Energy retail price offers comparison report 2019-20 & supplementary electricity retail price offers comparison report 2019 - Archived

30 Aug 2020

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The Energy Retail Price Offers Comparison Report 2019-20 reports on electricity and gas retail offer prices that were generally available to residential and small business customers during the period 30 June 2019 to 30 June 2020.

The Supplementary Electricity Retail Price Offers Comparison Report 2019 was developed in response to an information request from the South Australian Minister for Energy and Mining to examine the prices for the sale of electricity in South Australia following the introduction of the Default Market Offer by the Australian Energy Regulator on 1 July 2019.

Under the Electricity Act 1996 and Gas Act 1997, the Essential Services Commission (Commission) provides to the South Australian Minister for Energy and Mining (Minister) an annual Energy Retail Price Offers Comparison Report.

The Energy Retail Price Offers Comparison Report 2019-20 discusses electricity and gas retail offer prices that were generally available to small customers (residential and small business) during the period 30 June 2019 to 30 June 2020.

The key observations of the Report are that:

  • Average residential annual electricity retail Standing Offer and Market Offer prices fell by 13 percent and four percent respectively over the 12 months to 30 June 2020. Average small business annual electricity retail Standing Offer and Market Offer prices fell by six percent and four percent respectively over the same period.
  • Average residential annual gas retail Standing Offer and Market Offer prices increased by six percent and three percent respectively over the 12 months to 30 June 2020. Average small business annual gas retail Standing Offer and Market Offer prices increased by four percent and seven percent respectively over the same period.
  • There was a wide range of discounts between retail Standing Offers and Market Offers. For residential customers, the discount between a retailer’s Standing Offer and average Market Offer ranged from no discount to 16 percent. For residential customers, the discount between a retailer’s Standing Offer and their average Market Offer ranged from seven percent to 
    27 percent.
  • There was potential for small customers to reduce their annual energy bills by moving from Standing Offers to Market Offers or, if already on a Market offer, by considering alternative Market Offers. Customers can use the Australian Energy Regulator’s (AER) Energy Made Easy website to compare all available offers.

In September 2019, the Commission received an information request from the Minister to produce a Supplementary Electricity Retail Price Offers Comparison Report pursuant to the Electricity (General) Regulations 2012. 

The information request requires the Commission to examine the prices for the sale of electricity in South Australia following the introduction of the Default Market Offer (DMO) by the AER on 1 July 2019, by considering the prices of electricity retail Standing Offers and Market.

The key observations of the Report are that:

  • The weighted average retail Standing Offer and Market Offer prices for both residential and small business customers were lower at 31 October 2019 when compared to 30 June 2019. 
  • Electricity retailers have generally responded to the introduction of the DMO by decreasing the range of electricity retail offer prices available. The majority of retailers set retail Standing Offer prices either at or just below the DMO price as at 31 October 2019. 
  • The majority of residential and small business electricity retail Market Offers were still priced below the DMO as at 31 October 2019. The price range and available discounts had decreased, when compared to retail Market Offers publicly available on 30 June 2019. This does not necessarily indicate that customers are worse off because the newer discounts were applied against lower retail Standing Offer prices, as evidenced by the lower weighted average retail Market Offer prices. 
  • For residential customers, the number of customers on retail Standing Offers was broadly unchanged. There was an increase in the number of customers on the lower-priced retail Market Offers and a corresponding decrease in the number of customers on the higher-priced retail Market Offers. 
  • For small business customers, there was an increase in the number of customers on the lower-priced retail Standing Offers and a decrease in the number of customers on the high-priced retail Standing Offers. In addition, the number of small business customers on retail Standing Offers has increased but the number of customers on retail Market Offers has decreased. 

Importantly, the Commission notes that it may be too early to draw any enduring conclusions about the impact of the DMO from the Report because the 31 October 2019 snapshot is only four months after the introduction of the DMO. Customers might therefore not have had the opportunity to engage in the market between 30 June 2019 and 31 October 2019, for example, due to exit fees. The impact of the DMO on the South Australian electricity retail market should become clearer over a longer period of time.