Time to put energy retailers and their offers under the microscope – Renew Economy

Extract from an article by Bruce Mountain

This year, the retail part of the electricity sector will be getting lots of official attention.

Professor Alan Finkel’s review is understood to be interested in retail. In Victoria, Professor John Thwaites and Mr Terry Mulder will review this part of the industry. Nationally, the AEMC will be producing their study of the competitiveness of the retail sector, under the supervision of new Senior Director.

It is appropriate to scrutinise this part of the electricity sector: many, perhaps most, small customers in Australia seem to be charged more for electricity to be sold to them, than they are for electricity to produced. This is weird and explains in part why electricity prices in Australia compare so poorly with those in other countries.

But it is difficult to work out what retailers are actually charging for their services, compared to the other parts of an electricity bill (network charges, wholesale charges and environmental charges). For example:

  • Network charges are visible through published tariffs (for larger customers, network charges are itemised on their bills).
  • Wholesale charges can be reasonably estimated based on spot and contract market data.
  • State and federal environmental charges can be reliably estimated.

But retailers’ charges are not itemised on customers bills. The retail charge has to be derived by backing out the network, wholesale and environmental parts of the customer’s total bill.  And customers do not pay the same price.

There are currently 31 retailers that together make more than 8,000 different offers to the circa 8.3 million connections in the deregulated small customer markets in New South Wales, Victoria, South Australia and South East Queensland. Many of these retailers change their offers quite often during the year.

Since April last year MarkIntell has been keeping track of all retail offers through software that automatically collects all the electricity price fact sheets of these retailers (from their websites) and then mines the fact sheets for the data they provide on prices, solar charges, exit fees and incentives.

So, now it is possible to see much more clearly what is going on in the retail market for different types of customers on different retail offers…(continues)

SOURCE: Bruce Mountain, “Time to put energy retailers and their offers under the microscope”, Renew Economy, 23 feb 2017

Link to full article

BroCAP is produced by the two librarians at the Brotherhood of St Laurence in Melbourne, Australia.

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