updated market monitoring report - qca

Updated Market Monitoring Report

SEQ retail electricity market monitoring: 2017–18

March 2019

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We wish to acknowledge the contribution of the following staff to this report:

Jennie Cooper, Karan Bhogale, Shannon Murphy, Thomas Gardiner & Thomas Höppli

© Queensland Competition Authority 2019

The Queensland Competition Authority supports and encourages the dissemination and exchange of information. However, copyright protects this document.

The Queensland Competition Authority has no objection to this material being reproduced, made available online or electronically but only if it is recognised as the owner of the copyright and this material remains unaltered.

Queensland Competition Authority Contents

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Contents

EXECUTIVE SUMMARY III

THE ROLE OF THE QCA – TASK AND CONTACTS V

1 INTRODUCTION 1

1.1 Retail electricity market monitoring in south east Queensland 1

1.2 This report 1

1.3 Retailers operating in SEQ 1

2 PRICE MONITORING 3

2.1 Background 3

2.2 Minister's Direction 4

2.3 QCA methodology 4

2.4 QCA monitoring 6

2.5 Distribution non-network charges 45

2.6 Conclusion 47

3 DISCOUNTS, SAVINGS AND BENEFITS 48

3.1 Background 48




3.5 Conclusion 96

4 RETAIL FEES 98

4.1 Background 98




4.5 GST on fees 104

4.6 Fees that 'may' have applied 105

4.7 Additional fee information on Energy Made Easy 105

4.8 Conclusion 105

5 PRICE TRENDS 107


5.2 Data availability 107



5.5 Conclusion 118

6 SWITCHING TO MARKET OFFERS 119

6.1 Background 119


Queensland Competition Authority Contents

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6.5 Conclusion 129

7 HARDSHIP, REBATE AND HEEAS CUSTOMERS 130

7.1 Background 130




7.5 Conclusion 155

8 NEW RETAIL TARIFFS AND PLANS 156

8.1 Background 156




8.5 Conclusion 158

9 MARKET COMPETITIVENESS 159



9.3 QCA commentary 160

9.4 Conclusion 167

10 SIGNIFICANT ISSUES 169


10.2 Background 169



10.5 Conclusion 170

GLOSSARY 171

APPENDIX A : MINISTER'S LETTER AND DIRECTION NOTICE 173

APPENDIX B : KEY ASSUMPTIONS IN PRICE MONITORING 176

Offers included in analysis 176

Number of days in a year 176

Annual bills—standing offers 176

Annual bills—market offers 176

GST 177

Residential offers available to small business customers 177

Calculating annual bills using our published dataset 177

APPENDIX C : SWITCHING CUSTOMERS (LOCATION) FULL POSTCODE DATA 178

REFERENCES 190

Queensland Competition Authority Executive Summary

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EXECUTIVE SUMMARY

Introduction

The Queensland Government deregulated retail electricity prices for residential and small business

customers in south east Queensland (SEQ), effective from 1 July 2016. The government also introduced a

'market monitoring' function in the Electricity Act 1994 (Qld) to ensure customers have the opportunity to

benefit from price deregulation in SEQ.

We expect that this market monitoring report, covering the period 1 July 2017 to 30 June 2018, will promote

customers' awareness of prices in the SEQ retail electricity market and inform their engagement with the

SEQ retail electricity market.

Price monitoring

A customer's electricity bill depends on the customer's choice of retailer offer. Our analysis is based on

annual bills for a 'typical SEQ customer' with a median consumption level, and covers the most common

tariffs and tariff combinations for small customers for 2017–18.

Standing offer bills were generally more expensive than market offer bills in each quarter of 2017–18. From

the September quarter to the March/June quarter, the number of retailers with offers in the market

increased for each tariff and tariff combination, and so did the number of market offers. Most retailers also

published new market offers during 2017–18 that were cheaper—for a typical SEQ customer—than their

cheapest market offers in the June quarter of 2017.

Discounting

Many retailers attached discounts of some form to their market offers in 2017–18. In many cases discounts

related to customers' payment and billing arrangements, and they usually applied only to the usage charge,

not also supply charges. Retailers also offered customers a greater variety of incentives and benefits in

2017–18, compared to 2016–17, when incentives related mostly to signing up online. However, discounting

on market offers was again very complex in 2017–18, as in 2016–17.

Retail fees

Most retailers who published residential and/or small business market offers attached retail fees to at least

some of their offers in the June quarter of 2018. The types of retail fees attached to market offers were

credit and debit card payment fees, payment processing fees on payments made by direct debit or over the

counter at Australia Post, paper bill fees, dishonoured cheque and direct debit payment fees, late payment

fees and early termination fees. For most fee types, the range of the charges was narrow and charges were

similar as in 2016–17. As in 2016–17, retailers did not consistently identify on Energy Made Easy which

payment methods were accepted on their offers. This made it difficult to compare payment processing fees

across offers and retailers.

Price trends

For each of the most common tariffs and tariff combinations for small customers, standing offer bills have

increased more than market offer bills from 2015–16 to 2017–18. The difference between the average

lowest and the average highest market offer bills has also increased, in particular since 2016–17. The largest

bill increases usually took place in the September quarter. In the last three quarters of 2017–18, the average

lowest offer bills decreased for each of the three residential customer tariffs and tariff combinations.

Queensland Competition Authority Executive Summary

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Switching to market offers

The number of customers moving from standing offers to market offers with their retailer in 2017–18

increased significantly compared to 2016–17, with the largest proportion of switching customers in the

west of the SEQ region. Residential and small business customers with lower levels of consumption

switched in higher proportions compared to 2016–17. Nearly half of the number of residential customers

who switched participated in a hardship program, received the Queensland Government electricity rebate,

or received Home Energy Emergency Assistance Scheme (HEEAS) support (or a combination of all three).

Hardship, rebate and HEEAS customers

Seventy-five per cent of hardship, rebate and HEEAS customers were on market contracts in 2017–18. These

customers generally paid bills based on prices that were similar to the average of those prices available on

Energy Made Easy. The high proportion of customers on hardship programs on market contracts may reflect

the additional efforts made by retailers to assist hardship customers, such as helping them identify the best

prices for their circumstances.

In April 2018, the Australian Energy Regulator (AER) issued new reporting procedures for retailers. In

addition to (continuing to) report on the number of customers in their hardship programs, retailers are now

required to report on the type of contract (standing or market) each hardship customer is on. The AER

expects that this will show whether retailers are working with customers to find more attractive prices and

terms and conditions that suit their circumstances (particularly in relation to affordability concerns).

New retail tariffs and plans

A small number of new retail tariff plans emerged in 2017–18. Some retailers attached new incentives and

benefits to their offers in 2017–18; we consider these to also be new types of retail plans.

Market competitiveness

Increased rivalry between retailers to offer better deals to customers in 2017–18 followed Alinta Energy's

entry in to the SEQ market in August 2017. Competition is still mostly based on discounts, while retailers

did not generally offer products tailored to customers' needs. Competition may be hindered though if price-

sensitive customers are not on the best possible plan because they find it difficult to navigate the market

and compare offers.

Significant issues

The implementation of Power of Choice reforms to metering arrangements was a significant issue that

emerged in the SEQ market in 2017–18. We anticipate that retailers' reporting to the Australian Energy

Regulator on new measures regarding smart metering will provide useful information for stakeholders to

analyse the implementation of Power of Choice.

Queensland Competition Authority The Role of the QCA – Task and Contacts

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THE ROLE OF THE QCA – TASK AND CONTACTS

The Queensland Competition Authority (QCA) is an independent statutory body which promotes

competition as the basis for enhancing efficiency and growth in the Queensland economy.

The QCA's role with respect to monitoring the south east Queensland retail electricity market (the market)

is set out in part 2, chapter 4 of the Electricity Act 1994 (Qld) (the Electricity Act). In accordance with section

89B of the Electricity Act, the QCA has been directed by the Minister for Natural Resources, Mines and

Energy to report on the operation of the market for the period 1 July 2017 to 30 June 2018.

Contacts

Enquiries regarding this project should be directed to:

Attention: Mr Shannon Murphy Contact: www.qca.org.au/Contact-us

http://www.qca.org.au/

Queensland Competition Authority Introduction

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1 INTRODUCTION

1.1 Retail electricity market monitoring in south east Queensland

The Queensland Government removed regulation of retail electricity prices for residential and

small business customers in SEQ, effective from 1 July 2016.1 The government also introduced a

'market monitoring' function in the Electricity Act 1994 (Qld) (the Electricity Act) to ensure

customers have the opportunity to benefit from price deregulation in SEQ.2

In September 2018, the Minister for Natural Resources, Mines and Energy (the Minister) directed

the Queensland Competition Authority (QCA) to monitor the operation of the SEQ retail

electricity market for residential and small business customers for the year from 1 July 2017 to

30 June 2018.3

1.2 This report

This market monitoring report provides information on:

generally available standing and market offer bills (Chapter 2)

discounts, savings and benefits generally available to customers (Chapter 3)

retail fees and charges (Chapter 4)

quarterly trends in prices over the period 1 July 2015 to 30 June 2017 (Chapter 5)

customers switching from standing to market offers with the same retailer (Chapter 6)

prices paid by hardship and rebate customers, and customers receiving support through the

Home Energy Emergency Assistance Scheme (HEEAS) (Chapter 7)

new types of retail tariff structures and retail electricity plans (Chapter 8)

the competitiveness of the SEQ retail electricity market (Chapter 9)

any significant issues that emerged in the market in 2017–18 (Chapter 10).

We expect that the market monitoring report will promote customers' awareness of prices in the

SEQ retail electricity market and inform their engagement with the SEQ retail electricity market.

1.3 Retailers operating in SEQ

Using the Australian Energy Regulator's (AER) Energy Made Easy website, we identified the

retailers shown in the table below as providing (generally available) electricity offers to SEQ

residential and small business customers in 2017–18.

1 ECPLA Act, part 3; ECPLA Act Proclamation; ECPLA (Postponement) Regulation; Electricity Act, section 89B. 2 Electricity Act, section 89B; ECPLA Bill explanatory notes, page 2. The Electricity Act, the ECPLA Act,

proclamation and postponement regulation, and the ECPLA Bill and explanatory notes can be accessed on the websites of the Office of the Queensland Parliamentary Counsel (OQPC) and the legal database Lawlex.

3 The Minister issued a direction notice to the QCA in April 2018 to monitor the market, but this notice was replaced with a new notice in September 2018. See the Minister's letter in Appendix A.

https://www.legislation.qld.gov.au/OQPChome.htm

https://lawlex.com.au/

Queensland Competition Authority Introduction

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Table 1 Retailers with residential and small business offers in SEQ, 2017–18

Retailer Residential Small business

1st Energy Pty Ltd

AGL Sales Pty Ltd

Alinta Energy Retail Sales Pty Ltd

Amaysim Energy Pty Ltd

Click Energy Pty Ltd(a)

Diamond Energy Pty Ltd

Dodo Power & Gas(b) —

EnergyAustralia Pty Ltd

Energy Locals Pty Ltd

ERM Power Limited —

Lumo Energy Pty Ltd

Mojo Power Pty Ltd —

Momentum Energy Pty Ltd

Next Business Energy Pty Ltd

Origin Energy Pty Ltd

People Energy Pty Ltd —

Powerdirect Pty Ltd

Powershop Pty Ltd

QEnergy Limited

Red Energy Pty Ltd

Sanctuary Energy Pty Ltd —

Simply Energy Pty Ltd(c)

(a) Before September 2017, Amaysim Energy Pty Ltd was known as Click Energy Pty Ltd; Amaysim Energy Pty Ltd has two trading names: Click Energy and Amaysim. (b) The applicant for Dodo Power & Gas's retail authorisation is M2 Energy Pty Ltd. (c) The applicant for Simply Energy's retail authorisation is IPower Pty Ltd.

Notes: A tick () indicates the retailer published at least one offer on Energy Made Easy for 2017–18 and a dash (—) indicates the retailer did not publish any offers on Energy Made Easy for 2017–18 for the applicable small customer type. Not all retailers had offers published in each quarter of 2017–18.

For more information on retail authorisations, see the AER's public register of authorised retailers on the retail markets section of the AER's website, https://www.aer.gov.au/.

Source: Energy Made Easy.

https://www.aer.gov.au/

Queensland Competition Authority Price monitoring

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2 PRICE MONITORING

A customer's electricity bill depends on the customer's choice of retailer offer. Our analysis is

based on annual bills for a ‘typical SEQ customer' with a median consumption level, and covers

the most common tariffs and tariff combinations for small customers. Standing offer bills were

generally more expensive than market offer bills in each quarter of 2017–18. From the

September quarter to the March/June quarter, the number of retailers with offers in the market

increased for each tariff and tariff combination, and so did the number of market offers. Most

retailers also published new market offers during 2017–18 that were cheaper—for a typical SEQ

customer—than their cheapest market offers in the June quarter of 2017.

2.1 Background

2.1.1 Standing and market offers

Electricity retailers operating in SEQ are required to provide customer retail services to small

customers either under a standard retail contract or market retail contract.4 Small customers are

residential customers or business customers who consume less than 100 megawatt hours of

electricity per annum.5

Standing offers are basic offers with terms and conditions that are specified by the National

Energy Retail Rules (NERR).6 Market offers contain a minimum set of terms and conditions

(specified in the NERR7) and can include other terms and conditions agreed between the retailer

and customer. Compared to market offers, standing offers provide preferential terms and

conditions to customers.8 In our view, standing and market offers should therefore not be

compared solely in terms of price differences.

The AER has developed a price comparator, which is available on its Energy Made Easy website,

to assist small customers to compare published standing and market offers.9

2.1.2 Fees and charges

The bill that a customer receives under an electricity offer consists of (fixed) supply and (variable)

usage charges, as well as other fees and charges.

The supply charge is charged daily to cover the costs of maintaining electricity supply to a

premises, including the costs associated with the provision of network infrastructure (i.e.

poles and wires) and general administration. Retailers may also include metering charges

levied by Energex or a meter service provider under this component.

The usage charge varies according to a customer's consumption (measured in kilowatt hours

(kWh)). It may include a time of use charge which differs depending on when customers use

electricity—a 'peak' (higher cost) period and an 'off-peak' (lower cost) period charge may

apply.

4 National Energy Retail Law, section 20. 5 National Energy Retail Law, section 5; National Energy Retail Regulations, section 7. 6 National Energy Retail Rules, rule 12 and schedule 1. 7 National Energy Retail Rules, rule 14. 8 QCA 2018a, section 6.1.3. 9 National Energy Retail Law, section 62; Energy Made Easy website.

https://www.energymadeeasy.gov.au/


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Electricity offers can also include a number of additional fees and charges. These may be

distribution charges passed on from Energex to customers, or retailers' own fees and charges.

2.1.3 Types of tariffs

Since prices were deregulated in SEQ retailers have generally continued to offer similar types of

tariffs as before deregulation, but named their tariffs differently; for example, flat rate, peak, off-

peak, controlled load 1, controlled load 2, and time of use (TOU) tariffs. Many offers also adopt

tariff names, such as tariff 11, tariff 20 and tariff 22, which reflect names of tariffs in regional

Queensland, where the QCA determines notified prices on an annual basis.10

2.2 Minister's Direction

Sections 2(a) and (b) of the Direction require the market monitoring report to include a

comparison and assessment of:

(a) retailers' standing offer bills and generally available market offer bills—published on

Energy Made Easy—which were available to customers in 2017–18, on a quarterly basis.

Where relevant, the QCA should also provide a comparison of the lowest, highest and

average prices for each retailer

(b) variations to those generally available market offer bills in 2017–18.

2.3 QCA methodology

2.3.1 Most common tariffs and combinations

We obtained information on each SEQ retailer's standing and generally available market offers—

including supply and usage charges—from Energy Made Easy.11 We are presenting prices as an

annual bill for a median consumption level customer—the 'typical SEQ customer'—to provide the

most meaningful comparison between individual price components. Differences between bills

are described on an annual basis. Information on customer numbers and consumption was

sourced from Energex.

We found that the most common tariffs and tariff combinations for 2017–18 were:

for residential customers

a flat rate tariff

a combination of a flat rate tariff and either a controlled load super economy tariff or a

controlled load economy tariff

for small business customers

a flat rate tariff

a time of use tariff.

10 The AER, in its notice of final instrument for its review of the retail pricing information guidelines (published

April 2018): (a) encouraged retailers to make changes to the language used on their bills to ensure language is consistent across all customer communications; and (b) committed to undertaking a comprehensive review of language the energy sector in future. See AER 2018a, section 3.5.

11 See Appendix B (offers included in analysis) for more detail.


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These are the same tariffs and tariff combinations we reported on in our market monitoring

report for 2016–17.

The table below shows the median consumption levels for the most common tariffs and tariff

combinations.

Table 2 Most common tariffs and tariff combinations for small customers

Customer type Tariff Median consumption (kWh)

Residential Flat rate (tariff 11) 4,059

Residential Flat rate (tariff 11) + controlled load super economy (tariff 31)(a) 6,032

Residential Flat rate (tariff 11) + controlled load economy (tariff 33)(b) 5,478

Small business Flat rate (tariff 20) 6,334

Small business Time of use (tariff 22) 21,624

Notes: (a) Controlled load super economy is available for a minimum of eight hours per day, but the times when supply is available is subject to variation at Energex's absolute discretion (Energex 2017a, Appendix 2). (b) Controlled load economy is available for a minimum of 18 hours per day, but the times when supply is available is subject to variation at Energex's absolute discretion (Energex 2017a, Appendix 2).

Source (of median consumption data): Energex, unpublished data for 2016–17.

The median consumption of customers on the residential flat rate with controlled load super

economy tariff combination is higher than median consumption of those on residential flat rate

with controlled load economy combination. Therefore, although usage charges on economy

controlled load are higher than on super economy controlled load, the bills we report for the

super economy combination are actually higher than they are for the economy combination.

2.3.2 Retailers' lowest, highest and average market offer prices

We first identified which retailers had the cheapest (lowest) and most expensive (highest)

standing and market offers in each quarter. We then calculated how much customers could have

saved by switching to the lowest market offer.

For stakeholders seeking more detail, and/or wishing to calculate bills based on different

consumption levels, datasets of the offers we use in our analysis are available on our website.

In the tables and graphs in this report, all annual bills include Goods and Services Tax (GST); some

figures do not add due to rounding; and retailers are listed in alphabetical order. More

information on the key assumptions we used in calculating annual bills is in Appendix B.

Some higher priced market offers may have been for solar customers only. As retailers did not

apply a common approach to identifying solar-only offers in offers published on Energy Made

Easy, we did not remove any market offers from our analysis. A separate solar feed-in tariff

monitoring report has been published by the QCA (October 2018) on the solar feed-in tariffs

offered by retailers in 2017–18. The datasets of offers on our website also allow solar customers

to calculate and compare bills taking into account solar feed-in tariffs.12

12 In our submissions to the AER's review of its retail pricing information guidelines, and our solar feed-in tariff

report for 2017–18, we recommended Energy Made Easy include specific solar options to help solar customers to compare deals so they can choose the best one for them. See QCA 2017a, section 2.1; QCA 2018b, section 2.1; and QCA 2018c, section 3.4.


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2.3.3 Metering charges

Retailers may include metering charges in their offers. For example, AGL noted on its offers

published on Energy Made Easy that the supply charge included metering charges.13 ERM Power

also listed some metering charges on its small business offers.14

As in our market monitoring report for 2016–1715, we consider that all retailers should clearly

identify their metering charges, or state that they do not levy metering charges if that is the case,

in their offers on Energy Made Easy. This would improve the clarity of information for customers

and assist comparability between offers.

