Crackdown On Dodgy Electricity Bill Discounts

Energy retailers will soon be prohibited from offering pseudo-discounts and a new investigation will determine whether Australian energy consumers are being gouged by networks in relation to corporate tax liabilities.

In November last year, we mentioned big electricity discounts may not add up – in some cases consumers can find deals with a small discount may provide better value than contracts offering a far greater one. It’s just something else that makes choosing an electricity retailer more confusing and frustrating for solar and non-solar owners alike.

Victoria’s Essential Services Commission stated it’s possible to find offers with a 10 per cent discount that provide cheaper energy than those with discounts exceeding 30 per cent, and no doubt it’s a similar situation in other states.

The Australian Energy Market Commission yesterday announced a new rule that kicks in from July 1 banning energy retailers from offering these inflated pseudo-discounts.

“Discounting can work to benefit consumers as long as the details are properly disclosed,” said AEMC Chairman, Mr John Pierce AO. “But dodgy discounts deliberately designed to confuse consumers are not acceptable.”

The new rule only relates to one particular aspect of discounting; where rates such as usage rates and daily charges in a contract are above the equivalent rates in a standing offer.

The AEMC acknowledges there are also other problem areas, including conditional discounts such as pay-on-time discounts. These issues will be addressed in the Australian Energy Regulator’s revision of the Retail Pricing Information Guidelines and also the ACCC’s retail electricity pricing inquiry. The ACCC’s final report is due to the Treasurer by 30 June 2018.

Aside from dodgy discounts, solar owners need to be particularly careful in their choice of electricity retailers – they may be attracted by a high feed-in tariff offered and forget to check the devil in the detail; such as the electricity buyback rate only applying for a limited time after signing up and significantly higher mains supply rates and charges than non-solar customers.

Owners of solar power systems and those about to go solar can compare electricity retailer offers here.

Investigation Into Potential Gouging Of Electricity/Gas Consumers

In related news, Federal Minister for Energy Josh Frydenberg announced yesterday an investigation into electricity networks and regulated gas pipelines concerning potential gouging of consumers.

Regulated networks receive an allowance to cover their corporate tax liabilities, which is passed onto consumers at a cost of around $600 million annually. However, an Australian Taxation Office analysis of tax data between 2013 and 2016 has revealed a discrepancy between the tax allowances set for network businesses and the amount those businesses actually pay.

“It is totally unacceptable for consumers to be charged for corporate tax liabilities that are not actually incurred,” said the Minister.

An initial report from the Australian Energy Regulator (AER) concerning the issue is expected in the next couple of months, with a final report submitted to the COAG Energy Council by December 2018.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. Regarding the corporate tax part of the above article, has anyone else viewed the news report published at
    http COLON SLASH SLASH www DOT abc DOT net DOT au SLASH news SLASH 2017 HYPHEN 12 HYPHEN 07 SLASH corporate HYPHEN tax HYPHEN data HYPHEN released HYPHEN by HYPHEN ato SLASH 9236878
    ?

    Energy companies that paid no business tax, with their annual revenues over the financial year involved, include
    ALINTA HOLDINGS 2,376,796,331
    INFIGEN ENERGY LIMITED 235,647,376
    MERIDIAN ENERGY AUSTRALIA PTY LIMITED 170,942,628
    ORIGIN ENERGY LIMITED 11,917,688,617
    (Yes, that’s right, folks – Origin Energy – only eleven thousand million dollars of revenure in a year – wouldn’t YOU like to have that mch income, tax-free, in a year? You could probably buy a state in Australia.)

    Ah, what it must be like to be a filthy rich fossil fuel burning company, having mates who are (or having ownership of) legislators, to be able to avoid paying taxes.

  2. Matthew says:

    I think you could have royal commission into all of this and have plenty of dodgy material to dig up. One of my “favorites” is companies like Red Energy who attract you with attractive “honeymoon rates” that are competitive in the market. But at the time of sale, they will deny they are honeymoon rates, and imply that the rates you are getting, and will continue to get are the same rates they advertise to new customers. However, within 6 months of you starting the contract, they will send a letter telling you rates have gone up, and give you the new rates. In my case, some of the rates had gone up 20%. I think they hope you will just assume this is just a normal price rise that everyone gets. But if you compare the rates that they have given you, to the currently advertised rates, you will see that you are being ripped off. When I raised this with them, they will hid behind the clause in the contract that says they can raise rates, even though the wording of that clause suggests they will only do it if they have some wholesale price rises to pass through. HOWEVER, if it is only the wholesale price rises, why can they still offer better rates only to new clients!!! They refused to put me back to the new customer rates.

    If the banks had tried this with home mortgages, their would have been a royal commission a lot sooner than now. But somehow, the electricity companies are getting away with it.

    What is even more galling, is the fact that the government https://www.energymadeeasy.gov.au/ web site has pricing information sheets that show no recognition of this issue. So in a lot of cases, you are mislead to one of the many companies that do this in the promise of cheaper electricity, only to be charged significantly more than the companies that do not do this.

    How is this allowed!!!

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