Retailers forced to come clean on the number of customers charged too much for their loyalty features in a comprehensive review of the electricity pricing system.
Tackling the “loyalty tax” was one of the goals of a self-initiated review by Australia’s electricity rule-maker aimed at bringing the electricity pricing framework into the modern era.
The Australian Energy Market Commission also has a blueprint to reform network tariffs to ensure households with solar and batteries are both properly rewarded and supporting the grid, and renters and other customers without such kit are not overpaying.
Disengaged electricity customers ending up on uncompetitive offers after their attractive introductory deals lapse has been a long-standing bugbear.
The AEMC wants to “shine a light” on the problem to nudge more consumers to switch, including forcing retailers to notify long-term customers of foregone savings.
Retailers should also be forced to publish tallies of how many customers are overpaying for their brand dedication.
Consumer advocacy groups such as Energy Consumers Australia had been pushing for tougher pricing regulations beyond more transparency in the hope of stopping the onus falling to time-pressed consumers to make the switch.
Network tariffs, which cover the costs of poles and wires and contribute roughly 40 per cent to bills, have also been in the AEMC’s sights and source of robust debate in the 2700 review submissions.
Network pricing has traditionally been linked to electricity consumption, which made sense when electricity was transported from large coal-powered stations to customers in a one-way system.
But today, millions of households are generating their own power on their rooftops, batteries are booming and electrification is well underway, allowing many to use less grid electricity and therefore pay much less for network costs.
While providing savings for solar-equipped households, it has left a shrinking pool of customers – including renters and other groups locked out of the tech – paying more for the network.
Energy bAEMC chair Anna Collyer said the millions of Australians who had invested in solar, batteries and electric vehicles were already reshaping the grid for the better and the proposed pricing system “catches up with what they have built, and rewards them properly for it”.
The proposed network tariff design would create more targeted opportunities for battery owners to be rewarded for the value they provide to the grid, she said.
“Reducing congestion, easing pressure at peak times, and helping keep costs down for everyone.”
The rule-maker also wants to shift household bill complexity onto retailer and energy service providers.
The goal. Electricity priced as simply as milk in the supermarket.
“You do not get separate bills for the cow, the carton and the transport,” Ms Collyer said.
“You get one simple shelf price.”
The AEMC cannot act on its recommendations unless a rule change request is made by a third party to trigger the process of a legal amendment.
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