2.3.4 Distribution non-network charges

Retailers' offers published on Energy Made Easy for 2017–18 generally included some distribution

non-network charges. The AER's retail pricing information guidelines (which applied in 2017–18)

list reconnection and disconnection fees as 'key fees' which must be specified on Energy Made

Easy.16 While distribution non-network charges are payable by customers, we have no data on

the 'typical' SEQ customer's liability for these fees in 2017–18, and they are only charged when

specific services are provided. As a result, they are usually not charged on a quarterly basis, unlike

supply and usage charges.

2.4 QCA monitoring

2.4.1 Residential flat rate offers

September quarter

In the September quarter, 18 retailers had offers for the residential flat rate tariff on Energy Made

Easy. Of these retailers, 17 had a standing offer and 14 had at least one market offer on Energy

Made Easy.

Table 3 Bills for a typical residential flat rate customer, September quarter 2017

Retailer Standing offer ($)

Average market offer ($)

Lowest market offer ($)

Highest market offer ($)

1st Energy 1,702 1,561 1,470 1,652

AGL 1,563 1,422 1,340 1,485

Alinta Energy 1,559 1,281 1,268 1,294

Click Energy 1,703 1,665 1,446 1,837

Diamond Energy 1,580 — — —

Dodo Power & Gas 1,720 1,463 1,463 1,463

13 Energy Made Easy, AGL offers (2017–18). In our solar feed-in tariff report for 2017–18, we commented that

AGL did not vary its supply charges on Energy Made Easy across its solar and non-solar offers; that is, it did not increase the supply charges on solar offers to include the solar metering charge: QCA 2018c, section 3.4. We interpret AGL's statement on its offers that metering charges are included in the supply charge to mean that the primary metering charge is included in the supply charge. For more information on primary, load control and solar metering charges that applied in SEQ in 2017–18, see Energex 2017b, section 3.5 (and the historic pricing publications page of Energex's website).

14 Energy Made Easy, ERM Power offers (2017–18). 15 QCA 2017b, section 2.3.3. 16 AER 2015, section 3.5.

https://www.energex.com.au/home/our-services/pricing-And-tariffs/residential-customers/historic-pricing-publications


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EnergyAustralia 1,655 1,542 1,442 1,655

Energy Locals — 1,425 1,425 1,425

Lumo Energy 1,520 — — —

Mojo Power 1,837 1,598 1,515 1,681

Origin Energy 1,553 1,475 1,422 1,553

People Energy 1,461 — — —

Powerdirect 1,563 1,400 1,400 1,400

Powershop 1,628 1,441 1,383 1,465

QEnergy 1,848 1,521 1,306 1,718

Red Energy 1,520 1,359 1,359 1,359

Sanctuary Energy 1,607 — — —

Simply Energy 1,461 1,394 1,305 1,463

Simple average 1,616 1,468 1,396 1,532

Note: A dash (—) means the retailer did not have a residential flat rate standing or market offer on Energy Made Easy in the September quarter.

Sources: Energy Made Easy; QCA analysis.

Figure 1 Bills for a typical residential flat rate customer, September quarter 2017

Note: Energy Locals did not have a residential flat rate standing offer, and Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a residential flat rate market offer, on Energy Made Easy in the September quarter.


$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

Low market offer High market offer Standing offer


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The September quarter table and graph show that for a typical residential flat rate tariff customer:

standing offer bills ranged from $1,461 (People Energy – Standing Retail Contract and Simply

Energy – Residential Standing Offer EO) to $1,848 (QEnergy – Home Your Way Single Rate)

market offer bills ranged from $1,268 (Alinta Energy – Home Saver Plus (Residential Single

Rate)) to $1,837 (Click Energy – Connect Tariff 11 Only).

December quarter

In the December quarter, 19 retailers had offers for the residential flat rate tariff on Energy Made

Easy. All 19 retailers had standing offers and 14 had at least one market offer on Energy Made

Easy.

Table 4 Bills for a typical residential flat rate customer, December quarter 2017





1st Energy 1,702 — — —

AGL 1,563 1,450 1,398 1,485

Alinta Energy 1,559 1,281 1,268 1,294

Amaysim Energy 1,703 1,464 1,362 1,584

Click Energy 1,703 1,661 1,446 1,837


Dodo Power & Gas 1,720 1,463 1,463 1,463


Energy Locals 1,554 1,425 1,425 1,425


Mojo Power 1,837 1,598 1,515 1,681

Origin Energy 1,553 1,434 1,328 1,553


Powerdirect 1,563 1,400 1,400 1,400

Powershop 1,628 1,394 1,334 1,628

QEnergy 1,848 1,478 1,306 1,573

Red Energy 1,520 1,359 1,359 1,359


Simply Energy 1,588 1,399 1,310 1,463

Simple average 1,621 1,449 1,381 1,522

Note: A dash (—) means the retailer did not have a residential flat rate market offer on Energy Made Easy in the December quarter.



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Figure 2 Bills for a typical residential flat rate customer, December quarter 2017

Note: 1st Energy, Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a residential flat rate market offer on Energy Made Easy in the December quarter.


The December quarter table and graph show that for a typical residential flat rate tariff customer:

standing offer bills ranged from $1,461 (People Energy – Standing Retail Contract) to $1,848

(QEnergy – Home Your Way Single Rate)

market offer bills ranged from $1,268 (Alinta Energy – Home Saver Plus Residential Single

Rate) to $1,837 (Click Energy – Connect Tariff 11 Only).

March quarter

In the March quarter, 21 retailers had residential flat rate tariff offers on Energy Made Easy. Of

these retailers, 16 had at least one market offer on Energy Made Easy.

Table 5 Bills for a typical residential flat rate customer, March quarter 2018





1st Energy 1,702 1,405 1,374 1,440

AGL 1,563 1,356 1,188 1,466

Alinta Energy 1,559 1,264 1,234 1,294

Amaysim Energy 1,703 1,516 1,447 1,584

Click Energy 1,703 1,679 1,446 2,009


Dodo Power & Gas 1,720 1,404 1,345 1,463


Energy Locals 1,554 1,425 1,425 1,425

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900



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Mojo Power 1,837 1,657 1,597 1,717

Momentum Energy 1,506 — — —

Next Business Energy 1,655 1,457 1,457 1,457

Origin Energy 1,553 1,407 1,328 1,553


Powerdirect 1,563 1,400 1,400 1,400

Powershop 1,628 1,448 1,334 1,628

QEnergy 1,848 1,428 1,261 1,573

Red Energy 1,520 1,325 1,291 1,359


Simply Energy 1,588 1,386 1,310 1,463

Simple average 1,617 1,438 1,360 1,524

Note: A dash (—) means the retailer did not have a residential flat rate market offer on Energy Made Easy in the March quarter.


Figure 3 Bills for a typical residential flat rate customer, March quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a residential flat rate market offer on Energy Made Easy in the March quarter.


$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100



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The March quarter table and graph show that for a typical residential flat rate tariff customer:



market offer bills ranged from $1,188 (AGL – Set and Forget) to $2,009 (Click Energy –

Natural Tariff 11 Only).

June quarter

In the June quarter, 21 retailers had residential flat rate tariff offers on Energy Made Easy. Of

these retailers, 16 had at least one market offer on Energy Made Easy.

Table 6 Bills for a typical residential flat rate customer, June quarter 2018





1st Energy 1,702 1,403 1,374 1,434

AGL 1,563 1,344 1,188 1,513

Alinta Energy 1,559 1,247 1,234 1,259

Amaysim Energy 1,703 1,464 1,362 1,584

Click Energy 1,703 1,655 1,447 2,009


Dodo Power & Gas 1,720 1,345 1,345 1,345


Energy Locals 1,554 1,425 1,425 1,425


Mojo Power 1,837 1,657 1,597 1,717



Origin Energy 1,553 1,436 1,328 1,553


Powerdirect 1,563 1,400 1,400 1,400

Powershop 1,628 1,448 1,334 1,628

QEnergy 2,033 1,330 1,238 1,573

Red Energy 1,520 1,344 1,291 1,434


Simply Energy 1,588 1,369 1,270 1,463

Simple average 1,626 1,420 1,348 1,522

Note: A dash (—) means the retailer did not have a residential flat rate market offer on Energy Made Easy in the June quarter.



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Figure 4 Bills for a typical residential flat rate customer, June quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a residential flat rate market offer on Energy Made Easy in the June quarter.


The June quarter table and graph show that for a typical residential flat rate tariff customer:




Natural Tariff 11 Only).

QCA assessment

Retailers with offers on Energy Made Easy

In the September quarter, 18 retailers had residential flat rate offers on Energy Made Easy; of

these, 14 had at least one market offer. By the March quarter, 21 retailers had residential flat

rate offers; of these, 16 had at least one market offer.

Five retailers—Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary

Energy—published residential flat rate standing offers on Energy Made Easy but did not publish

a corresponding market offer during the year.

We note that People Energy's standing offer, which was the cheapest standing offer in each

quarter, was published in November 2016 and remained available throughout 2017–18.

Comparison of standing and market offer bills

Standing offer bills were generally higher than market offer bills in all the quarters. To lower their

electricity bills, customers need to regularly compare offers on Energy Made Easy, especially at

the beginning of the financial year.

For those customers on standing offers who were switching to a generally available market offer,

the cheapest offers would have been:

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100



13

Alinta Energy's Home Saver Plus Residential Single Rate market offer ($1,268) in the

September quarter

AGL's Set and Forget market offer ($1,188) in the March quarter.

Customers do need to be aware, when considering switching, that standing offers have set terms

and conditions, whereas market offers have flexible terms and conditions.

Market offer bills in 2017–18 compared to June quarter 2017

In the June quarter of 2017, Simply Energy's Plus 15 Online offer ($1,305) was the lowest market

offer available in SEQ.17 We note that the lowest market offers in 2017–18 were cheaper than the

Simply Energy offer in the June quarter of 2017.

Market offer price variations

Customers on market offers also had the opportunity to save on electricity bills by switching to

the lowest market offer available. For example, the (annualised) difference between the highest

and lowest market offers in the June quarter of 2018 was $822.

Sixteen retailers had at least one residential market offer available in 2017–18. The table below

shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in 2017–

18.

Table 7 Quarterly changes in lowest market offer bill for a typical residential flat rate customer, 2017–18

Retailer December quarter (%) March quarter (%) June quarter (%)

1st Energy –100.0(a) –6.5(b) 0.0

AGL 4.3 –15.1 0.0

Alinta Energy 0 –2.7 0.0

Amaysim Energy n/a 6.2 –5.9

Click Energy 0 0 0.1

Dodo Power & Gas 0 –8.0 0.0

EnergyAustralia –1.6 –6.7 –3.8

Energy Locals 0 0 0.0

Mojo Power 0 5.4 0.0

Next Business Energy — — 0.0

Origin Energy –6.6 0 0.0

Powerdirect 0 0 0.0

Powershop –3.5 0 0.0

QEnergy 0 –3.4 –1.9

Red Energy 0 –5.0 0.0

Simply Energy 0.2 0 –3.1

17 QCA 2017b, section 2.4.1 (QCA assessment) shows the Simply Energy bill value as $1,290. For this report, we

have recalculated the Simply Energy bill using the consumption level used for the 2017–18 report.


14

(a) 1st Energy had two residential flat rate market offers in the September quarter, but none in the December quarter. (b) 1st Energy's bill change in the March quarter refers to its lowest market offer in the September quarter.

Note: A dash (—) means the retailer did not have a residential flat rate market offer published on Energy Made Easy in the preceding quarter.


The table shows that most retailers published new offers during 2017–18 which were cheaper—

for a typical customer—than their previously cheapest offers. Retailers generally increased

conditional discounts and/or used sign-up incentives to reduce the price of their lowest offer.

2.4.2 Residential flat rate with controlled load super economy offers

September quarter

In the September quarter, 18 retailers had offers that combined a residential flat rate tariff with

a controlled load offer super economy tariff on Energy Made Easy. For this tariff combination, 17

of the retailers had a standing offer and 14 had at least one market offer on Energy Made Easy.

Table 8 Bills for a typical residential flat rate with controlled load super economy customer, September quarter 2017





1st Energy 2,213 2,021 1,894 2,148

AGL 1,958 1,779 1,651 1,860

Alinta Energy 1,953 1,580 1,567 1,593

Click Energy 2,228 2,154 1,892 2,403


Dodo Power & Gas 2,149 1,811 1,811 1,811


Energy Locals — 1,890 1,859 1,906


Mojo Power 2,193 1,953 1,870 2,036

Origin Energy 1,921 1,817 1,747 1,921


Powerdirect 1,958 1,742 1,742 1,742

Powershop 2,142 1,898 1,821 1,928

QEnergy 2,413 1,909 1,615 2,222

Red Energy 1,896 1,696 1,696 1,696


Simply Energy 1,758 1,795 1,657 1,895

Simple average 2,021 1,852 1,755 1,943

Note: A dash (—) means the retailer did not have a standing or market offer for this tariff combination on Energy Made Easy in the September quarter.



15

Figure 5 Bills for a typical residential flat rate with controlled load super economy customer, September quarter 2017

Note: Energy Locals did not have a standing offer and Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy in the September quarter.


The September quarter table and graph show that for a typical customer on this tariff

combination:


(QEnergy – Home Your Way (Single Rate + Controlled Load))


Rate with Controlled Load 1)) to $2,403 (Click Energy – Connect Tariff 11 and Tariff 31 (Night

Rate) and Tariff 33 (Controlled Supply)).

December quarter

In the December quarter, 19 retailers had offers that combined a residential flat rate tariff with a

controlled load super economy tariff on Energy Made Easy. All 19 retailers had standing offers,

while 14 retailers had market offers as well, on Energy Made Easy.

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



16

Table 9 Bills for a typical residential flat rate with controlled load super economy customer, December quarter 2017





1st Energy 2,213 — — —

AGL 1,958 1,816 1,748 1,860

Alinta Energy 1,953 1,580 1,567 1,593

Amaysim Energy 2,228 1,838 1,782 1,893

Click Energy 2,228 2,154 1,892 2,403


Dodo Power & Gas 2,149 1,811 1,811 1,811


Energy Locals 2,000 1,859 1,859 1,859


Mojo Power 2,193 1,953 1,870 2,036

Origin Energy 1,921 1,767 1,639 1,921


Powerdirect 1,958 1,742 1,742 1,742

Powershop 2,142 1,835 1,757 2,142

QEnergy 2,413 1,835 1,615 1,945

Red Energy 1,896 1,696 1,696 1,696


Simply Energy 2,067 1,812 1,696 1,895

Simple average 2,043 1,822 1,743 1,908

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the December quarter.



17

Figure 6 Bills for a typical residential flat rate with controlled load super economy customer, December quarter 2017

Note: 1st Energy, Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy in the December quarter.


The December table and graph show that for a typical customer on this tariff combination:






March quarter

In the March quarter, 20 retailers had offers that combined a residential flat rate tariff with a

controlled load super economy tariff on Energy Made Easy. For this tariff combination, 15 of the

retailers had at least one market offer on Energy Made Easy.

Table 10 Bills for a typical residential flat rate with controlled load super economy customer, March quarter 2018





1st Energy 2,213 1,798 1,755 1,846

AGL 1,958 1,696 1,476 1,849

Alinta Energy 1,953 1,557 1,521 1,593

Amaysim Energy 2,228 1,893 1,893 1,893

Click Energy 2,228 2,212 1,892 2,629


$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



18





Dodo Power & Gas 2,149 1,733 1,654 1,811


Energy Locals 2,000 1,859 1,859 1,859


Mojo Power 2,193 2,012 1,952 2,072


Origin Energy 1,921 1,735 1,639 1,921


Powerdirect 1,958 1,742 1,742 1,742

Powershop 2,142 1,907 1,757 2,142

QEnergy 2,413 1,758 1,525 1,945

Red Energy 1,896 1,660 1,625 1,696


Simply Energy 2,067 1,795 1,696 1,895

Simple average 2,034 1,808 1,706 1,920

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the March quarter.


Figure 7 Bills for a typical residential flat rate with controlled load super economy customer, March quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy in the March quarter.


$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800



19

The March quarter table and graph show that for a typical customer on this tariff combination:




Natural Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)).

June quarter

In the June quarter, 20 retailers had offers that combined a residential flat rate tariff with a

controlled load super economy tariff on Energy Made Easy. For this tariff combination, 15 of the


Table 11 Bills for a typical residential flat rate with controlled load super economy customer, June quarter 2018





1st Energy 2,213 1,797 1,755 1,844

AGL 1,958 1,684 1,476 1,908

Alinta Energy 1,953 1,534 1,521 1,546

Amaysim Energy 2,228 1,838 1,782 1,893

Click Energy 2,228 2,261 1,893 2,629


Dodo Power & Gas 2,149 1,654 1,654 1,654


Energy Locals 2,000 1,859 1,859 1,859


Mojo Power 2,193 2,012 1,952 2,072


Origin Energy 1,921 1,770 1,639 1,921


Powerdirect 1,958 1,742 1,742 1,742

Powershop 2,142 1,907 1,757 2,142

QEnergy 2,654 1,614 1,488 1,945

Red Energy 1,896 1,688 1,625 1,806


Simply Energy 2,067 1,784 1,651 1,895

Simple average 2,046 1,790 1,690 1,918

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the June quarter.



20

Figure 8 Bills for a typical residential flat rate with controlled load super economy customer, June quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a residential market offer for this tariff combination on Energy Made Easy in the June quarter.


The June quarter table and graph show that for a typical customer on this tariff combination:





QCA assessment


In the September quarter, 18 retailers had offers for this tariff combination on Energy Made Easy;

of these, 14 had at least one market offer. By the March quarter, 20 retailers had offers for this

tariff combination; of these, 15 had at least one market offer.


Energy—published standing offers for this tariff combination on Energy Made Easy but did not

publish a corresponding market offer during the year.







Alinta Energy's Home Saver Plus (Residential Single Rate with Controlled Load 1) market

offer ($1,567) in the September quarter

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800



21





In the June quarter of 2017, EnergyAustralia's Flexi Saver (Home – Peak with Controlled Load 1 –

No Exit Fees) offer ($1,636) was the lowest market offer available in SEQ.18 We note that the

lowest market offers in 2017–18 were cheaper than the EnergyAustralia offer in the June quarter

of 2017.




and lowest market offers in the June quarter of 2018 was $1,153.

Fifteen retailers had at least one market offer for this tariff combination available in 2017–18.

The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market

offers in 2017–18.

Table 12 Quarterly changes in lowest market offer bill for a typical residential flat rate with controlled load super economy customer, 2017–18


1st Energy –100.0(a) –7.3(b) 0

AGL 5.9 –15.6 0

Alinta Energy 0 –3.0 0

Amaysim Energy — 6.2 –5.9


Dodo Power & Gas 0 –8.7 0


Energy Locals 0 0 0

Mojo Power 0 4.4 0

Origin Energy –6.2 0 0

Powerdirect 0 0 0

Powershop –3.5 0 0

QEnergy 0 –5.5 –2.5

Red Energy 0 –4.2 0


18 QCA 2017b, section 2.4.2 (QCA assessment) shows the EnergyAustralia bill value as $1,623. For this report,

we have recalculated the EnergyAustralia bill using the consumption level used for the 2017–18 report. The 2016–17 report also shows the bill value of Dodo Power & Gas's Energex Res & Controlled Load No Term Market Offer was $1,623. However, when we recalculated the bill with the consumption data used for this report, the bill was $1 more expensive than the EnergyAustralia bill.


