Brief comment to the Australia Energy Regulator (AER) Customer Price Information Issues Paper

Mr Simon Kidd
Assistant Director
Retail Markets Branch
Australian Energy Regulator

Dear Mr Kidd COTA welcomes the opportunity to provide a brief comment to the Australia Energy Regulator (AER) Customer Price Information Issues Paper dated September 2017.

COTA Australia is the national consumer peak body for older Australians. Its members are the eight State and Territory COTAs (Councils on the Ageing), which have around 30,000 individual members and more than 1,000 seniors’ organisation members, jointly representing over 500,000 older Australians. COTA Australia is represented by Robyn Robinson on the AER Consumer Consultative Group and the Energy Information Presentation and Customer Engagement Reference Group, as well as the National Energy Consumer Roundtable.

Energy issues are an important and growing concern for our constituency of older Australians. Affordability is a critical concern for older consumers, particularly for the large percentage who are on low, fixed incomes and heavily reliant on energy supply to maintain their health and wellbeing. COTA Australia welcomes any responsible strategies that make energy more affordable for older consumers, including improved customer price information. A lack of useful information about energy market contracts is a significant barrier discouraging older consumers from more actively engaging with the energy retail market.

Research shows that older consumers are less likely to exercise consumer choice and switch between energy suppliers. A 2015 COTA Energy Survey found that only 20.5% of respondents who had the option to switch electricity and/or gas retailers had switched energy retailer in previous 2 yearsi. Research by the Australia Energy Market Commission (AEMC) found that almost half (46%) of the people they studied who were categorised as ‘retired on a low income’, had no interest at all in switching energy contracts.

The COTA Energy Survey found that many respondents were discouraged from switching retailers as they held the view that all energy retailers provide a similar service and similar price. Pricing and rebates were considered the most important attributes in switching retailers, however respondents generally needed an incentive of a bonus to switch.iii Older consumers may also be deterred from actively engaging with the energy market due to a lack of trust in the energy retailers and in the outcomes of switching.