Electricity retailers have gouged customers for too long and the government may need to step in to better regulate the market if the industry doesn’t “lift its game”, according to a new report.
The Grattan Institute also found “price shock” exists in Sydney, Melbourne, Brisbane and Adelaide after power prices doubled over the past decade.
“If competition still fails to deliver the promised benefits, then government will have no choice but to return to price regulation,” Grattan Institute Energy Program Director Tony Wood said.
While power discounts exist, consumers find the way retailers advertise so confusing, and possibly misleading, that often they are being provided only limited savings on their bills.
“For many people, they become frustrated and although there are better deals out there,” Mr Wood said.
“The way retailers advertise their discounts is confusing and possibly misleading. An advertised “’0 per cent discount’ can end up being a discount on only a small part of the bill.”
The Grattan Institute found the profit margin for Victorian retailers, which was the first state to deregulate prices, sits at about 13 per cent – more than double that of what’s recommended by regulators – something which if rectified it said would save customers about $100 per household per year.
“We suggest that companies should provide their data to an independent agency to review those numbers to see if there is inappropriate behaviour going on…I am not sure there is, but it is worth doing,” Mr Wood said.
He wants the data reported to the likes of the Australian Energy Market Commission.
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