22

(a) 1st Energy had two market offers for this tariff combination in the September quarter, but none in the December quarter. (b) 1st Energy's bill change in the March quarter refers to its lowest market offer in the September quarter.

Note: A dash (—) means the retailer did not have a residential flat rate with controlled load super economy market offer published on Energy Made Easy in the preceding quarter.


The table shows that most retailers published new offers during 2017–18 that were cheaper—for

a typical customer—than their previously cheapest offers. Retailers generally increased


2.4.3 Residential flat rate with controlled load economy offers

September quarter

In the September quarter, 18 retailers had offers that combined a residential flat rate tariff with

a controlled load economy tariff on Energy Made Easy. For this tariff combination, 17 of the

retailers had a standing offer, and 14 had at least one market offer on Energy Made Easy.

Table 13 Bills for a typical residential flat rate with controlled load economy customer, September quarter 2017





1st Energy 2,095 1,915 1,797 2,033

AGL 1,904 1,731 1,619 1,808

Alinta Energy 1,899 1,539 1,526 1,552

Click Energy 2,115 2,045 1,796 2,281


Dodo Power & Gas 2,082 1,758 1,758 1,758


Energy Locals — 1,761 1,761 1,761


Mojo Power 2,101 1,861 1,778 1,944

Origin Energy 1,869 1,769 1,701 1,869


Powerdirect 1,904 1,695 1,695 1,695

Powershop 2,024 1,792 1,720 1,821

QEnergy 2,287 1,851 1,571 2,116

Red Energy 1,841 1,647 1,647 1,647


Simply Energy 1,755 1,734 1,614 1,823

Simple average 1,957 1,781 1,692 1,863

Note: A dash (—) means the retailer did not have a standing or market offer for this tariff combination on Energy Made Easy in the September quarter.



23

Figure 9 Bills for a typical residential flat rate with controlled load economy customer, September quarter 2017

Note: Energy Locals did not have a standing offer, and Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a market offer, for this tariff combination on Energy Made Easy in the September quarter.


The September quarter table and graph show that for a typical customer on this tariff

combination:






December quarter

In the December quarter, 19 retailers had offers that combined a residential flat rate tariff with a

controlled load economy tariff on Energy Made Easy. All retailers had a standing offer, and 14 had

at least one market offer on Energy Made Easy.

Table 14 Bills for a typical residential flat rate with controlled load economy customer, December quarter 2017





1st Energy 2,095 — — —

AGL 1,904 1,766 1,700 1,808

Alinta Energy 1,899 1,539 1,526 1,552

Amaysim Energy 2,115 1,745 1,692 1,797

Click Energy 2,115 2,045 1,796 2,281

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



24






Dodo Power & Gas 2,082 1,758 1,758 1,758


Energy Locals 1,918 1,761 1,761 1,761


Mojo Power 2,101 1,861 1,778 1,944

Origin Energy 1,869 1,721 1,595 1,869


Powerdirect 1,904 1,695 1,695 1,695

Powershop 2,024 1,733 1,659 2,024

QEnergy 2,287 1,790 1,571 1,893

Red Energy 1,841 1,647 1,647 1,647


Simply Energy 1,987 1,744 1,632 1,823

Simple average 1,972 1,754 1,678 1,836

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the December quarter.


Figure 10 Bills for a typical residential flat rate with controlled load economy customer, December quarter 2017

Note: 1st Energy, Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy in the December quarter.


$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



25

The December quarter table and graph show that for a typical customer on this tariff

combination:






March quarter

In the March quarter, 20 retailers had offers that combined a residential flat rate tariff with a

controlled load economy tariff on Energy Made Easy. For this tariff combination, 15 of the


Table 15 Bills for a typical residential flat rate with controlled load economy customer, March quarter 2018





1st Energy 2,095 1,713 1,674 1,760

AGL 1,904 1,649 1,436 1,796

Alinta Energy 1,899 1,517 1,481 1,552

Amaysim Energy 2,115 1,797 1,797 1,797

Click Energy 2,115 2,100 1,796 2,495


Dodo Power & Gas 2,082 1,682 1,607 1,758


Energy Locals 1,918 1,761 1,761 1,761


Mojo Power 2,101 1,920 1,860 1,980


Origin Energy 1,869 1,689 1,595 1,869


Powerdirect 1,904 1,695 1,695 1,695

Powershop 2,024 1,801 1,659 2,024

QEnergy 2,287 1,713 1,496 1,893

Red Energy 1,841 1,616 1,584 1,647


Simply Energy 1,987 1,728 1,632 1,823

Simple average 1,963 1,740 1,642 1,847

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the March quarter.


26


Figure 11 Bills for a typical residential flat rate with controlled load economy customer, March quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy in the March quarter.


The March quarter table and graph show that for a typical customer on this tariff combination:





June quarter

In the June quarter, 20 retailers had offers that combined a residential flat rate tariff with a

controlled load economy tariff on Energy Made Easy. For this tariff combination, 15 of the


Table 16 Bills for a typical residential flat rate with controlled load economy customer, June quarter 2018





1st Energy 2,095 1,711 1,674 1,750

AGL 1,904 1,637 1,436 1,854

Alinta Energy 1,899 1,494 1,481 1,507

Amaysim Energy 2,115 1,745 1,692 1,797

Click Energy 2,115 2,146 1,797 2,495


$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



27





Dodo Power & Gas 2,082 1,607 1,607 1,607


Energy Locals 1,918 1,761 1,761 1,761


Mojo Power 2,101 1,920 1,860 1,980


Origin Energy 1,869 1,723 1,595 1,869


Powerdirect 1,904 1,695 1,695 1,695

Powershop 2,024 1,801 1,659 2,024

QEnergy 2,516 1,586 1,472 1,893

Red Energy 1,841 1,644 1,584 1,760


Simply Energy 1,987 1,715 1,588 1,823

Simple average 1,975 1,723 1,627 1,845

Note: A dash (—) means the retailer did not have a market offer for this tariff combination on Energy Made Easy in the June quarter.


Figure 12 Bills for a typical residential flat rate with controlled load economy customer, June quarter 2018

Note: Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have a market offer for this tariff combination on Energy Made Easy for the June quarter.


$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600



28

The June quarter table and graph show that for a typical residential flat rate tariff with controlled

load economy customer:





QCA assessment


In the September quarter, 18 retailers had offers for this tariff combination on Energy Made Easy;

of these, 14 had at least one market offer. By the March quarter, 20 retailers had offers for this

tariff combination; of these, 15 had at least one market offer.


Energy—published standing offers for this tariff combination on Energy Made Easy but did not

publish a corresponding market offer during the year.







Alinta Energy's Home Saver Plus (Residential Single Rate with Controlled Load 2) market

offer ($1,526) in the September quarter





In the June quarter of 2017, EnergyAustralia's Flexi Saver (Home – Peak with Controlled Load 2 –

No Exit Fees) offer ($1,601) was the lowest market offer available in SEQ.19 We note that the

lowest market offers in 2017–18 were cheaper than the EnergyAustralia offer in the June quarter

of 2017.





Fifteen retailers had at least one market offer for this tariff combination available in 2017–18.



19 QCA 2017c, section 2.4.3 (QCA assessment) shows the EnergyAustralia bill value as $1,582. For this report,

we have recalculated the EnergyAustralia bill using the consumption level used for the 2017–18 report.


29

Table 17 Quarterly changes in lowest market offer bill for a typical residential flat rate with controlled load economy customer, 2017–18


1st Energy –100.0(a) –6.8(b) 0

AGL 5.0 –15.5 0

Alinta Energy 0 –2.9 0

Amaysim Energy — 6.3 –5.9


Dodo Power & Gas 0 –8.6 0


Energy Locals 0 0 0

Mojo Power 0 4.6 0

Origin Energy –6.2 0 0

Powerdirect 0 0 0


QEnergy 0 –4.8 –1.6

Red Energy 0 –3.8 0


(a) 1st Energy had two market offers for this tariff combination in the September quarter, but none in the December quarter. (b) 1st Energy's bill change in the March quarter refers to its lowest market offer in the September quarter.

Note: A dash (—) means the retailer did not have a residential flat rate with controlled load economy market offer published on Energy Made Easy in the preceding quarter.


The table shows that most retailers published new offers during 2017–18 that were cheaper—for

a typical customer—than their previously cheapest offers. Retailers generally increased


2.4.4 Small business flat rate offers

September quarter

In the September quarter, 14 retailers had offers for the small business flat rate tariff on Energy

Made Easy. For this tariff, 12 of the retailers had a standing offer, and 12 had at least one market

offer, on Energy Made Easy.


30

Table 18 Bills for a typical small business flat rate customer, September quarter 2017





1st Energy 2,705 — — —

AGL 2,489 2,195 2,121 2,236

Alinta Energy 2,469 2,092 2,079 2,105

Click Energy 2,581 2,496 2,496 2,496



Energy Locals — 2,211 2,211 2,211

Lumo Energy 2,404 2,157 2,157 2,157

Origin Energy 2,461 2,305 2,161 2,461

Powerdirect 2,489 2,236 2,236 2,236

Powershop 2,635 2,334 2,240 2,372

QEnergy 2,803 2,230 1,830 2,593

Red Energy 2,404 2,155 2,155 2,155

Simply Energy — 2,156 2,093 2,256

Simple average 2,529 2,236 2,160 2,305

Note: A dash (—) means the retailer did not have a small business flat rate standing or market offer on Energy Made Easy in the September quarter.


Figure 13 Bills for a typical small business flat rate customer, September quarter 2017

Note: Energy Locals and Simply Energy did not have a small business flat rate standing offer, and 1st Energy and Diamond Energy did not have a small business flat rate market offer, on Energy Made Easy in the September quarter.

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000



31


The September quarter table and graph show that for a typical small business flat rate tariff

customer:

standing offer bills ranged from $2,404 (Lumo Energy – Business Options (Standing Offer)

and Red Energy – Standing Offer (Business)) to $2,803 (QEnergy – Biz Your Way Single Rate)

market offer bills ranged from $1,830 (QEnergy – Flexi Biz 17 Single Rate) to $2,593 (QEnergy

– Biz Saver Single Rate 24 Months).

December quarter

In the December quarter, 16 retailers had small business flat rate offers on Energy Made Easy.

For this tariff, 15 of the retailers had standing offers, and 14 retailers had at least one market

offer, on Energy Made Easy.

Table 19 Bills for a typical small business flat rate customer, December quarter 2017





1st Energy 2,705 — — —

AGL 2,489 2,196 2,121 2,236

Alinta Energy 2,469 2,092 2,079 2,105

Amaysim Energy 2,581 2,452 2,452 2,452

Click Energy 2,581 2,496 2,496 2,496



Energy Locals 2,460 2,211 2,211 2,211

ERM Power 2,895 2,316 2,316 2,316

Lumo Energy 2,404 2,157 2,157 2,157

Origin Energy 2,461 2,294 2,161 2,461

Powerdirect 2,489 2,236 2,236 2,236

Powershop 2,635 2,257 2,161 2,635

QEnergy 2,803 2,199 1,830 2,350

Red Energy 2,404 2,155 2,155 2,155

Simply Energy — 2,228 2,201 2,256

Simple average 2,545 2,256 2,201 2,317

Note: A dash (—) means the retailer did not have a small business flat rate standing or market offer on Energy Made Easy in the December quarter.



32

Figure 14 Bills for a typical small business flat rate customer, December quarter 2017

Note: Simply Energy did not have a small business flat rate standing offer, and 1st Energy and Diamond Energy did not have a small business flat rate market offer, on Energy Made Easy in the December quarter.


The December quarter table and graph show that for a typical customer on a small business flat

rate tariff:

standing offer bills ranged from $2,326 (Diamond Energy – Diamond Power) to $2,895 (ERM

Power – ERM Business Energy Standing Offer)

market offer bills ranged from $1,830 (QEnergy – Flexi Biz 17 Single Rate) to $2,635

(Powershop – Base Rates).

March quarter

In the March quarter, 18 retailers had small business flat rate offers on Energy Made Easy. For

this tariff, 16 of the retailers had at least one market offer, on Energy Made Easy.

Table 20 Bills for a typical small business flat rate customer, March quarter 2018





1st Energy 2,705 2,181 2,181 2,181

AGL 2,489 2,223 2,121 2,294

Alinta Energy 2,469 2,092 2,079 2,105

Amaysim Energy 2,581 2,452 2,452 2,452

Click Energy 2,581 2,522 2,452 2,617



Energy Locals 2,460 2,211 2,211 2,211

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000



33





ERM Power 2,895 2,193 2,069 2,316

Lumo Energy 2,404 2,157 2,157 2,157



Origin Energy 2,461 2,293 2,123 2,461

Powerdirect 2,489 2,236 2,236 2,236

Powershop 2,635 2,345 2,161 2,635

QEnergy 2,803 2,017 1,830 2,204

Red Energy 2,404 2,155 2,155 2,155

Simply Energy 2,449 2,228 2,201 2,256

Simple average 2,539 2,246 2,188 2,312

Note: A dash (—) means the retailer did not have a small business flat rate market offer on Energy Made Easy in the March quarter.


Figure 15 Bills for a typical small business flat rate customer, March quarter 2018

Note: Diamond Energy and Momentum Energy did not have a small business flat rate market offer on Energy Made Easy in the March quarter.


The March quarter table and graph show that for a typical customer on a small business flat rate

tariff:

standing offer bills ranged from $2,326 (Diamond Energy – Diamond Power) to $2,895 (ERM

Power – ERM Business Energy Standing Offer)

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000



34

market offer bills ranged from $1,830 (QEnergy – Flexi Biz 17 Single Rate) to $2,635


June quarter

In the June quarter, 18 retailers had small business flat rate offers on Energy Made Easy. For this

tariff, 16 of the retailers had at least one market offer on Energy Made Easy.

Table 21 Bills for a typical small business flat rate customer, June quarter 2018





1st Energy 2,705 2,181 2,181 2,181

AGL 2,489 2,217 2,191 2,294

Alinta Energy 2,469 2,092 2,079 2,105

Amaysim Energy 2,581 2,452 2,452 2,452

Click Energy 2,581 2,452 2,452 2,452



Energy Locals 2,460 2,211 2,211 2,211

ERM Power 2,895 2,193 2,069 2,316

Lumo Energy 2,404 2,157 2,157 2,157



Origin Energy 2,461 2,284 2,123 2,461

Powerdirect 2,489 2,236 2,236 2,236

Powershop 2,635 2,345 2,161 2,635

QEnergy 3,083 1,884 1,806 2,204

Red Energy 2,404 2,155 2,155 2,155

Simply Energy 2,449 2,228 2,201 2,256

Simple average 2,555 2,223 2,172 2,302

Note: A dash (—) means the retailer did not have a small business flat rate market offer on Energy Made Easy in the June quarter.



35

Figure 16 Bills for a typical small business flat rate customer, June quarter 2018

Note: Diamond Energy and Momentum Energy did not have a small business flat rate market offer on Energy Made Easy in the June quarter.


The June quarter table and graph show that for a typical small business flat rate tariff customer:

standing offer bills ranged from $2,326 (Diamond Energy – Diamond Power and Diamond

Solar offers) to $3,083 (QEnergy – Biz Your Way Single Rate)

market offer bills ranged from $1,806 (QEnergy – Flexi Saver Biz Single Rate) to $2,635


QCA assessment


In the September quarter, 14 retailers had small business flat rate offers on Energy Made Easy;

of these, 12 had at least one market offer. By the March quarter, 18 retailers had small business

flat rate offers; of these, 16 had at least one market offer.

Two retailers—Diamond Energy and Momentum Energy—published small business flat rate

standing offers on Energy Made Easy but did not publish a corresponding market offer during the

year.







QEnergy's Flexi Biz 17 Single Rate market offer ($1,830) in the September quarter

QEnergy's Flexi Saver Biz 17 Single Rate market offer ($1,806) in the June quarter.

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200



36




In the June quarter of 2017, EnergyAustralia's Basic Saver (Business) offer ($1,956) was the lowest

market offer available in SEQ.20 We note that the lowest market offers in 2017–18 were cheaper

than the EnergyAustralia offer in the June quarter of 2017.




and lowest market offers in the June quarter of 2018 was $829.

Sixteen retailers had at least one small business market offer available in 2017–18. The table

below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers

in 2017–18.

Table 22 Quarterly changes in lowest market offer bill for a typical small business flat rate customer, 2017–18


1st Energy — — 0

AGL 0 0 3.3

Alinta Energy 0 0 0

Amaysim Energy — 0 0

Click Energy 0 –1.8 0

EnergyAustralia 4.7 0 0

Energy Locals 0 0 0

ERM Power — –10.6 0

Lumo Energy 0 0 0

Next Business Energy — — –12.8

Origin Energy 0 –1.8 0

Powerdirect 0 0 0


QEnergy 0 0 –1.3

Red Energy 0 0 0

Simply Energy 4.9 0 0

Note: A dash (—) means the retailer did not have a small business flat rate market offer published on Energy Made Easy in the preceding quarter.


20 QCA 2017c, section 2.4.4 (QCA assessment) shows the EnergyAustralia bill value as $1,972. For this report,



37

The table shows that a number of retailers published new offers during 2017–18 that were

cheaper—for a typical customer—than their previously cheapest offers. Retailers generally

increased conditional discounts and/or used sign-up incentives to reduce the price of their lowest

offer.

Highest standing offers

In our 2016–17 market monitoring report, we stated that we did not characterise the difference

between the highest standing offer and the lowest market offer as a potential saving for

customers in circumstances where we were aware that no customers were contracted to the

highest standing offers.21 For our market monitoring reports for the January to March, and April

to June 2018 quarters of 2017–18, we invited retailers with standing offers which were more than

10 per cent higher than the average standing offer to inform the QCA how many customers were

contracted to their standing offers.22

For the small business flat rate tariff, ERM Power advised us that it had three customers in the

March quarter, and one customer in the June quarter, on its standing offer. Further, ERM Power

considered its standing offer to be a short-term interim arrangement, generally applicable when

a customer comes off-contract and is yet to enter into another market contract, or where the

owner of the connection has not been established.23

2.4.5 Small business time of use offers

September quarter

In the September quarter, 14 retailers had offers for the small business time of use tariff on

Energy Made Easy. For this tariff, 12 of the retailers had standing offers and 10 had at least one

market offer on Energy Made Easy.

Table 23 Bills for a typical small business time of use customer, September quarter 2017





1st Energy 7,843 — — —

AGL 7,206 6,251 5,939 6,341

Alinta Energy 7,186 5,865 5,852 5,878

Click Energy 7,412 7,168 7,168 7,168



Energy Locals — 6,236 6,236 6,236


Origin Energy 7,094 6,586 6,192 7,094

Powerdirect 7,206 6,339 6,339 6,339

Powershop 7,650 6,805 6,502 7,026

21 QCA 2017b, sections 2.4.1, 2.4.4 and 2.4.5. 22 QCA 2018d, Appendix B (highest standing offers); QCA 2018e, Appendix B (highest standing offers). 23 Ibid.


38





QEnergy 8,224 6,504 5,821 7,550

Red Energy 6,874 — — —

Simply Energy — 6,049 5,819 6,177

Simple average 7,305 6,397 6,179 6,626

Note: A dash (—) means the retailer did not have a small business TOU standing or market offer on Energy Made Easy in the September quarter.


