Prime Minister Malcolm Turnbull will summon energy bosses to Canberra for a meeting to demand that they give consumers more information about how to reduce energy bills.
The scheduled meeting follows a report by the Australian Energy Market Australian Energy Market Commission as reported by Leading Edge earlier this month.
The AEMC found that the system was opaque and that consumers simply did not have enough information to reduce energy bills.
Give customers information on how to reduce energy bills – PM
In a letter outlining the reason for the meeting being scheduled, Mr Turnbull said the various hardship programs available to customers who struggle to pay their bills were not enough. “More needs to be done to help people reduce their energy bills,” he said, saying that a lack of transparency meant many homes and businesses were paying significantly more than they should for power because they were unaware of better energy deals.
With more information at hand, it is estimated that the average household could save as much as $1,500 a year on energy bills.
Skyrocketing energy costs now a leading concern in Australia and Mr Turnbull says he is not prepared to wait until June next year when the Australian Competition and Consumer Commission hands down its final report into competition across the electricity sector.
Families and businesses are feeling the pressure of energy bills
“Since families are feeling price pressures now, it is important to ensure no family pays a cent more for electricity that it needs to,” the letter says. “I am particularly concerned by reports that consumers are being pushed from discounted market rates to higher, standard-priced contracts or non-discounted plans without realising it.”
Mr Turnbull signals he will be demanding the power bosses improve transparency by offering their customers all available information, enabling them to switch retailer or plan.
Turning to to the AEMC report, Mr Turnbull said 47 per cent of households and 54 per cent of small businesses have not switched plan or retailer in the past five years. “This suggests that these households and businesses are paying significantly more than they need to,” he says. “One reason why households are not taking action to secure a better deal is a lack of appropriate information.” AEMC found that many consumers are missing out on savings of up to $507 a year on their power bills and up to $285 on gas because they are not shopping around for a cheaper deal.The intervention follows him calling gas bosses to Canberra in March and demanding they free up enough fuel for domestic consumption, including at times of peak demand, or be hit with export restrictions. The government has since put in place the mechanism to impose restrictions but is yet to trigger it.
Transparency needed to help people get a better deal on energy bills
The Prime Minister said greater transparency and disclosure was needed and “this situation must be addressed urgently and directly”. He cited a St Vincent de Paul study which estimated a Victorian home with typical consumption could save $830 a year by “switching from the worst standing offer to the best market offer”.
Similarly, the Australia Energy Regulator found homes in Queensland, NSW and South Australia could save up to $900, $1400 and $1500 respectively.”
The issue could turn to be politically divisive as former Prime Minister Tony Abbott said he will be fighting any moves to adopt a Clean Energy Target (CET), as recommended by Chief Scientist Alan Finkel, arguing energy policy should be based solely on price, not emissions reduction.
He also wants the Renewable Energy Target abolished, calling it all “green theology”, and says the government should be building coal-fired power stations.
But Treasurer Scott Morrison said a so-called clean coal power station would take seven years to build, cost $2 billion, and no-one in the industry wanted to build one anyway.
With Labor prepared to dump its policy for a more robust emissions intensity scheme and agree to a CET to give industry the investment certainty it craves, Mr Morrison said this week that both major parties needed to compromise.
“Australians want their political parties to meet in the middle and deliver certainty on energy policy, because only through certainty will there be downward pressure on energy prices,” he said. “This requires sacrifice, from both sides, putting aside ideological positions to strike a deal that delivers genuine results for Australians struggling to pay their power bill.”
The Labor Party has signalled its intentions to play ball.
Those summoned to Canberra to meet Mr Turnbull, Treasurer Scott Morrison and Energy Minister Josh Frydenberg are: Catherine Tanna (Energy Australia), Frank Calabria (Origin Energy), Andy Vesey (AGL), Paul Broad (Snowy Hydro), Paul Geason (Momentum Energy), Jeff Dimey (Alinta Energy). Carly Wishart (Simply Energy) and Matthew Warren (Australian Energy Council).
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