be available to customers at any one time, particularly for electricity customers. Advertised offers frequently change, as do the terms and charges attached to an offer over time. Customers routinely report finding it difficult to compare and determine which offer is best for their situation".
It's an issue that's front and centre for ECA as well. Liz Stephens says the organisation hears from many energy customers who say that switching plans or retailers is "confusing, time-consuming or complicated", particularly for people under financial pressure.
Customers routinely report finding it difficult to compare and determine which offer is best for their situation
Australian Energy Regulator
The organisation also hears from customers who pay more than they should due to mistakes by the retailer.
"We hear a lot about high bills and incorrect fees and charges," Stephens says. "Energy consumers should never be afraid to call their retailer and query their bill if they think it is wrong. Consumers have a right to support and retailers have an obligation to help them."
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