Figure 17 Bills for a typical small business time of use customer, September quarter 2017

Note: Energy Locals and Simply Energy did not have a small business TOU standing offer, and 1st Energy, Diamond Energy, Lumo Energy and Red Energy did not have a small business TOU market offer, on Energy Made Easy in the September quarter.


The September quarter table and graph show that for a typical customer on a small business time

of use tariff:

standing offer bills ranged from $6,767 (EnergyAustralia – Basic Saver Business 5 Day Time of

Use) to $8,224 (QEnergy – Biz Your Way Time of Use)

market offer bills ranged from $5,819 (Simply Energy – Business Save 10 Online) to $7,550

(QEnergy – Biz Saver TOU 24 Months).

December quarter

In the December quarter, 16 retailers had offers for the small business time of use tariff on Energy

Made Easy. For this tariff, 12 of the retailers had standing offers and 11 had at least one market

offer on Energy Made Easy.

$5,000

$5,400

$5,800

$6,200

$6,600

$7,000

$7,400

$7,800

$8,200

$8,600



39

Table 24 Bills for a typical small business time of use customer, December quarter 2017





1st Energy 7,843 — — —

AGL 7,206 6,255 5,939 6,341

Alinta Energy 7,186 5,865 5,852 5,878

Amaysim Energy 7,412 7,041 7,041 7,041

Click Energy 7,412 — — —


EnergyAustralia — 6,204 6,016 6,454

Energy Locals 6,896 6,236 6,236 6,236

ERM Power 8,033 6,888 6,888 6,888


Origin Energy — 6,534 6,192 7,094

Powerdirect 7,206 6,339 6,339 6,339

Powershop 7,650 6,554 6,273 7,650

QEnergy — 6,429 5,821 7,013

Red Energy 6,874 — — —

Simply Energy — 6,150 6,122 6,177

Simple average 7,326 6,408 6,247 6,647

Note: A dash (—) means the retailer did not have a small business TOU standing or market offer on Energy Made Easy in the December quarter.


Figure 18 Bills for a typical small business time of use customer, December quarter 2017

$5,000

$5,400

$5,800

$6,200

$6,600

$7,000

$7,400

$7,800

$8,200

$8,600



40

Note: EnergyAustralia, Origin Energy, QEnergy and Simply Energy did not have a small business TOU standing offer, and 1st Energy, Click Energy, Diamond Energy, Lumo Energy and Red Energy did not have a small business TOU market offer, on Energy Made Easy in the December quarter.


The December quarter table and graph show that for a typical customer on a small business time

of use tariff:

standing offer bills ranged from $6,874 (Lumo Energy – Business Options (Standing Offer)

and Red Energy – Standing Offer (Business)) to $8,033 (ERM Power – ERM Business Energy

Standing Offer)

market offer bills ranged from $5,821 (QEnergy – Flexi Biz 17 Time of Use) to $7,650


March quarter

In the March quarter, 18 retailers had offers for the small business time of use tariff on Energy

Made Easy. For this tariff, 16 of the retailers had at least one market offer on Energy Made Easy.

Table 25 Bills for a typical small business time of use customer, March quarter 2018





1st Energy 7,843 6,558 6,558 6,558

AGL 7,206 6,340 5,939 6,539

Alinta Energy 7,186 5,865 5,852 5,878

Amaysim Energy 7,412 7,041 7,041 7,041

Click Energy 7,412 7,241 7,041 7,513



Energy Locals 6,896 6,236 6,236 6,236

ERM Power 8,033 6,424 5,961 6,888

Lumo Energy 6,874 6,175 6,175 6,175



Origin Energy 7,094 6,552 6,061 7,094

Powerdirect 7,206 6,339 6,339 6,339

Powershop 7,650 6,809 6,273 7,650

QEnergy 8,224 6,417 5,821 7,013

Red Energy 6,874 6,161 6,161 6,161

Simply Energy 6,806 6,150 6,122 6,177

Simple average 7,499 6,473 6,291 6,673


41

Notes: A dash (—) means the retailer did not have a small business TOU market offer on Energy Made Easy in the March quarter. Next Business Energy applied a declining block tariff to peak consumption on its small business TOU offers. During 7am–9pm, the first 27.4kWh of consumption (per working day) was priced at 36 c/kWh (GST excl.), with remaining consumption priced at 34 c/kWh (GST excl.). As we have assumed the typical small business TOU customer consumed 10,920 kWh annually during peak periods, we have calculated Next Business Energy's declining block bills using 7,158 kWh at the higher usage rate and 3,762 kWh at the lower usage rate.


Figure 19 Bills for a typical small business time of use customer, March quarter 2018

Notes: Diamond Energy did not have a small business TOU market offer on Energy Made Easy in the March quarter. The standing offer for Momentum Energy ($10,166) is not included in this graph, as it is above the range of other standing offers and its inclusion would make comparisons between other offers difficult.


The March quarter table and graph show that for a typical customer on a small business time of

use tariff:

standing offer bills ranged from $6,767 (EnergyAustralia – Basic Saver Business 5 Day Time of

Use) to $10,166 (Momentum Energy – Momentum Standing Offer)

market offer bills ranged from $5,821 (QEnergy – Flexi Biz 17 Time of Use) to $7,650


June quarter

In the June quarter, 18 retailers had small business time of use offers on Energy Made Easy. For

this tariff, 16 of the retailers had at least one market offer on Energy Made Easy.

$5,000

$5,400

$5,800

$6,200

$6,600

$7,000

$7,400

$7,800

$8,200

$8,600



42

Table 26 Bills for a typical small business time of use customer, June quarter 2018





1st Energy 7,843 6,558 6,558 6,558

AGL 7,206 6,341 6,206 6,539

Alinta Energy 7,186 5,865 5,852 5,878

Amaysim Energy 7,412 7,041 7,041 7,041

Click Energy 7,412 7,041 7,041 7,041



Energy Locals 6,896 6,236 6,236 6,236

ERM Power 8,033 6,424 5,961 6,888

Lumo Energy 6,874 6,175 6,175 6,175



Origin Energy 7,094 6,526 6,061 7,094

Powerdirect 7,206 6,339 6,339 6,339

Powershop 7,650 6,809 6,273 7,650

QEnergy 9,047 6,038 5,768 7,013

Red Energy 6,874 6,161 6,161 6,161

Simply Energy 6,806 6,150 6,122 6,177

Simple average 7,545 6,391 6,215 6,644

Notes: A dash (—) means the retailer did not have a small business TOU market offer on Energy Made Easy in the June quarter. Next Business Energy applied a declining block tariff to peak consumption on its small business TOU offers. For its standing and 8800 Business TOU (12% Pay on Time Discount) offers, during 7am–9pm, the first 27.4 kWh of consumption (per working day) was priced at 36 c/kWh (GST excl.), with remaining consumption priced at 34 c/kWh (GST excl.). For the 8800 Business TOU (7% Pay on Time Discount) offer, during 7am–9pm, the first 27.4 kWh of consumption (per working day) was priced at 26.5 c/kWh (GST excl.), with remaining consumption priced at 25 c/kWh (GST excl.). As we have assumed the typical small business TOU customer consumed 10,920 kWh annually during peak periods, we have calculated Next Business Energy's declining block bills using 7,158 kWh at the higher usage rate and 3,762 kWh at the lower usage rate.



43

Figure 20 Bills for a typical small business time of use customer, June quarter 2018

Note: Diamond Energy did not have a small business TOU market offer on Energy Made Easy in the June quarter. The standing offer for Momentum Energy ($10,166) is not included in this graph as it is above the range of other standing offers and its inclusion would make comparisons between other offers difficult.


The June quarter table and graph show that for a typical small business time of use tariff

customer:

standing offer bills ranged from $6,767 (EnergyAustralia – Basic Business 5 Day Time of Use)

to $10,166 (Momentum Energy – Standing Offer D)

market offer bills ranged from $5,633 (Next Business Energy – 8800 Business TOU (7% Pay

on Time Discount)) to $7,650 (Powershop – Base Rates).

QCA assessment


In the September quarter, 14 retailers had small business time of use offers on Energy Made Easy;

of these, 12 had at least one market offer. By the March quarter, 18 retailers had small business

time of use offers; of these, 16 had at least one market offer.

Two retailers—Diamond Energy and Momentum Energy—published small business time of use

standing offers on Energy Made Easy but did not publish a corresponding market offer during the

year.







Simply Energy's Business Save 10 Online market offer ($5,819) in the September quarter

$5,000

$5,400

$5,800

$6,200

$6,600

$7,000

$7,400

$7,800

$8,200

$8,600

$9,000

$9,400



44

Next Business Energy's 8800 Business TOU (7% Pay on Time Discount) market offer ($5,633)

in the June quarter.




In the June quarter of 2017, EnergyAustralia's Basic Saver (Business – 5 Day Time of Use) offer

($5,361) was the lowest market offer available in SEQ.24 We note that the lowest market offers

in 2017–18 were more expensive than the EnergyAustralia offer in the June quarter of 2017.





Sixteen retailers had at least one small business time of use market offer available in 2017–18.



Table 27 Quarterly changes in lowest market offer bill for a typical small business time of use customer, 2017–18


1st Energy — — 0

AGL 0 0 4.5

Alinta Energy 0 0 0

Amaysim Energy — 0 0

Click Energy –100.0(a) –1.8(b) 0

EnergyAustralia 1.7 0 0

Energy Locals 0 0 0

ERM Power — 0 0

Lumo Energy — –13.5 0

Next Business Energy — — –20.2

Origin Energy 0 –2.1 0

Powerdirect 0 0 0


QEnergy 0 0 –0.9

Red Energy — — 0

Simply Energy 5.2 0 0

(a) Click Energy had one small business TOU market offer in the September quarter, but none in the December quarter. (b) Click Energy's bill change in the March quarter refers to its market offer in the September quarter.

24 QCA 2017b, section 2.4.5 (QCA assessment) shows the EnergyAustralia bill value as $5,302. For this report,



45

Note: A dash (—) means the retailer did not have a small business TOU market offer published on Energy Made Easy in the preceding quarter.


The table shows that a number of retailers published new offers during 2017–18 which were

cheaper—for a typical customer—than their previously cheapest offers. Retailers generally

increased conditional discounts and/or used sign-up incentives to reduce the price of their lowest

offer.

2.5 Distribution non-network charges


The table below summarises the reconnection and disconnection fees identified on retailers'

residential flat rate standing and market offers available on Energy Made Easy in the June quarter

of 2017–18.

Table 28 Reconnection and disconnection fees included on residential flat rate offers, June quarter

Retailer Reconnection fee ($) Disconnection fee ($)

AGL 10.98 10.98

Alinta Energy 10.98 —

Amaysim Energy 10.98 8.76

Click Energy 10.98 8.76

Dodo Power and Gas 19.00 19.00

EnergyAustralia 10.75 / 10.98(a) —

Lumo Energy 10.98 —

Momentum Energy 10.75 10.75

Origin Energy 10.98 / 23.43(b) 10.98

Powerdirect 10.98 10.98

Red Energy 10.75 / 10.98(c) —

Simply Energy 9.98 / 10.98(d) —

(a) $10.75 only applied to Secure Saver (Home) offers. (b) $23.42 only applied to one of Origin Energy's Smart Saver offers. (c) $10.75 only applied to Easy Saver 10% (Residential) offer available from 26 April 2017. On 1 February 2018, Red Energy published a new Easy Saver 10% (Residential) offer on Energy Made Easy which applied a reconnection fee of $10.98. The previous Easy Saver 10% (Residential) offer was not expired. (d) $10.98 applied to Save 10, Save 10 Online, Plus 15 and Plus 15 Online offers available from 12 October 2017. The Plus 15 and Plus 15 Online offers were expired on 23 May 2018. $9.98 applied to all new offers effective from and after 21 March 2018.

Notes: A dash (—) means the retailer did not include the fee type in any of its residential flat rate standing or market offers in the June quarter. 1st Energy, Diamond Energy, Energy Locals, Mojo Power, Next Business Energy, People Energy, Powershop, QEnergy and Sanctuary Energy did not include any reconnection or disconnection fees on their residential flat rate standing or market offers published on Energy Made Easy in the June quarter. Where a retailer has a reconnection or disconnection fee identified, it did not necessarily attach that fee to all of its residential flat rate standing or market offers it published on Energy Made Easy in 2017–18. All fees were reported as being GST inclusive.


46

QCA assessment

Twelve retailers included reconnection and/or disconnection fees in their residential flat rate

offers; this is an increase of three from the analysis shown in the market monitoring report for

2016–17.25 The reconnection and/or disconnection fee amounts for nine of the twelve retailers

were within the range of $8.76 and $10.98.


The table below summarises the reconnection and disconnection fees identified on retailers'

small business flat rate standing and market offers available on Energy Made Easy in the June

quarter of 2017–18.

Table 29 Reconnection and disconnection fees included on small business flat rate offers, June quarter 2018

Retailer Reconnection fee ($) Disconnection fee ($)

AGL 10.98 10.98

Alinta Energy 10.98 —

Amaysim Energy 10.98 8.76

Click Energy 10.98 8.76

EnergyAustralia 10.98 —

Lumo Energy 10.98 —

Momentum Energy 10.75 10.75

Origin Energy 10.98 10.98

Powerdirect 10.98 10.98

Red Energy 10.75 / 10.98(a) —

Simply Energy 9.98 / 10.98(b) —

(a) $10.75 only applied to Easy Saver 10% (Business) offer available from 26 April 2017. On 1 February 2018, Red Energy published a new Easy Saver 10% (Business) offer on Energy Made Easy which applied a reconnection fee of $10.98. The previous Easy Saver 10% (Business) offer was not expired. (b) $9.98 applied to standing offers and $10.98 applied to market offers.

Notes: A dash (—) means the retailer did not include the fee type in any of its small business flat rate standing or market offers in the June quarter. 1st Energy, Diamond Energy, Energy Locals, ERM Power, Next Business Energy, Powershop and QEnergy did not include any reconnection or disconnection fees on their small business flat rate standing or market offers published on Energy Made Easy in the June quarter. Where a retailer has a reconnection or disconnection fee identified, it did not necessarily attach that fee to all of its small business flat rate standing or market offers it published on Energy Made Easy in 2017–18. All fees were reported as being GST inclusive.

QCA assessment

Eleven retailers included reconnection and/or disconnection fees in their residential flat rate

offers; this is an increase of four from the analysis shown in the market monitoring report for

2016–17.26 The reconnection and/or disconnection fee amounts for all eleven retailers were

within the range of $8.76 and $10.98.

25 QCA 2017b, section 2.5.1 (Table 23). 26 QCA 2017b, section 2.5.2 (Table 24).


47

2.5.3 Additional fee information on Energy Made Easy

In our 2016–17 report, we observed that some retailers included information on their flat rate

offers on Energy Made Easy that referred to the potential for distribution non-network charges—

other than those listed on Energy Made Easy—to be levied on customers. Accordingly, we

suggested that all retailers should clearly identify on Energy Made Easy where customers can

obtain information on distribution non-network charges that apply, or may apply, to their offers.

We consider that our observations also apply to generally available market offers for 2017–18.

Therefore, we remain of the view that all retailers should clearly identify on Energy Made Easy

where customers can obtain information on distribution non-network charges that apply, or may

apply, to their offers.

2.6 Conclusion

The box below summarises the key points of our comparison and assessment of standing and

market offer prices for 2017–18.

Comparison and assessment

Standing offer bills were generally more expensive than market offer bills in all the quarters of 2017–18.

Market offers varied from quarter to quarter. Market offer customers could have saved on electricity bills by switching to one of their retailer's market offers, or by switching to a market offer from another retailer.

Many of the retailers' cheapest market offers in 2017–18 were lower than the cheapest offers available in the June quarter of 2017.

To help lower their bill, customers need to regularly compare offers on Energy Made Easy, especially at the beginning of the financial year.

To improve the clarity of information for customers, and make offers more comparable, we consider all retailers should clearly identify on Energy Made Easy:

(a) their metering charges, or state that they do not levy metering charges if

that is the case, in their offers

(b) where customers can obtain information on additional distribution non-

network charges that apply, or may apply, to their offers.

Queensland Competition Authority Discounts, savings and benefits

48

3 DISCOUNTS, SAVINGS AND BENEFITS

This chapter compares and assesses the types of discounts, savings and benefits attached to

residential and small business flat rate market offers in each quarter of 2017–18. Many retailers

offered discounts of some form in 2017–18. In many cases discounts related to customers'

payment and billing arrangements, and they usually applied only to the usage charge, not also

supply charges. Retailers also offered customers a greater variety of incentives and benefits in

2017–18, compared to 2016–17, when incentives related mostly to signing up online. Most of the

retailers with market offers also attached GreenPower options to their offers. However,

discounting on market offers was again very complex in 2017–18, as in 2016–17. We present the

potential savings of a customer before and after conditional price discounts and incentives for an

annual bill to illustrate that customers could have saved, if they had received all conditional

discounts and benefits attached to the retailer's lowest market offer.

3.1 Background

Retailers can vary their market offers in a number of ways, including via:

guaranteed and/or conditional discount of different types and levels

different prices for different offers

other incentives and benefits, such as sign-up incentives, fixed supply and usage charges,

and movie tickets.

The types and levels of discounts or incentives attached to a market offer should be an important

consideration for SEQ customers, as these elements can materially affect customers' bills.


Section 2(c) of the Direction requires the market monitoring report to include a comparison and

assessment of the types of discounts, savings and benefits generally available to small customers

in 2017–18.

3.3 QCA methodology

We compared and assessed the types of discounts and benefits generally available in retailers'

market offers using information from Energy Made Easy for each quarter of 2017–18.

From this analysis we could distil:

the types of guaranteed and conditional discounts attached to retailers' generally available

market offers

the types of incentives and benefits attached to retailers' generally available market offers

the GreenPower options attached to retailers' generally available market offers.

GreenPower is a scheme that enables households and business to displace their electricity

usage with certified renewable energy, which is added to the electricity grid on their

behalf.27

27 GreenPower website.

http://www.greenpower.gov.au/


49

Other tables and graphs show how much a customer could have saved by fulfilling the conditions

to receive the price discounts attached to the retailer's lowest market offer. The savings are

shown for the June quarter for each of the most common residential and small business tariffs

and tariff combinations.

3.4 QCA monitoring

The type and value (in dollar and percentage terms) of discounts, savings and benefits for each

retailer did not vary significantly:

between the three residential tariffs and combinations, or

between the two small business tariffs.

Therefore, this chapter summarises the types of discounts and benefits only for the residential

flat rate, and small business flat rate, market offers.

In contrast to 2016–17, however, we did find significant variation in discounts across the four

quarters of 2017–18, particularly after Alinta Energy entered the SEQ market in mid-August 2017

with a 25 per cent (pay on time) discount attached to its Home Saver Plus residential offers.28 It

is therefore useful to view the data on discounts for 2017–18 by quarter.

3.4.1 Residential flat rate market offers

Discounts—September quarter

Residential flat rate market offers available on Energy Made Easy in the September quarter

included the following types of discounts and discount combinations:

guaranteed discounts

pay on time discounts

direct debit discounts

pay on time and direct debit discounts combined

direct debit and e-billing discounts combined

pay on time, approved payment methods (APM) and e-billing discounts combined

online saver discounts.

The table below shows the discounts attached to residential flat rate market offers in the

September quarter.

