The energy retail sector in South Australia is contestable, meaning that all electricity and gas consumers are able to enter into retail market contracts with a licensed retailer of their choice. Consumers play an important role in encouraging the efficient operation of markets. Through their choices, consumers encourage businesses to compete and innovate.
To promote competitive and fair market conduct in the energy retail market, the Commission must ensure that its regulatory framework establishes and maintains a market environment in which consumers are not only aware of their ability to choose their electricity and/or gas retailers but also be confident to actively engage in the market process. An important factor for facilitating the ongoing competitiveness of the energy retail market is ensuring that consumers have access to relevant information necessary to allow them to actively participate in the market.
It is the purpose of this review to understand South Australian consumers’ information needs to ensure that the Commission is, through its regulatory regime, providing the best opportunities for consumers to access the benefits of the competitive electricity and gas retail markets.
The Commission engaged Colmar Brunton to undertake market research to elicit the requirements, expectations and preferences for information for both residential and small business consumers within South Australia. On the basis of the preferences for market information expressed by consumers through this market research, and weaknesses identified with the current price disclosure arrangements, the Commission is proposing a series of amendments to its consumer protection framework. The proposed amendments outlined in this Draft Decision have been informed by the views expressed by South Australian residential and small business consumers through this market research.
The nature of the Commission’s regulatory response should be seen as complementary to the Commission’s new approach to setting standing contract prices for AGL SA. As efficient market outcomes result from the interaction of suppliers and consumers, the Commission must ensure that its consumer protection framework allows consumers to confidently engage with the energy retail market in the future.
The Commission is releasing a copy of Colmar Brunton’s Final Report to allow stakeholders to consider the findings of the consumer survey alongside this Draft Decision paper.
Comments on this Draft Decision paper should be provided to the Commission by COB 5 October 2010. Following its consideration of these submissions, the Commission will prepare a Final Decision (and amended regulatory instruments) for release in November 2010.
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The Commission conducted a review of the energy price disclosure requirements placed on retailers licensed to operate in South Australia. It was the purpose of this review to understand South Australian consumers’ information needs to ensure that the regulatory regime is providing the best opportunities for consumers to access the benefits of the competitive electricity and gas retail markets.
The Commission now releases its Final Decision on the Review of Consumer Information Requirements for the Energy Retail Market in South Australia. In making its Final Decision, the Commission has varied the Energy Price Disclosure Code and Energy Marketing Code. The amended Energy Price Disclosure Code and Energy Marketing Code will take effect on and from 7 March 2011.
Based on the preferences identified through market research and areas for improvement identified with the current price disclosure arrangements, the Commission has made a series of amendments to its consumer protection framework. The purpose of these amendments is to increase the transparency, accessibility and comparability of market contract price information for consumers.
Retailers are currently required to publish price fact sheets on their websites containing an annual estimated price and the relevant fees and charges for each energy market contract it offers to residential customers in South Australia.
From March 2011, price fact sheets for residential customers will also need to include the following additional information: an
- annual estimated price for any GreenPower options relevant to that market contract; and
- the price and price structure for the relevant electricity and gas tariffs (including the supply charge and each tariff step).
The Commission is also introducing energy price disclosure requirements for market contracts offered to small business customers. Retailers will be required to produce price fact sheets for small business customers containing the price and price structure for the market contract being offered.
To remind customers that assistance in comparing competing energy products is available, the Commission will require retailers to include a reference to the Commission’s price comparison services on each price fact sheet it prepares.
Retailers (and retailer’s marketing and sales representatives) will also be required to provide price fact sheets to consumers when approaching customers in person or via telephone to allow customers to consider the offer being made to them in a less high-pressure environment.
The amendments will ensure that consumers have access to easily comparable market contract information, whether they seek it out for themselves on a retailer’s website or are approached by a retailer or a retailer’s representative on the telephone or in person. The availability of better price information will make comparisons between energy products more straightforward and less time consuming for customers.
For customers looking to compare energy prices, the Commission’s Estimator is available from the front page of its website. For those consumers who do not have access to the internet, the Commission also offers a telephone version of that service on 1800 226 100.
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