28 We also discuss this in Chapter 9.


50

Table 30 Discounts attached to residential flat rate market offers, September quarter 2017

Retailer Guaranteed Pay on time Direct debit Pay on time and direct debit

Direct debit and e-billing

Pay on time, APM and e-billing

Online saver

1st Energy — 15% off usage(a) — — — — —

AGL 8% and 5% off bill(b)

10% off usage(c) 12% off usage(d) — — — —

Alinta Energy — 25% off usage(e) — — — — —

Click Energy — — — — — 5%, 7%, 15%, 18% and 22% off bill(f)

—

Dodo Power & Gas

— 15% off usage(g) — — — — —

EnergyAustralia 8% off usage(h) 16% and 18% off usage(i)

— — — — —

Origin Energy 5% and 7% off usage(j)

8% and 10% off usage(k)

— — 10% and 12% off usage(l)

— —

Powerdirect — — — 14% off usage(m) — — —

Powershop — — — — — — 8.16%, 10%, 13.27% and 15%

off bill(n)

Red Energy — 10% off bill(o) — — — — —

Simply Energy — 10% and 15% off usage(p)

— — — — —


51

(a) Applied to Saver offer (available from 18 August to 20 September 2017). (b) 8% applied to Everyday offer (available from 3 July to 18 September 2017), and 5% applied to Everyday offer (available from 18 September 2017). (c) Applied to Savers offer. (d) Applied to Set and Forget offer. (e) Applied to Home Saver Plus and Home Saver Plus (Solar Generation) offers (available from 14 August 2017). (f) 5% applied to Shine Reward (net of solar export) offer, 7% applied to Shine (net of solar export) and Connect offers, 15% applied to Shine Budget (net of solar export) offer, 18% applied to Opal offer, and 22% applied to Topaz offer. (g) Applied to Energex Res No Term offer (available from 10 August 2017). (h) Applied to Anytime Saver (Home) offers. (i) 16% applied to Flexi Saver (Home) offer (available from 3 to 13 July 2017), and 18% applied to Flexi Saver (Home) offers (available from 13 July 2017). (j) 5% applied to Solar Boost, and 7% applied to Solar Boost Plus, offers (both available from 22 September 2017). (k) 8% applied to Saver offer (available from 3 July to 4 September 2017), and 10% applied to Saver offers (available from 4 September 2017). (l) 10% applied to Maximiser offer (available from 3 July to 4 September 2017), and 12% applied to Maximiser offers (available from 4 September 2017). (m) Applied to Queensland Residential Market Offers; these offers combined a 12% pay on time discount and a 2% direct debit discount. (n) 8.16% applied to Standard Saver offers (available to 15 September 2017), 10% applied to Base Rates offers (available to 15 September 2017), 13.27% applied to Standard Saver offer (available from 15 September 2017), and 15% applied to Base Rates offer (available from 15 September 2017). Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 99.13 c/day, compared to 101.15 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 26.80 c/kWh, compared to 27.35 c/kWh on the Base Rates offers. (o) Applied to Easy Saver 10% offer. (p) 10% applied to Save 10 and Save 10 Online offers, and 15% applied to Plus 15 Online and Plus 15 Online offers. From 5 July to 25 August 2017, Simply Energy's supply and usage charges were 85.87 c/day and 26.01 c/kWh respectively, and from 25 August the supply and usage charges were 83.92 c/day and 28.01 c/kWh respectively.

Notes: A dash (—) means the retailer did not include the discount type in any of its residential flat rate market offers on Energy Made Easy in the September quarter. Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have residential flat rate market offers on Energy Made Easy in the September quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



52

QCA assessment

Eleven of the 14 retailers with residential flat rate market offers available in the September

quarter attached guaranteed and/or conditional discounts to at least one of their offers. Energy

Locals and Mojo Power did not attach discounts to any of their residential flat rate market offers.

QEnergy's Flexi Home 15 Single Rate and Flexi Home 17 Single Rate offers included, respectively,

a 15 per cent and a 17 per cent guaranteed discount off supply and usage charges; however, these

discounts were reflected in the prices for these offers, rather than as percentage discounts

applied to bills.

In the final report of its 2018 review of retail energy competition, the Australian Energy Market

Commission (AEMC) encouraged the practice of retailers offering 'no discount' plans. It said that

'[p]ricing practices of energy retailers and the predominance of discounts has created a confusing

and complicated landscape for consumers to traverse'. The AEMC then noted that there had been

'early signs' of improved practices, including more retailers offering 'no discount' plans.29 In our

view, QEnergy's Flexi Home 15 Single Rate and Flexi Home 17 Single Rate offers are examples of

cheaper, undiscounted offers, which are less confusing to customers.

Guaranteed discounts

EnergyAustralia and Origin Energy attached guaranteed discounts ranging from 5 to 8 per cent

off usage charges on at least one of their offers. AGL was the only retailer to offer a guaranteed

discount off the total bill, with a discount of 8 per cent, later reduced to 5 per cent, on its Everyday

offers.

Pay on time discounts

Discounts off usage charges ranged from 8 per cent for Origin Energy's Saver offers to 25 per cent

for Alinta Energy's Home Saver Plus offers. Red Energy attached a 10 per cent discount off the

total bill on its Easy Saver 10% offer.

Direct debit discounts

AGL attached a discount of 12 per cent off usage charges on its Set and Forget offer.

Discount combinations

Click Energy attached discounts ranging from 5 to 22 per cent off the total bill for customers

receiving bills by email, paying by the due date and using approved payment methods. However,

the supply and usage charges on all of the offers were higher than the charges on Click Energy's

standing offer, and the discounts off three of the offers were insufficient to ensure that the bill

would be less than the standing offer.30 This is summarised in the table below. Click Energy's

residential flat rate standing offer is added to the first row of the table for reference.

29 AEMC 2018a, executive summary (page v–vi). 30 The AEMC subsequently addressed this issue through a rule change ('preventing discounts on inflated energy

rates'); see Box 1 in the discount combinations section for the March quarter below.


53

Table 31 Click Energy residential flat rate market offer discounts, September quarter 2017

Offer(s) Discount off bill (%)

Supply charge (cents/day)

Supply charge (% above

standing offer)

Usage charge (cents/kWh)

Usage charge (% above

standing offer)

Standing — 116.000 — 27.700 —

Shine Reward 5% 125.860 8.5% 30.055 8.5%

Shine 7% 125.860 8.5% 30.055 8.5%

Connect 7% 134.560 16.0% 32.132 16.0%

Shine Budget 15% 125.860 8.5% 30.055 8.5%

Opal 18% 125.860 8.5% 30.055 8.5%

Topaz 22% 126.324 8.9% 30.165 8.9%

Note: Discounts on Shine Reward, Shine and Shine Budget offers applied net of solar exports.


Origin Energy combined direct debit and e-billing discounts off usage charges on its Maximiser

offers. The discounts of 10 and 12 per cent were available to customers receiving correspondence

(including bills) by email and paying by direct debit.

Powerdirect combined pay on time and direct debit discounts off usage charges on its

Queensland Residential Market Offers. The discounts were 12 per cent for paying on time, and 2

per cent for paying by direct debit.

Online saver discounts

Powershop attached discounts between 8.16 and 15 per cent off the total bill on its Standard

Saver and Base Rates offers for customers who selected its online saver pack.31

In the Energy Made Easy data we downloaded, Powershop stated in the discount condition field

that the online discount value on Standard Saver offers was 10 or 15 per cent off the total bill.

However, the discount value field listed 8.16 or 13.27 per cent. The information provided by

Powershop on Energy Made Easy does not clarify the reason for this difference in listed and actual

discount percentages. Similarly, Powershop also listed an 18 per cent online discount on its Base

Rates offer available between 1 July to 6 July; however, the actual value was 10 per cent.

Discounted standing offers

Although our analysis of discounts on residential flat rate offers focused on market offers, we also

observed that Diamond Energy's residential flat rate standing offers attached:

a pay on time discount (7 per cent off the total bill) for customers who agreed to receive

invoices by email and who paid in full by an approved payment method by the due date

a direct debit discount (3 per cent off the total bill) for customers who agreed to receive

invoices by email and paid in full by direct debit.

In the Energy Made Easy data we downloaded, the pay on time discount value was 3 per cent,

not 7 per cent.

31 Powershop uses 'Powerpacks' to package and sell its electricity to customers. Powerpacks come in a variety

of sizes and prices so customers can choose how much to purchase at any time; Powershop website.

https://www.powershop.com.au/


54

Discounts—December quarter

Residential flat rate market offers available on Energy Made Easy in the December quarter







pay on time, approved payment methods and e-billing discounts combined

online saver and bulk pack discounts.

The table below shows the discounts attached to residential flat rate market offers in the

December quarter.


55

Table 32 Discounts attached to residential flat rate market offers, December quarter 2017




Online saver / bulk pack

AGL 5% off bill(a) 10% off usage(b) 12% off usage(c) — — — —

Alinta Energy — 25% off usage(d) — — — — —

Amaysim Energy

— — — — — 7%, 15% and 20% off bill(e)

—

Click Energy — — — — — 5%, 7%, 15%, 18% and 22% off bill(f)

—

Dodo Power & Gas

— 15% off usage(g) — — — — —

EnergyAustralia 8% off usage(h) 14%, 18% and 20% off usage(i)

— — — — —

Origin Energy 5% and 7% off usage, and 12% off

bill(j)

10% and 14% off usage(k)

— — 12% and 16% off usage(l)

— —

Powerdirect — — — 14% off usage(m) — — —

Powershop — — — — — — 13.27%, 15%, 16.33% and 18%

off bill(n)

Red Energy — 10% off bill(o) — — — — —

Simply Energy — 10%, 15% and 20% off usage(p)

— — — — —


56

(a) Applied to Everyday and Home Office Everyday offers. (b) Applied to Savers offers. (c) Applied to Set and Forget offers. (d) Applied to Home Saver Plus and Home Saver Plus (Solar Generation) offers. (e) 7% applied to Solar 1 offer (available from 17 October 2017), 15% applied to Electricity 1 offer (available from 17 October 2017), and 20% applied to Electricity 2 offer (available from 17 October to 6 December 2017). (f) 5% applied to Shine Reward (net of solar export), 7% applied to Shine (net of solar export) and Connect offers, 15% applied to Shine Budget offer (net of solar export), 18% applied to Opal offer, and 22% applied to Topaz offer. (g) Applied to Energex Res No Term offer. (h) Applied to Anytime Saver (Home) offers (available to 2 December 2017). (i) 14% applied to Flexi Saver (Home) offers (available from 19 October 2017), 18% applied to Flexi Saver (Home) offer (available to 19 October 2017), and 20% applied to Secure Saver (Home) offer (available from 19 October 2017). (j) 5% (off usage) applied to Solar Boost offers, 7% (off usage) applied to Solar Boost Plus offers, and 12% (off total bill) applied to BillSaver offer (available from 24 November 2017). (k) 10% applied to Saver offers (available to 1 December 2017), and 14% applied to Saver and Saver (Online Only) offers (available from 1 December 2017). (l) 12% applied to Maximiser offers (available to 1 December 2017) and Maximiser (Online Only) offer (available from 12 October to 1 December 2017), and 16% applied to Maximiser and Maximiser (Online Only) offers (available from 1 December 2017). (m) Applied to Queensland Residential Market Offers; these offers combined a 12% pay on time discount and a 2% direct debit discount. (n) 13.27% applied to Standard Saver offer (available to 3 October 2017) and Standard Saver with Online Saver offers (available from 3 October 2017), 15% applied to Base Rates offer (available to 3 October 2017) and Base Rates with Online Saver offers (available from 3 October to 2 November 2017), 16.33% applied to Standard Saver with Bulk Pack offers (available from 3 October 2017), and 18% applied to Base Rates with Bulk Pack offer (available from 3 October to 2 November 2017). Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 99.13 c/day, compared to 101.15 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 26.80 c/kWh, compared to 27.35 c/kWh on the Base Rates offers. (o) Applied to Easy Saver 10% offer. (p) 10% applied to Save 10 and Save 10 Online offers, 15% applied to Plus 15 and Plus 15 Online offers, and 20% applied to Extra 20 and Extra 20 Online offers (available from 8 November and 27 October 2017 respectively).

Notes: A dash (—) means the retailer did not include the discount type in any of its residential flat rate market offers on Energy Made Easy in the December quarter. 1st Energy, Diamond Energy, Lumo Energy, People Energy and Sanctuary Energy did not have residential flat rate market offers on Energy Made Easy in the December quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



57

QCA assessment

Eleven of the 14 retailers with residential flat rate market offers available in the December


Locals, Mojo Power and QEnergy did not attach discounts to any of their residential flat rate

market offers.



off usage charges on at least one of their offers.

AGL attached a discount of 5 per cent off the total bill on its Everyday and Home Office Everyday

offers. In the Energy Made Easy data we downloaded, the discount was stated as being 10 per

cent, but the discount value was 5 per cent. Origin Energy included a 12 per cent discount off the

total bill on its BillSaver offer that became available in November 2017; this widened the range

of discounts off the total bill compared to the September quarter (5 to 8 per cent).


Discounts off usage charges ranged from 10 per cent for AGL's Savers offer, Origin Energy's Saver

offers (available to December 2017) and Simply Energy's Save 10 and Save 10 Online offers, to 25

per cent for Alinta Energy's Home Saver Plus offer. Red Energy included a 10 per cent discount

off the total bill on its Easy Saver 10% offer.

During the quarter, EnergyAustralia, Origin Energy and Simply Energy each published offers with

higher discounts off usage charges than they had available in the September quarter:

EnergyAustralia's new Secure Saver (Home) offer, published in October 2017, included a 20

per cent discount.

Origin Energy's Saver offer and new Saver (Online Only) offer, both published in December

2017, included 14 per cent discounts.

Simply Energy's new Extra 20 and Extra 20 Online offers, published in November and

October respectively, each included a 20 per cent discount.


AGL attached a 12 per cent discount off usage charges on its Set and Forget offers.


Amaysim Energy and Click Energy attached discounts ranging from 5 to 22 per cent off the total

bill for customers receiving bills by email, paying by the due date and using approved payment

methods. Amaysim Energy's supply and usage charges were the same as its standing offer

charges. However, Click Energy's discounts continued to apply to supply and usage charges that

were higher than its standing offer, as summarised in Table 31 above.


and Maximiser (Online Only) offers. The discounts of 12 and 16 per cent were available to

customers receiving correspondence (including bills) by email and paying by direct debit. The 16

per cent discount was attached to Maximiser and Maximiser (Online Only) offers published in

December 2017, and was 4 percentage points higher than the highest e-billing discount attached

to an Origin Energy offer up to December 2017.


Queensland Residential Market Offers. The discounts were 12 per cent for paying on time, and 2



58

Online saver and bulk pack discounts

Powershop included discounts of 13.27 and 15 per cent off the total bill on its Standard Saver and

Base Rates offers for customers who selected its online saver pack. Powershop also introduced

bulk pack discounts on its Standard Saver and Base Rates offers in October 2017, which applied

16.33 or 18 per cent discounts off the total bill when customers purchased the bulk pack upfront.





discount percentages.


Diamond Energy's residential flat rate standing offers attached:






not 7 per cent, until October 2017 when Diamond Energy republished its offers with 7 per cent

for the pay on time discount.

Discounts—March quarter

Residential flat rate market offers available on Energy Made Easy in the March quarter included

the following types of discounts and discount combinations:








The table below shows the discounts attached to residential flat rate market offers in the March

quarter.


59

Table 33 Discounts attached to residential flat rate market offers, March quarter 2018





1st Energy — 18%, 25% and 28% off usage(a)

— — — 30% off usage(b)

—

AGL 3%, 5% and 10% off bill(c)

10%, 16%, 21% and 25% off

usage(d)

12%, 18% and 28% off usage(e)

— — — —

Alinta Energy — 25% and 28% off usage(f)

— — — — —

Amaysim Energy

— — — — — 7% and 15% off bill(g)

—

Click Energy — — — — — 5%, 7%, 10%, 15%, 18% and 22% off

bill(h)

—

Dodo Power & Gas

— 15% and 25% off usage(i)

— — — — —

EnergyAustralia 8% off usage(j) 14%, 20%, 22%, 24% and 28% off

usage(k)

— — — — —

Next Business Energy

— 12% off bill(l) — — — — —

Origin Energy 5% and 7% off usage, and 12% off

bill(m)

14% off usage(n) — — 16% off usage(o) — —

Powerdirect — — — 14% off usage(p) — — —

Powershop — — — — — — 13.27% and 16.33% off bill(q)


60





Red Energy — 10% off bill(r) — — — — —

Simply Energy — 10%, 15% and 20% off usage(s)

— — — — —

(a) 18% applied to Saver offer, 25% applied to Saver offer (available from 16 January to 26 February 2018), and 28% applied to Saver offer (available from 26 February 2018). (b) Applied to EasySaver offers (available from 26 February 2018). (c) 3% applied to Everyday offers (available from 15 January 2018), 5% applied to Everyday offers (available to 15 January 2018), 10% applied to Home Office Everyday offers (available to 15 February 2018). (d) 10% applied to Savers offers (available to 15 January 2018), 16% applied to Savers offers (available from 15 January to 13 February 2018), 21% applied to Savers Home Connect offers (available from 26 February 2018), and 25% applied to Savers offers (available from 13 February 2018). (e) 12% applied to Set and Forget offers (available to 15 January 2018), 18% applied to Set and Forget offers (available from 15 January to 13 February 2018), and 28% applied to Set and Forget offers (available from 13 February 2018). (f) 25% applied to Home Saver Plus and Home Saver Plus (Solar Generation) offers (available to 11 February 2018), and 28% applied to Home Saver Plus and Home Saver Plus (Solar Generation) offers (available from 11 February 2018). (g) 7% applied to Solar 1 offer (net of solar export), and 15% applied to Electricity 1 offer. (h) 5% applied to Shine Reward (net of solar export) offers (available to 1 March 2018), 7% applied to Shine (net of solar export) offers (available to 1 March 2018), Connect offer (available to 1 March 2018) and Solar (net of solar export) offer (available from 1 March 2018), 10% applied to Solar Light (net of solar export) offer (available from 1 March 2018), 15% applied to Shine Budget (net of solar export) offers (available to 1 March 2018) and Agate offer (available from 1 March 2018), 18% applied to Opal offers (available to 1 March 2018), and 22% applied to Topaz offer (available to 1 March 2018). (i) 15% applied to Energex Res No Term offer (available to 23 February 2018), and 25% applied to Energex Res No Term offer (available from 23 February 2018). (j) Applied to Anytime Saver (Home) offers. (k) 14% applied to Flexi Saver (Home) offers (available to 8 February 2018), 20% applied to Secure Saver (Home) offers (available to 8 February 2018) and Flexi Saver (Home) offer (available from 8 February to 8 March 2018), 22% applied to Secure Saver (Home) offer (available from 8 February to 8 March 2018), 24% applied to Flexi Saver (Home) offer (available from 8 March 2018), and 28% applied to Secure Saver (Home) offer (available from 8 March 2018). (l) Applied to 8400 Domestic Supply offer (available from 26 February 2018). (m) 5% (off usage) applied to Solar Boost offers, 7% (off usage) applied to Solar Boost Plus offers, and 12% (off total bill) applied to BillSaver offers. (n) Applied to Saver and Saver (Online Only) offers. (o) Applied to Maximiser and Maximiser (Online Only) offers. (p) Applied to Queensland Residential Market Offer; this offer combined a 12% pay on time discount and a 2% direct debit discount. (q) 13.27% applied to Standard Saver with Online Saver offer, and 16.33% applied to Standard Saver with Bulk Pack offer. Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 99.13 c/day, compared to 101.15 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 26.80 c/kWh, compared to 27.35 c/kWh on the Base Rates offers. (r) Applied to Easy Saver 10% offers. (s) 10% applied to Save 10 and Save 10 Online offers, 15% applied to Plus 15 and Plus 15 Online offers, and 20% applied to Extra 20 offer (available to 31 January 2018) and Extra 20 Online offer (available to 31 January 2018).

Notes: A dash (—) means the retailer did not include the discount type in any of its residential flat rate market offers on Energy Made Easy in the March quarter. Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have residential flat rate market offers on Energy Made Easy in the March quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



61

QCA assessment

Thirteen of the 16 retailers with residential flat rate market offers available in the March quarter

attached guaranteed and/or conditional discounts to at least one of their offers. Energy Locals,

Mojo Power and QEnergy did not attach discounts to any of their residential flat rate market

offers.



off usage charges on at least one of their offers. AGL and Origin Energy attached discounts ranging

from 3 to 12 per cent off the total bill on at least one of their offers.


Discounts off usage charges ranged from 10 per cent for AGL's Savers offer and Simply Energy's

Save 10 and Save 10 Online offers, to 28 per cent for one of 1st Energy's Saver offers, Alinta

Energy's Home Saver Plus offer, and EnergyAustralia's Secure Saver (Home) offer. Red Energy

attached a 10 per cent discount off the total bill on its Easy Saver 10% offers, and Next Business

Energy offered 12 per cent off the total bill on its 8400 Domestic Supply offer.

This range of discounts off usage charges (10 to 28 per cent) was wider than during the December

quarter (10 to 25 per cent), after Alinta Energy increased the discount on its Home Saver Plus

offer to 28 per cent discount in February 2018. 1st Energy and EnergyAustralia then also increased

their highest discounts to 28 per cent on, respectively, their Saver and Secure Saver (Home)

offers.

AGL and Dodo Power & Gas increased their highest discounts off usage charges in February from,

respectively, 10 and 15 per cent, to 25 per cent.

1st Energy's discounts on two of its three Saver offers were notable for applying to supply and

usage charges that were higher than the retailer's standing offer. The supply and usage charges

on 1st Energy's standing offer were 112.80 cents per day and 27.97 cents per kilowatt hour

respectively, compared to 114.00 cents per day and 29.32 cents per kilowatt hour on two of its

Saver market offers. The supply and usage charges on the third Saver offer were below the

charges on the standing offer.


AGL's discount ranged from 12 to 28 per cent off usage charges on its Set and Forget offers. During

the December quarter the discount was 12 per cent, but in this quarter AGL increased the

discount on the Set and Forget offer twice; firstly to 18 per cent in January 2018, and then to 28

per cent in February 2018.


1st Energy attached a 30 per cent discount off usage charges on its EasySaver offers when

customers paid on time with direct debit and used e-billing. The 30 per cent discount was the

highest headline discount in the market in 2017–18. The supply and usage charges on the

EasySaver offers were 114.00 cents per day and 29.32 cents per kilowatt hour, which were higher

than the retailer's standing offer.

Amaysim Energy and Click Energy included discounts ranging from 5 to 22 per cent off the total


methods. Amaysim Energy's supply and usage charges were the same as its standing offer

charges. Until 1 March 2018, Click Energy's discounts continued to apply to supply and usage

charges that were higher than the retailer's standing offer. However, after 1 March 2018, Click


62

Energy's market offers applied the same supply and usage charges as its standing offer. This is

summarised in the table below. Click Energy's residential flat rate standing offer is added to the

first row of the table for reference.

Table 34 Click Energy residential flat rate market offer discounts, March quarter 2018



Supply charge (% above standing

offer)


Usage charge (% above standing

offer)

Standing — 116.000 — 27.700 —

Shine Reward(a) 5% 125.860 8.5% 30.055 8.5%

Shine Reward(b) 5% 128.760 11.0% 30.747 11.0%

Shine(a) 7% 125.860 8.5% 30.055 8.5%

Shine(b) 7% 128.760 11.0% 30.747 11.0%

Connect(c) 7% 134.560 16.0% 32.132 16.0%

Shine Budget(a) 15% 125.860 8.5% 30.055 8.5%

Shine Budget(b) 15% 128.760 11.0% 30.747 11.0%

Opal(a) 18% 125.860 8.5% 30.055 8.5%

Opal(b) 18% 132.240 14.0% 31.578 14.0%

Topaz(c) 22% 126.324 8.9% 30.165 8.9%

Agate(d) 15% 116.000 0.0% 27.700 0.0%

Solar(d) 7% 116.000 0.0% 27.700 0.0%

Solar Light(d) 10% 116.000 0.0% 27.700 0.0%

(a) Offer expired 2 January 2018. (b) Offer available from 2 January to 1 March 2018. (c) Offer expired 1 March 2018. (d) Offer available from 1 March 2018.

Note: Discounts on Shine Reward, Shine, Shine Budget, Solar and Solar Light offers applied net of solar exports.



63

Box 1: Discounts on inflated market offers rule change

In December 2017, the Federal Minister for the Environment and Energy, on behalf of

the Australian Government, submitted a rule change request to the AEMC that aimed to

address the application of discounts on market offers with rates higher than their

corresponding standing offer. In its consultation paper on the proposed rule change

(published March 2018), the AEMC identified Click Energy as being the only retailer

who—in January 2018—had market offers on Energy Made Easy where supply and usage

charges were both higher than its standing offer. The AEMC also noted that, as at 15

March 2018, it no longer appeared that Click Energy had market offers with supply and

usage charges above its standing offer available on Energy Made Easy.32

In May 2018, the AEMC established a rule—to apply from July 2018—preventing retailers

from providing discounts in a market retail contract where at least one rate is above the

equivalent rate in a standing offer, and no rates in the market offer are below an

equivalent rate in a standing offer. The AEMC reasoned that the rule change would

prevent retailers from publishing offers where no customer could be better off under the

undiscounted market offer than under the standing offer.33

In July 2018, the Australian Competition and Consumer Commission (ACCC) announced

that it had initiated proceedings in the Federal Court against Amaysim Energy (trading as

Click Energy). The ACCC alleged that the retailer had made false or misleading marketing

claims about discounts and savings that Victorian and Queensland customers could

obtain, in breach of the Australian Consumer Law. The ACCC alleged that Click Energy's

representations—between around October 2017 and March 2018—that customers could

get discounts of between 7 and 29 per cent off bills for paying on time were false or

misleading because the discounts offered applied to Click Energy's market offer rates,

which varied and were higher than Click Energy’s standing offer rates.34


and Maximiser (Online Only) offers. The 16 per cent discount was available to customers receiving

correspondence (including bills) by email and paying by direct debit.


Queensland Residential Market Offer. The discounts were 12 per cent for paying on time, and 2



Powershop included discounts of 13.27 and 16.33 per cent off the total bill on its Standard Saver

offers for customers who purchased the corresponding online saver or bulk pack upfront.






32 AEMC 2018b, section 5.1.1. 33 AEMC 2018c, summary (page ii). 34 ACCC 2018a.


64




invoices by email and who paid in full by an approved payment method by due date



Discounts—June quarter

Residential flat rate market offers available on Energy Made Easy in the June quarter included the

following types of discounts and discount combinations:








The table below shows the discounts attached to residential flat rate market offers in the June

quarter.


65

Table 35 Discounts attached to residential flat rate market offers, June quarter 2018





1st Energy — 18% and 28% off usage(a)

— — — 30% off usage(b) —

AGL 3%, 10% and 14% off bill(c)

21% and 25% off usage(d)

28% off usage(e) — — — —

Alinta Energy — 28% off usage(f) — — — — —

Amaysim Energy

— — — — — 7%, 15% and 20% off bill(g)

—

Click Energy — — — — — 7%, 10% and 15% off bill(h)

—

Dodo Power & Gas

— 25% off usage(i) — — — — —

EnergyAustralia 8% and 28% off usage(j)

20%, 24% and 28% off usage(k)

— — — — —


— 12% off bill(l) — — — — —

Origin Energy 5% and 7% off usage and 12% off

bill(m)

10% and 14% off usage(n)

— — 16% off usage(o) — —

Powerdirect — — — 14% off usage(p) — — —

Powershop — — — — — — 13.27% and 16.33% off bill(q)

Red Energy — 10% off bill(r) — — — — —

Simply Energy — 10%, 15%, 18%, 20% and 21% off

usage(s)

— — — — —


66

(a) 18% applied to Saver offer (available from 20 September 2017), and 28% applied to Saver offer (available from 26 February 2018). (b) Applied to EasySaver offer. (c) 3% applied to Everyday offers (available to 16 April 2018), 10% applied to Home Office Everyday offers (available from 15 February 2018), and 14% applied to Everyday offers (available from 16 April 2018). (d) 21% applied to Savers Home Connect offers, and 25% applied to Savers offers. (e) Applied to Set and Forget offers. (f) Applied to Home Saver Plus and Home Saver Plus (Solar Generation) offers. (g) 7% applied to Solar 1 offer, 15% applied to Electricity 1 offer, and 20% applied to Electricity 2 offer. (h) 7% applied to Solar (net of solar exports) offer, 10% applied to Solar Light (net of solar exports) offer, and 15% applied to Agate offer. (i) Applied to Energex Res No Term Offer. (j) 8% applied to Anytime Saver (Home) offers (available to 3 May 2018), and 28% applied to Anytime Saver (Home) offer (available from 3 May 2018). (k) 20% applied to Flexi Saver (Home) offer (available from 3 May 2018), 24% applied to Flexi Saver (Home) offers (available to 3 May 2018), and 28% applied to Secure Saver (Home) offers. (l) Applied to 8400 Domestic Supply offer (available to 14 June 2018). (m) 5% applied to Solar Boost offers, 7% applied to Solar Boost Plus offers, and 12% applied to BillSaver offer. (n) 10% applied to Origin Smart Saver offers (available from 15 June 2018), and 14% applied to Saver and Saver (Online Only) offers. The Smart Saver offers included a 1 per cent bonus discount off electricity and natural gas usage charges where customers signed up their residential natural gas to Origin Smart Saver (Market Offer). (o) Applied to Maximiser and Maximiser (Online Only) offers. (p) Applied to Queensland Residential Market Offer. (q) 13.27% applied to Standard Saver with Online Saver offer, and 16.33% applied to Standard Saver with Bulk Pack offer. (r) Applied to Easy Saver 10% and Qantas Red Saver offers. Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 99.13 c/day, compared to 101.15 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 26.80 c/kWh, compared to 27.35 c/kWh on the Base Rates offers. (s) 10% applied to Save 10 offer, Save 10 Online offers, AFL Plus 10 FIT offer, AFL Plus 10 Online offers, Movies Plus 10 FIT offer and Movies Plus 10 Online offers, 15% applied to Plus 15 and Plus 15 Online offers (available to 23 May 2018), 18% applied to Plus 18 FIT offer and Plus 18 Online offer, 20% applied to Extra 20 FIT offer, and 21% applied to RACQ Plus 21 FIT offer and RACQ Plus 21 Online offer.

Notes: A dash (—) means the retailer did not include the discount type in any of its residential flat rate market offers on Energy Made Easy in the June quarter. Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy did not have residential flat rate market offers on Energy Made Easy in the June quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



67

QCA assessment

Thirteen of the 16 retailers with residential flat rate market offers available in the June quarter


Mojo Power and QEnergy did not attach discounts to any of their residential flat rate market

offers.



off usage on at least one of their offers.

AGL and Origin Energy attached discounts ranging from 3 to 14 per cent off the total bill on at

least one of their offers. The range of discounts was wider than during the March quarter (3 to

12 per cent), because AGL included a 14 per cent discount on its Everyday offer available from

April 2018.


Discounts off usage charges ranged from 10 per cent for Origin Energy's Smart Saver offer and

several of Simply Energy's offers, to 28 per cent for 1st Energy's Saver offer (available from

February 2018), Alinta Energy's Home Saver Plus offers, and EnergyAustralia's Secure Saver

(Home) offers.

Discounts off the total bill ranged from 10 per cent for Red Energy's Easy Saver 10% and Qantas

Red Saver offers to 12 per cent for Next Business Energy's 8400 Domestic Supply offer.


AGL attached a 28 per cent discount off usage charges on its Set and Forget offers.


1st Energy attached a 30 per cent discount off usage charges on its (remaining) EasySaver offer

when customers paid on time with direct debit and used e-billing. The supply and usage charges

on the EasySaver offer were higher than the retailer's standing offer.

Amaysim Energy and Click Energy attached discounts ranging from 7 to 20 per cent off the total


methods.


and Maximiser (Online Only) offers. The discount of 16 per cent was available to customers

receiving correspondence (including bills) by email and paying by direct debit.


Queensland Residential Market Offer. The discounts were 12 per cent for paying on time, and 2



Powershop included discounts of 13.27 and 16.33 per cent off the total bill on its Standard Saver

offers where customers purchased the corresponding online saver or bulk pack upfront.







68







Other incentives and benefits

The table below shows the other incentives and benefits attached to residential flat rate market

offers during 2017–18.

Table 36 Other incentives and benefits attached to residential flat rate market offers, 2017–18

Retailer Other incentives and benefits

AGL Online sign-up credit: $25 sign-up credit when the customer signed up online (Fixed, Everyday, Savers and Set and Forget offers available from 3 July 2017 to 15 January 2018, and Home Office Everyday offer available on 9 October 2017).

Online sign-up credit: $50 sign-up credit when the customer signed up online (Everyday, Savers and Set and Forget offers available from 15 January 2018, and Solar Savers offers available from 24 May 2018).

Online sign-up benefit: Amazon Echo device when the customer signed up online, limited to one per supply address during any 12-month period (Savers Home Connect offer available from 26 February 2018). AGL stated on the offer that the recommended retail price of the device was $149.

Dodo Power & Gas General incentive: From time to time, Dodo Power & Gas may provide promotional offers (including one-off payments and/or products) through promotional codes, which may be redeemed when signing up. These codes do not change the rates, fees or charges on the offer.

EnergyAustralia GreenPower benefit: Supply the PureEnergy20 component of the plan at no extra cost for 12 months when the customer selected the PureEnergy20 option (Flexi Saver (Home) offer available from 3 to 13 July 2017).

Fixed price: No price rises for the next two years, including no government, network or consumer price index increases; and no premium added before the rate is fixed (Rate Fix (Home) offers available from 3 July to 2 August 2017).

Online sign-up credit: $50 credit on the first bill when the customer signed up online (Flexi Saver (Home) offers available from 19 October 2017 to 8 February 2018, and Anytime Saver (Home) offer available from 3 May 2018).(a)

Price match: No increase in supply or usage charges during benefit period; if market supply and usage charges decrease during benefit period, the customer will have lower charges applied to the plan (Secure Saver (Home) offers available from 19 October 2017).

Mojo Power Mojo points: $480 credits via 12 bill credits of $40 per month; membership fee of $360 also applied (EnergyPass offer available from 1 December 2017).

Origin Energy Online sign-up credit: $50 credit when the customer switched to Origin Energy online. The credit applied towards the charges on first bill (Maximiser (Online Only) offers available from 12 October 2017, Saver offer (available from 30 October to 1 December 2017), and Saver (Online Only) offers available from 1 December 2017).

Red Energy Qantas points: The customer received 10,000 Qantas points when switching to Red Energy, and seven Qantas points per $1 of bill paid on time (Red Plus offer available from 9 April 2018).


69


Qantas points: The customer received 10,000 Qantas points when switching to Red Energy, and two Qantas points per $1 of bill paid on time (Red Saver offer available from 9 April 2018).

Simply Energy Online sign-up credit: $25 off the first bill when the customer signed up online (Save 10 Online and Plus 15 Online offers available from 5 July 2017, and AFL Plus 10 Online and Movies Plus 10 Online offers available from 18 April 2018).

Online sign-up credit: $50 off the first bill when the customer signed up online (Save 10 Online, AFL Plus 10 Online, Movies Plus 10 Online, Plus 18 Online and RACQ Plus 21 Online offers available from 14 May 2018).

Movie tickets: The customer received 1 Gold Class movie ticket or 2 Event Cinema movie tickets every three months during the benefit period (Movies Plus 10 FIT offer available from 18 April 2018 and Movies Plus 10 Online offer available from 14 April 2018).

Monthly credit: $10 credit on monthly electricity bills (AFL Plus 10 FIT offer available from 18 April 2018 and AFL Plus 10 Online offer available from 14 April 2018).

(a) The incentive on the Flexi Saver (Home) offer was incorrectly listed as a discount rather than an incentive on Energy Made Easy.

Notes: 1st Energy, Alinta Energy, Amaysim Energy, Click Energy, Energy Locals, Next Business Energy, Powerdirect, Powershop and QEnergy did not include any other incentives or benefits in their residential flat rate market offer(s) in 2017–18. Where a retailer had an incentive of benefit identified, it did not necessarily attach the incentive or benefit to all of its residential flat rate market offers. With the exception of Simply Energy—who state on Energy Made Easy that incentives are applied to bills before GST—retailers' incentives are GST inclusive. We assume EnergyAustralia's incentives are GST inclusive.


QCA assessment

Seven of the 16 retailers who had residential market offers on Energy Made Easy in 2017–18

included other incentives and benefits on at least one of their offers. This is three more than the

number of retailers (four) who included other incentives and benefits on at least one of their

market offers in 2016–17.35

Retailers also diversified the range of incentives and benefits offered to residential customers in

2017–18, compared to 2016–17 when incentives that provided direct savings to customer bills

related mostly to signing up online.36 New types of incentives and benefits offered in 2017–18

included:

an Amazon Echo online sign-up benefit (AGL from February 2018)

price matching decreases in market supply and usage charges (EnergyAustralia from October

2017)

Qantas points for switching and paying on time (Red Energy from April 2018)

movie passes (Simply Energy from April 2018).

The only type of incentive or benefit that was offered in 2016–17 and not in 2017–18 was free

electricity supply for one month, which AGL offered on its Set and Forget and Savers offers

available from May 2017.37

35 QCA 2017b, section 3.4.1 (Table 27). 36 QCA 2017b, section 3.4.1. 37 QCA 2017b, section 3.4.1 (Table 27).


70

GreenPower

The table below shows the GreenPower options attached to residential flat rate market offers

during 2017–18.

Table 37 GreenPower options attached to residential flat rate market offers, 2017–18

Retailer GreenPower options

AGL GreenPower options (available on all offers):

Energy equal to 10% of usage fed into the grid from accredited GreenPower generators for $1.10 per week

Energy equal to 20% of usage fed into the grid from accredited GreenPower generators for $1.80 per week

Energy equal to 100% of usage fed into the grid from accredited GreenPower generators for $0.055 per kWh

Click Energy Allowed customers to reduce their emissions by 25%, with GreenPower charges included in the rates (Natural offers only)

Dodo Power & Gas GreenPower options:

Electricity equal to 10% of usage sourced from GreenPower for $0.0099 per kWh

Electricity equal to 100% of usage sourced from GreenPower for $0.099 per kWh(a)

EnergyAustralia PureEnergy options (Anytime Saver (Home), Flexi Saver (Home) offers, and Secure Saver (Home) offers only)

GreenPower charges until 2 January 2018:

PureEnergy 10%—$0.0847 x 10% of total usage


PureEnergy 100%—$0.0847 per kWh

GreenPower charges after 2 January 2018:




Energy Locals Energy equal to 10% GreenPower for $0.009 per kWh (with options for 20%, 50% and 100% GreenPower available through the retailer's website)

Origin Energy GreenPower options:

25% of usage matched with electricity from accredited GreenPower sources for $2 per week

50% of usage matched with electricity from accredited GreenPower sources for $0.0281 per kWh


Powershop GreenPower charges until 2 November 2017:

100% GreenPower for $0.0902 per kWh

GreenPower charges after 2 November 2017:


QEnergy QGreen options:

10% of usage matched with GreenPower for $0.0066 per kWh



71



Red Energy 100% GreenPower for an extra $0.0583 per kWh

(a) Dodo Power & Gas's GreenPower charges description for 10% of usage being sourced from GreenPower stated that the charge was $0.099 per kWh, but the GreenPower amount was $0.0099 per kWh.

Notes: 1st Energy, Alinta Energy, Amaysim Energy, Mojo Power, Next Business Energy, Powerdirect and Simply Energy did not include any GreenPower options in their residential flat rate market offer(s) in 2017–18. Where a retailer had a GreenPower option identified, it did not necessarily attach the option to all of its residential flat rate market offers. GreenPower charges on Energy Made Easy are GST inclusive.

QCA assessment

Nine of the 16 retailers with market offers attached GreenPower options to their offers. The

offers generally allowed customers to select a proportion of electricity to be supplied from

GreenPower-accredited sources for a price in terms of dollars per week or dollars per kilowatt

hour of usage.

EnergyAustralia and Powershop were the only retailers to change GreenPower charges on

residential flat rate market offers during 2017–18. Prior to 2 January 2018, EnergyAustralia priced

GreenPower options at $0.0847 per kilowatt hour; after that, the charges dropped to $0.0495 per

kilowatt hour. Similarly, prior to 2 November 2017, Powershop priced GreenPower options at

$0.0902 per kilowatt hour; after that, the charges dropped to $0.085 per kilowatt hour.

We also observed that AGL, Diamond Energy, Energy Locals, EnergyAustralia, Origin Energy and

QEnergy included GreenPower options on residential flat rate standing offers during 2017–18.

3.4.2 Small business flat rate market offers

Discounts—September quarter

Small business flat rate market offers available on Energy Made Easy in the September quarter




guaranteed and pay on time discounts combined


e-billing discounts

online saver discounts.

The table below shows the discounts attached to small business flat rate market offers in the

September quarter.


72

Table 38 Discounts attached to small business flat rate market offers, September quarter 2017

Retailer Guaranteed Pay on time Guaranteed and pay on time


e-billing Online saver

AGL 13% off usage and 12% off bill(a)

— 15% off usage(b) — — —

Alinta Energy — 20% off usage(c) — — — —

Click Energy — — — 7% off bill(d) — —

EnergyAustralia 10% off usage(e) 5% off usage(f) 12% off usage(g) — — —

Origin Energy 3%, 5% and 13% off usage(h)

— — — 13% off usage(i) —

Powershop — — — — — 8.16%, 10%, 13.27% and 15% off bill(j)

Red Energy — 10% off bill(k) — — — —

Simply Energy 10% off usage(l) — — — — —

(a) 13% (off usage) applied to Business Savers offers (available from 3 July 2017), and 12% (off total bill) applied to Business Everyday offers (available from 15 August 2017). (b) Applied to Business Maximiser offer (available from 3 July 2017); this offer combined a 7% guaranteed discount and an 8% pay on time discount. (c) Applied to Business Saver Plus and Business Saver Plus (Solar Generation) offers (available from 14 August 2017). (d) Applied to Business offers. (e) Applied to Everyday Saver (Business) offers (available from 3 July 2017). (f) Applied to Flexi Saver (Business) offers. (g) Applied to Basic Saver (Business) offers. The three Basic Saver (Business) offers available from 3 July to 24 August 2017 combined a guaranteed 7% discount off usage charges with a 5% pay on time discount, and included a $100 (GST incl.) sign-up incentive (which was incorrectly listed as a discount rather than an incentive). The Basic Saver (Business) offer available from 24 August 2017 combined a guaranteed 6% discount off usage charges with a 6% pay on time discount. (h) 3% applied to Business Solar Boost offers (available from 18 September 2017), 5% applied to Business Solar Boost offer (available from 3 July to 18 September 2017), and 13% applied to BusinessSaver offers (available from 3 July 2017). (i) Applied to Business eSaver offers (available from 3 July 2017). (j) 8.16% applied to Standard Saver offers (available to 15 September 2017), 10% applied to Base Rates offers (available to 15 September 2017), 13.27% applied to Standard Saver offer (available from 15 September 2017), and 15% applied to Base Rates offer (available from 15 September 2017). Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 135.49 c/day, compared to 138.25 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 29.25 c/kWh, compared to 29.85 c/kWh on the Base Rates offers. (k) Applied to Easy Saver 10% (Business) offer. (l) Applied to Business Save 10 and Business Save 10 Online offers. From 5 July to 30 August 2017, Simply Energy's supply and usage charges were 135.25 c/day and 25.59 c/kWh respectively, and from 30 August 2017 its supply and usage charges were 128.30 c/day and 27.75 c/kWh respectively.

Notes: A dash (—) means the retailer did not include the discount type in any of its small business flat rate market offers on Energy Made Easy in the September quarter. 1st Energy and Diamond Energy did not have small business flat rate market offers on Energy Made Easy in the September quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



73

QCA assessment

Eight of the 12 retailers with small business flat rate market offers available in the September


Locals, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small

business flat rate market offers.


Discounts off usage charges ranged from 3 per cent for Origin Energy's Business Solar Boost

offers, to 13 per cent for AGL's Business Savers offers and Origin Energy's BusinessSaver offers.

AGL attached a 12 per cent guaranteed discount off the total bill on its Business Everyday offers.


Discounts off usage charges ranged from 5 per cent for EnergyAustralia's Flexi Saver (Business)

offer to 20 per cent for Alinta Energy's Business Saver Plus offers. Red Energy attached a 10 per

cent pay on time discount off the total bill on its Easy Saver 10% (Business) offer.


AGL and EnergyAustralia combined guaranteed and pay on time discounts on at least one of their

offers. EnergyAustralia attached a 12 per cent discount (6 per cent guaranteed and 6 per cent pay

on time, or 7 per cent guaranteed and 5 per cent pay on time) off the usage charges on its Basic

Saver (Business) offers. AGL attached a 15 per cent discount (7 per cent guaranteed and 8 per

cent pay on time) off usage charges on its Business Maximiser offer.

Click Energy's Business offers attached a 7 per cent discount off the total bill for customers

receiving bills by email, paying by the due date and using approved payment methods. Click

Energy's discounts also applied to supply and usage charges that were higher than the retailer's

(two) standing offers available during the quarter. The supply and usage charges on Click Energy's

standing offers were 143.00 cents per day and 28.800 cents per kilowatt hour respectively,

compared to 148.72 cents per day and 29.952 cents per kilowatt hour on its market offers.

e-billing discounts

Origin Energy attached an e-billing (only) discount of 13 per cent off usage charges on its Business

eSaver offers. The discount was available to customers receiving correspondence (including bills)

by email.

Online saver discounts

Powershop attached discounts ranging from 8.16 to 15 per cent off the total bill on its Standard

Saver and Base Rates offers where customers selected its online saver pack.





discount percentages. Similarly, Powershop also listed an 18 per cent online discount on its Base

Rates offer available between 1 July to 6 July; however, the actual amount was 10 per cent.


Although our analysis of discounts on small business flat rate offers focused on market offers, we

also observed that Diamond Energy's small business flat rate standing offers attached:




74




not 7 per cent.

Discounts—December quarter

Small business flat rate market offers available on Energy Made Easy in the December quarter






e-billing discount



December quarter.


75

Table 39 Discounts attached to small business flat rate market offers, December quarter 2017



e-billing Online saver / bulk pack

AGL 13% off usage and 12% off bill(a)

— 15% off usage(b) — — —


Amaysim Energy — — — 5% off bill(d) — —

Click Energy — — — 7% off bill(e) — —

EnergyAustralia 10% off usage(f) 5% off usage(g) 12% off usage(h) — — —

Origin Energy 3%, 13% and 15% off usage(i)

— — — 13% off usage(j) —

Powershop — — — — — 13.27%, 15%, 16.33% and 18% off

bill(k)

Red Energy — 10% off bill(l) — — — —

Simply Energy 10% off usage(m) — — — — —

(a) 13% (off usage) applied to Business Savers offers, and 12% (off bill) applied to Business Everyday offers (available to 1 December 2017). (b) Applied to Business Maximiser offer (available to 3 November 2017); this offer combined a 7% guaranteed discount and an 8% pay on time discount. (c) Applied to Business Saver Plus and Business Saver Plus (Solar Generation) offers. (d) Applied to Business 1 offer (available from 17 October 2017). (e) Applied to Business offer. (f) Applied to Everyday Saver (Business) offers. (g) Applied to Flexi Saver (Business) offers. (h) Applied to Basic Saver (Business) offers; these offers combined a 6% guaranteed discount and a 6% pay on time discount. (i) 3% applied to Business Solar Boost offers, 13% applied to BusinessSaver offers (available to 1 December 2017), and 15% applied to BusinessSaver offer (available from 1 December 2017). (j) Applied to Business eSaver offer. (k) 13.27% applied to Standard Saver offer (available to 3 October 2017) and Standard Saver with Online Saver offers (available from 3 October 2017), 15% applied to Base Rates offer (available to 3 October 2017) and Base Rates with Online Saver offers (available from 3 October to 2 November 2017), 16.33% applied to Standard Saver with Bulk Pack offers (available from 3 October 2017), and 18% applied to Base Rates with Bulk Pack offer (available from 3 October to 2 November 2017). Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 135.49 c/day, compared to 138.25 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 29.25 c/kWh, compared to 29.85 c/kWh on the Base Rates offers. (l) Applied to Easy Saver 10% (Business) offer. (m) Applied to Business Save 10 and Business Save 10 Online offers.

Notes: A dash (—) means the retailer did not include the discount type in any of its small business flat rate market offers on Energy Made Easy in the December quarter. 1st Energy and Diamond Energy did not have small business flat rate market offers on Energy Made Easy in the December quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



76

QCA assessment

Nine of the 14 retailers with small business flat rate market offers available in the December


Locals, ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of

their small business flat rate market offers.



offers, to 15 per cent on one of Origin Energy's BusinessSaver offers. The range of discounts was

wider than during the September quarter (3 to 13 per cent), because Origin Energy increased the

discount on its BusinessSaver offer from 13 to 15 per cent discount in December 2017. AGL

attached a 12 per cent guaranteed discount off the total bill on its Business Everyday offers.



offer to 20 per cent for Alinta Energy's Business Saver Plus offers. Red Energy attached a 10 per

cent pay on time discount off the total bill on its Easy Saver 10% (Business) offer.


AGL and EnergyAustralia combined guaranteed and pay on time discounts on at least one of their

offers. EnergyAustralia attached a 12 per cent discount (6 per cent guaranteed and 6 per cent pay

on time) off the usage charges on its Basic Saver (Business) offers. AGL attached a 15 per cent

discount (7 per cent guaranteed and 8 per cent pay on time) off the usage charges on its Business

Maximiser offer (available until November 2017).

Amaysim Energy and Click Energy attached discounts of 5 and 7 per cent off the total bill for

customers receiving bills by email, paying by the due date and using approved payment methods.

Amaysim Energy's supply and usage charges were the same its standing offer charges. However,

Click Energy's discount on its Business offer applied to supply and usage charges that were higher

than the retailer's standing offer. As in the September quarter, the supply and usage charges on

Click Energy's standing offer were 143.00 cents per day and 28.800 cents per kilowatt hour

respectively, compared to 148.72 cents per day and 29.952 cents per kilowatt hour on its Business

market offer.

e-billing discounts


eSaver offer. The discount was available to customers receiving correspondence (including bills)

by email.


Powershop attached discounts of 13.27 and 15 per cent off the total bill on its Standard Saver

and Base Rates offers where customers selected its online saver pack. Powershop also introduced

bulk pack discounts on its Standard Saver and Base Rates offers in October 2017, which applied

16.33 and 18 per cent discounts off the total bill when customers purchased the bulk pack

upfront.







77


Diamond Energy's small business flat rate standing offers attached:






not 7 per cent, until October 2017 when Diamond Energy republished its offers with 7 per cent

for the pay on time discount.

Discounts—March quarter

Small business flat rate market offers available on Energy Made Easy for in the March quarter






e-billing discounts



March quarter.


78

Table 40 Discounts attached to small business flat rate market offers, March quarter 2018




1st Energy — 15% off usage(a) — — — —

AGL 10% and 13% off usage, and 12% off

bill(b)

— — — — —



Click Energy — — — 5% and 7% off bill(e) — —

EnergyAustralia 10% off usage(f) 5% off usage(g) 12% off usage(h) — — —


— 12% off bill(i) — — — —


— — — 13% and 15% off usage(k)

—

Powershop — — — — — 13.27% and 16.33% off bill(l)

Red Energy — 10% off bill(m) — — — —

Simply Energy 10% off usage(n) — — — — —

(a) Applied to Saver (Business Peak Only) offer. (b) 10% (off usage) applied to Business Fixed offers (available from 19 March 2018), 13% (off usage) applied to Business Savers offers, and 12% (off total bill) applied to Business Everyday offers. (c) Applied to Business Saver Plus and Business Saver Plus (Solar Generation) offers. (d) Applied to Business 1 offer. (e) 5% applied to Business Plus offer (available from 1 March 2018), and 7% applied to Business offers (available to 1 March 2018). (f) Applied to Everyday Saver (Business) offers. (g) Applied to Flexi Saver (Business) offers. (h) Applied to Basic Saver (Business) offers; these offers combined a 6% guaranteed discount and a 6% pay on time discount. (i) Applied to 8500 Business General Supply (12% Pay on Time Discount) offer (available from 26 February 2018). (j) 3% applied to Business Solar Boost offers, and 15% applied to BusinessSaver offers (available from 1 December 2017). (k) 13% applied to Business eSaver offer (available to 3 January 2018), and 15% applied to Business eSaver offer (available from 3 January 2018). (l) 13.27% applied to Standard Saver with Online Saver offer, and 16.33% applied to Standard Saver with Bulk Pack offer. Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 135.49 c/day, compared to 138.25 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 29.25 c/kWh, compared to 29.85 c/kWh on the Base Rates offers. (m) Applied to Easy Saver 10% (Business) offers. (n) Applied to Business Save 10 and Business Save 10 Online offers.


79

Notes: A dash (—) means the retailer did not include the discount type in any of its small business flat rate market offers on Energy Made Easy in the March quarter. Diamond Energy and Momentum Energy did not have small business flat rate market offers on Energy Made Easy in the March quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its residential flat rate market offers.



80

QCA assessment

Eleven of the 16 retailers with small business flat rate market offers available in the March quarter


ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small




offers, to 15 per cent on Origin Energy's BusinessSaver offers. The range of discounts was wider

than during the September quarter (3 to 13 per cent), because Origin Energy increased the

discount on its BusinessSaver offer from 13 to 15 per cent discount in December 2017. AGL

attached a 12 per cent guaranteed discount off the total bill on its Business Everyday offers.



offer to 20 per cent for Alinta Energy's Business Saver Plus offers.

Discounts off the total bill ranged from 10 per cent for Red Energy's Easy Saver 10% (Business)

offer to 12 per cent for Next Business Energy's 8500 Business General Supply (12% Pay on Time

Discount) offer. Next Business Energy's offer, available from February 2018, widened the range

of discounts off the total bill in the March quarter compared to the December quarter (where

Red Energy's 10 per cent discount was the only such discount available).


Amaysim Energy and Click Energy attached discounts of 5 and 7 per cent off the total bill for

customers receiving bills by email, paying by the due date and using approved payment methods.

Amaysim Energy's supply and usage charges were the same as its standing offer charges. Until 1

March 2018 Click Energy's discounts continued to apply to supply and usage charges that were

higher than the retailer's standing offer. However, after 1 March 2018 Click Energy's market offer

applied the same usage and supply charges as its standing offer. This is summarised in the table

below. Click Energy's residential flat rate standing offer is added to the first row of the table for

reference.

Table 41 Click Energy small business flat rate market offer discounts, March quarter 2018



Supply charge (% above standing

offer)


Usage charge (% above standing

offer)

Standing — 143.000 — 28.800 —

Business(a) 7% 148.720 4.0% 29.952 4.0%

Business(b) 7% 155.870 9.0% 31.392 9.0%

Business Plus(c) 5% 143.000 0.0% 28.800 0.0%

(a) Offer available from 27 July 2017 to 2 January 2018. (b) Offer available from 2 January to 1 March 2018. (c) Offer available from 1 March 2018.


EnergyAustralia combined guaranteed and pay on time discounts on its Basic Saver (Business)

offers. The 12 per cent discount (6 per cent guaranteed and 6 per cent pay on time) applied to

usage charges.


81

e-billing discounts


eSaver offer until (early) January 2018, and 15 per cent off usage charges on its Business eSaver

offer from (early) January 2018. The discounts were available to customers receiving

correspondence (including bills) by email.


Powershop attached a discount of 13.27 off the total bill on its Standard Saver offer where

customers selected its online saver pack. Powershop attached a 16.33 per cent discount off the

total bill on its Standard Saver with Bulk Pack offer when customers purchased the bulk pack

upfront.







Diamond Energy's small business flat rate standing offers attached:





Discounts—June quarter

Small business flat rate market offers available on Energy Made Easy for in the June quarter






e-billing discounts


The table below shows the discounts attached to small business flat rate market offers in the June

quarter.


82

Table 42 Discounts attached to small business flat rate market offers, June quarter 2018




1st Energy — 15% off usage(a) — — — —

AGL 10%, 13% and 15% off usage, and 11% and 12% off bill(b)

— — — — —



Click Energy — — — 5% off bill(e) — —

EnergyAustralia 10% of usage(f) 5% off usage(g) 12% off bill(h) — — —


— 7% and 12% off bill(i) — — — —


11% off bill(k) — — 15% off usage(l) —

Powershop — — — — — 13.27% and 16.33% off bill(m)

Red Energy — 10% off bill(n) — — — —

Simply Energy 10% off usage(o) — — — — —


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(a) Applied to Saver offer. (b) 10% (off usage) applied to Business Fixed offers (available to 21 May 2018), 13% (off usage) applied to Business Savers offers (available to 21 May 2018), 15% (off usage) applied to Business Savers and Business Fixed offers (available from 21 May 2018), 11% (off total bill) applied to Business Everyday offers (available from 17 April to 21 May 2018), and 12% (off total bill) applied to Business Everyday offers (available from 1 December 2017 to 17 April 2018 and from 21 May 2018). (c) Applied to Business Saver Plus and Business Saver Plus (Solar Generation) offers. (d) Applied to Business 1 offer. (e) Applied to Business Plus offer. (f) Applied to Everyday Saver (Business) offers. (g) Applied to Flexi Saver (Business) offers. (h) Applied to Basic Saver (Business) offers; these offers combined a 6% guaranteed discount and a 6% pay on time discount. (i) 7% applied to 8500 Business General Supply (7% Pay on Time Discount) offer, and 12% applied to 8500 Business General Supply (12% Pay on Time Discount) offer (available from 14 June 2018). (j) 3% applied to Business Solar Boost offer, and 15% applied to BusinessSaver offer and Rate Freeze offer (available from 16 April 2018). (k) 11% applied to Business BillSaver offer (available from 16 April 2018). The pay on time discount was incorrectly listed as a guaranteed discount. (l) Applied to Business eSaver offer (available to 1 June 2018). (m) 13.27% applied to Standard Saver with Online Saver offer, 16.33% applied to Standard Saver with Bulk Pack offer. Powershop's offers also included different prices: the supply charge on the Standard Saver offers was 135.49 c/day, compared to 138.25 c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was 29.25 c/kWh, compared to 29.85 c/kWh on the Base Rates offers. (n) Applied to Easy Saver 10% (Business) offers. (o) Applied to Save 10 and Save 10 Online offers.

Note: A dash (—) means the retailer did not include the discount type in any of its small business flat rate market offers on Energy Made Easy in the June quarter. Diamond Energy and Momentum Energy did not have small business flat rate market offers on Energy Made Easy in the June quarter. Where a retailer had a discount identified, it did not necessarily attach the discount to all of its small business flat rate market offers.



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QCA assessment

Eleven of the 16 retailers with small business flat rate market offers available in the June quarter


ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small




offers, to 15 per cent for AGL's Business Savers and Business Fixed offers and Origin Energy's

BusinessSaver and Rate Freeze offers. Discounts off the total bill ranged from 11 to 12 per cent

for AGL's various Business Everyday offers.



offers to 20 per cent for Alinta Energy's Business Saver Plus offer.

Discounts off the total bill ranged from 7 per cent for Next Business Energy's 8500 Business

General Supply (7% Pay on Time Discount) offer to 12 per cent for Next Business Energy's 8500

Business General Supply (12% Pay on Time Discount) offer.


Amaysim Energy and Click Energy attached discounts of 5 per cent off the total bill on,

respectively, their Business 1 and Business Plus offer, for customers receiving bills by email,

paying by the due date and using approved payment methods.

EnergyAustralia combined guaranteed and pay on time discounts on its Basic Saver (Business)

offers. The 12 per cent discount (6 per cent guaranteed and 6 per cent pay on time) applied to

usage charges.

e-billing discounts


eSaver offer. The discount was available to customers receiving correspondence (including bills)

by email.


Powershop attached discounts of 13.27 and 16.33 per cent off the total bill on its Standard Saver

offers for customers who purchased the corresponding online saver or bulk pack upfront.







Diamond Energy's small business flat rate standing offers included:






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Other incentives and benefits

The table below shows the other incentives and benefits attached to small business flat rate

market offers during 2017–18.

Table 43 Other incentives and benefits attached to small business flat rate market offers, 2017–18


EnergyAustralia Sign-up credit: $100 credit off first electricity bill (Basic Saver (Business) offers available from 3 July to 24 August 2017)(a)

Fixed price: No price rises for two years, including no government, network or consumer price index increases; and no premium added before the rate is fixed (Rate Fix (Business) offers available from 3 July 2017). The supply and usage charges on the Rate Fix (Business) offers were 112.80 c/day and 26.10 c/kWh respectively, compared to 123.00 c/day and 26.10 c/kWh hour on EnergyAustralia's other market offers.

ERM Power General incentive: No confusing conditional discounts. Price reviewed only once each 12 month period (Energy Adjustable (Single Rate) offer).

Lumo Energy General incentive: A dedicated account management team during business hours (Business Premium offers).

Origin Energy Sign-up credit: $50 credit when switching electricity to Origin Energy. Credit applied towards the charges after three months of supply. Offer excludes business customers with 20 or more sites (Business eSaver offers available from 18 September 2017 to 1 June 2018).

Rate Freeze: No electricity rate rises during the benefit period (Rate Freeze offers available from 16 April 2018).

Simply Energy Online sign-up credit: $50 first bill online sign-up credit (Save 10 Online offer).

(a) The incentive was incorrectly listed as a discount rather than an incentive on Energy Made Easy.

Notes: 1st Energy, AGL, Alinta Energy, Click Energy, Energy Locals, Mojo Power, Next Business Energy, Powerdirect, Powershop, QEnergy and Red Energy did not include any other incentives or benefits on their small business flat rate market offer(s) in 2017–18. Where a retailer had an incentive of benefit identified, it did not necessarily attach the incentive or benefit to all of its small business flat rate market offers. With the exception of Simply Energy—who state on Energy Made Easy that incentives are applied to bills before GST—retailers' incentives are GST inclusive. We assume EnergyAustralia's incentives are GST inclusive.


QCA assessment

A few retailers offered other incentives and benefits during the 2017–18 reporting period.

Incentives that provided direct savings to customer bills were mostly associated with signing up

with the retailer.

Compared to the incentives and benefits offered on small business flat rate market offers in

2016–17, the only new type offered in 2017–18 was the Rate Freeze offer by Origin Energy.

GreenPower

The table below shows the GreenPower options attached to small business flat rate market offers

during 2017–18.


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Table 44 GreenPower options attached to small business flat rate market offers, 2017–18


AGL GreenPower options:

Energy equal to 100% of usage fed into the grid from accredited GreenPower generators for $0.055 per kWh (available on all offers)

EnergyAustralia PureEnergy options (Basic Business, Flexi Saver (Business) and Everyday Saver (Business) and Basic Saver (Business) offers only)

GreenPower charges until 2 January 2018:




GreenPower charges after 2 January 2018:




Energy Locals 10% GreenPower for $0.009 per kWh (with options ranging from 10% to 100% GreenPower available through the retailer's website)

Origin Energy GreenPower options:




Powershop GreenPower options until 2 November 2017:


GreenPower options after 2 November 2017:


QEnergy QGreen options:




Red Energy 100% GreenPower for $0.0583 per kWh.

Notes: 1st Energy, Alinta Energy, Amaysim Energy, Click Energy, ERM Power, Lumo Energy, Next Business Energy, Powerdirect and Simply Energy did not include GreenPower options on their small business flat rate market offer(s) in 2017–18. Where a retailer has a GreenPower options identified, it did not necessarily attach the option to all of its small business flat rate market offers. GreenPower charges on Energy Made Easy are GST inclusive.

QCA assessment

Seven of the 16 retailers with market offers provided GreenPower options. The offers generally

allowed customers to select a proportion of electricity to be supplied from GreenPower-

accredited sources for a price in terms of dollars per week or dollars per kilowatt hour of usage.

EnergyAustralia and Powershop were the only retailers to reduce GreenPower charges on small

business flat rate market offers in 2017–18. Prior to 2 January 2018, EnergyAustralia priced

GreenPower options at $0.0847 per kilowatt hour; after that, the charges dropped to $0.0495 per


87

kilowatt hour. Similarly, prior to 2 November 2017, Powershop priced GreenPower options at

$0.0902 per kilowatt hour, after that, the charges dropped to $0.085 per kilowatt hour.

We observed that AGL, Diamond Energy, Energy Locals, EnergyAustralia, Origin Energy and

QEnergy also included GreenPower options on their small business flat rate standing offers during

2017–18.

3.4.3 Complexity of discounting

In our 2016–17 report, we commented that, based on our analysis of generally available market

offers:

Discounts were clearly stated in terms of what they were based on—usually the usage

charge.

The different supply and usage charges of retailers could make it difficult, and/or time-

consuming, for customers to determine the value to them of various discount options.

Customers would also need to consider their current and future consumption levels,

discount benefit periods, their willingness and ability to meet conditions attached to

discounts, any incentives, the fees attached to offers, and whether discounts apply to

charges before or after solar feed-in tariffs are applied, to decide which discount would offer

them the best value in terms of bills.38

We consider that these observations also apply to generally available market offers for 2017–18.

We also agree with the ACCC's three key concerns with discounting, as articulated in its final

report on the retail electricity pricing inquiry (published June 2018):

Discounts are applied to different underlying tariffs and different parts of the bill, which is

confusing and means that offers with any kind of discount cannot be easily compared.

Conditional discounts are often not fair to those facing payment difficulties, leading to equity

issues, as those who cannot afford to pay are likely to end up with higher overall bills.

Marketing based on discounts is confusing, as it is often based on conditions, and does not

provide actual price information, meaning that consumers cannot use discounts to estimate

what they can expect to pay.39

3.4.4 Annual bill impacts—before and after conditional price discounts and incentives

The tables and figures below show how much a customer could have saved, if the customer had

received all conditional discounts and benefits attached to the retailer's lowest market offer. The

annual bill amounts that are shown are based on the most common tariffs and tariff combinations

and reflect offers available on Energy Made Easy in the June quarter.

Residential flat rate market offers

In the June quarter, 16 retailers had residential flat rate market offers on Energy Made Easy. The

table and figure below show the difference between annual bills for a typical customer on each

retailer's lowest offer, before and after conditional discounts and incentives.

38 QCA 2017b, section 3.4.3. 39 ACCC 2018b, section 13.2.3.


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Table 45 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate market offers)

Retailer Offer name Bill before conditional

discounts and incentives ($)

Bill after conditional


Saving ($)

1st Energy EasySaver 1,767 1,374 393

AGL Set and Forget 1,513 1,188 325

Alinta Energy Home Saver Plus (Residential Single Rate)

1,559 1,234 325

Amaysim Energy Electricity 2 1,703 1,362 341

Click Energy Agate 1,703 1,447 256

Dodo Power & Gas

Energex Res No Term 1,638 1,345 293

EnergyAustralia Anytime Saver 1,273 1,273 0

Energy Locals Save Me 1,425 1,425 0

Mojo Power Mojo EnergyPass 1,597 1,597 0


8400 Domestic Supply 1,655 1,457 198

Origin Energy Origin Maximiser (Online Only) 1,503 1,328 175

Powerdirect Queensland Residential Electricity

1,563 1,400 163

Powershop Standard Saver with Bulk Pack 1,595 1,334 261

QEnergy Flexi Saver Home Single Rate 1,238 1,238 0

Red Energy Easy Saver 10% & Qantas Red Saver

1,434 1,291 143

Simply Energy Simply RACQ Plus 21 Online 1,533 1,270 263

Notes: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this table. The cheapest market offer for each retailer has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer that yielded the same (lowest) bill value.



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Figure 21 Annual bills for each retailer's lowest market offers before and after conditional discounts and incentives, June quarter 2018 (residential flat rate market offers)

Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives.


Residential flat rate with controlled load super economy market offers

In the June quarter, 15 retailers had market offers for this tariff combination on Energy Made

Easy. The table and figure below show the difference between annual bills for a typical customer

on each retailer's lowest offer, before and after conditional discounts and incentives.

Table 46 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load super economy market offers)





Saving ($)

1st Energy EasySaver (Residential Peak + Controlled Load 1)

2,303 1,755 548


Alinta Energy Home Saver Plus (Residential + Controlled Load 1)

1,953 1,521 432

Amaysim Energy Electricity 2 (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply))

2,228 1,782 446

Click Energy Agate (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply))

2,228 1,893 335

Dodo Power & Gas

Energex Res & Controlled Load No Term

2,046 1,654 392

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

Before conditional discounts & incentives After conditional discounts & incentives


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Saving ($)

EnergyAustralia Anytime Saver (Home – Peak with Controlled Load 1 (No Exit Fees))

1,550 1,550 0

Energy Locals Save Me (Residential – Anytime with Controlled Load 1)

1,859 1,859 0



Powerdirect Queensland Residential Electricity Market Offer

1,958 1,742 216


QEnergy Flexi Saver Home (Single Rate + Controlled Load)

1,488 1,488 0

Red Energy Easy Saver 10% and Qantas Red Saver

1,806 1,625 181

Simply Energy RACQ Plus 21 Online 2,012 1,651 361

Notes: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this table. The cheapest market offer for each retailer has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value.



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Figure 22 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load super economy market offers)

Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value.


Residential flat rate with controlled load economy market offers

In the June quarter, 15 retailers had market offers for this tariff combination on Energy Made



Table 47 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load economy market offers)





Saving ($)

1st Energy EasySaver (Residential Peak + Controlled Load 2)

2,187 1,674 513


Alinta Energy Home Saver Plus (Residential Single Rate with Controlled Load 2)

1,899 1,481 418

Amaysim Energy Electricity 2 (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply))

2,115 1,692 423

Click Energy Agate (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply))

2,115 1,797 318

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

$2,200

$2,300



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Saving ($)

Dodo Power & Gas

Energex Res & Controlled Load No Term

1,983 1,607 376

EnergyAustralia Anytime Saver (Home - Peak with Controlled Load 2 (No Exit Fees))

1,507 1,507 0

Energy Locals Save Me (Residential - Anytime with Controlled Load 2)

1,761 1,761 0



Powerdirect Queensland Residential Electricity Market Offer

1,904 1,695 209


QEnergy Flexi Saver Home (Single Rate + Controlled Load)

1,472 1,472 0

Red Energy Easy Saver 10% & Qantas Red Saver

1,760 1,584 176

Simply Energy RACQ Plus 21 Online 1,932 1,588 344




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Figure 23 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load economy market offers)

Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value.


Small business flat rate market offers

In the June quarter, 16 retailers had small business flat rate market offers on Energy Made Easy.

The table and figure below show the difference between annual bills for a typical customer on

each retailer's lowest offer, before and after conditional discounts and incentives.

Table 48 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (small business flat rate market offers)





Saving ($)

1st Energy 1st Saver 2,488 2,181 307

AGL Business Everyday 2,191 2,191 0

Alinta Energy Business Saver Plus (Single Rate)

2,469 2,079 390

Amaysim Energy Business 1 (Tariff 20 Only) 2,581 2,452 129

Click Energy Business Plus 2,581 2,452 129

EnergyAustralia Basic Saver (Business) 2,359 2,240 119

Energy Locals Save Me (Small Business – Anytime Offer)

2,211 2,211 0

ERM Power Business Energy Adjustable (Peak)

2,069 2,069 0

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

$2,200



94





Saving ($)

Lumo Energy Business Premium (No Exit Fee) 2,157 2,157 0


8500 Business General Supply (7% Pay on Time Discount)

2,194 2,041 153

Origin Energy Business eSaver 2,411 2,123 288

Powerdirect Queensland Small Business Electricity Offer

2,236 2,236 0


QEnergy Flexi Saver Biz Single Rate 1,806 1,806 0

Red Energy Easy Saver 10% (Business) 2,394 2,155 239

Simply Energy Business Save 10 Online 2,201 2,201 0



Figure 24 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (small business flat rate market offers)

Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives.


Small business time of use market offers

In the June quarter, 16 retailers had small business time of use market offers on Energy Made



$1,700

$1,800

$1,900

$2,000

$2,100

$2,200

$2,300

$2,400

$2,500

$2,600



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Table 49 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (small business time of use market offers)





Saving ($)

1st Energy Saver (Business Time of Use) 7,613 6,558 1,055

AGL Business Savers and Business Fixed

6,206 6,206 0

Alinta Energy Business Saver Plus (Two Rate) 7,186 5,852 1,334

Amaysim Energy Business 1 (Tariff 22 Only) 7,412 7,041 371

Click Energy Business Plus 7,412 7,041 371

EnergyAustralia Basic Saver (Business – 5 Day Time of Use)

6,392 6,016 376

Energy Locals Save Me (Small Business – Time of Use Offer)

6,236 6,236 0

ERM Power Business Energy Adjustable (Time of Use)

5,961 5,961 0

Lumo Energy Business Premium (No Exit Fee) 6,175 6,175 0


8800 Business TOU (7% Pay on Time Discount)

6,119 5,633 486

Origin Energy Business eSaver 7,044 6,061 983

Powerdirect Queensland Small Business Electricity Market Offer

6,339 6,339 0

Powershop Standard Saver with Bulk Pack 7,497 6,273 1,224

QEnergy Flexi Saver Biz Time of Use 5,768 5,768 0

Red Energy Easy Saver 10% (Business) 6,846 6,161 685

Simply Energy Business Save 10 Online 6,122 6,122 0




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Figure 25 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (small business time of use market offers)

Notes: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value.


QCA assessment

As was the case for 2016–17, the analysis for 2017–18 shows that most retailers offered

conditional discounts that yielded savings for customers when the discounts were realised by the

customer. These savings ranged from moderate to significant, relative to the bill without

conditional discounts.

The analysis again shows that even though some retailers had different prices across their

different market offers, a retailer's lowest price market offer generally incorporated the highest

conditional discount or incentive. While some retailers did not offer conditional discounts at all,

the annual bills for typical customers of these retailers were often significantly higher than the

after-discount bills for customers of other retailers.

3.5 Conclusion

The box below summarises the key points of our comparison and assessment of discounts,

savings and benefits for 2017–18.

$5,000

$5,500

$6,000

$6,500

$7,000

$7,500



97


The most common form of discounts available in 2017–18 were related to customers' payment and billing arrangements, and usually applied only to the usage charge, rather than to both supply and usage charges.

Alinta Energy's entry into the SEQ market in mid-August 2017—with a 25 per cent (pay on time) discount on its Home Saver Plus residential offers—led several retailers to respond by increasing their headline discounts on a number of their offers.

Nine retailers offered other incentives and benefits in 2017–18. Incentives that provided direct savings to customers were mostly related to signing up to the offer, but there was a greater degree of diversification of incentives and benefits than in 2016–17.

Nine retailers with market offers provided GreenPower options in 2017–18. The offers generally allowed customers to select a proportion of their electricity to be supplied from GreenPower-accredited sources for a price quoted in dollars per week or dollars per kilowatt hour of usage.

Most retailers offered conditional discounts that yielded savings for customers when the discounts were realised by the customer. These savings could range from moderate to significant.

Even though some retailers had different prices across their different market offers, a retailer's lowest market offer generally incorporated the highest conditional discount or incentive.

While some retailers did not offer conditional discounts at all, the annual bills for a typical customer of these retailers were often significantly higher than the after-discount bills for customers of other retailers.

Queensland Competition Authority Retail fees

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4 RETAIL FEES

This chapter compares and assesses retailers' fees for the June quarter of 2018 for residential and

small business flat rate market offers. Most retailers who published residential and/or small

business market offers attached retail fees to at least some of their offers. The types of retail fees

attached to market offers were credit and debit card payment fees, payment processing fees on

payments made by direct debit or over the counter (at Australia Post), paper bill fees, dishonoured

cheque and direct debit payment fees, late payment fees and early termination fees. For most fee

types, the range of the charges was narrow and charges were similar as in 2016–17. As in 2016–

17, retailers did not consistently identify on Energy Made Easy which payment methods were

accepted on their offers. This made it difficult to compare payment processing fees across offers

and retailers.

4.1 Background

Electricity offers can include a number of additional fees levied by retailers. Examples of retail

fees include payment processing fees, dishonoured payment fees, early termination fees and late

payment fees.40 Retailers also pass through to customers certain fees/charges levied by

distributors (distribution non-network charges). These include metering charges, connection,

disconnection and reconnection fees, special meter reading fees and meter inspection fees.41


Section 2(d) of the Direction requires the market monitoring report to include a comparison and

assessment of retailers' fees and charges, in 2017–18, relating to the sale of electricity to

customers on retail market contracts, including early termination charges.

4.3 QCA methodology

We have compared and assessed retailers' fees relating to the sale of electricity to customers

using information obtained from Energy Made Easy for the June quarter of 2018.

4.4 QCA monitoring

The type and value of retail fees and charges for each retailer did not vary significantly:

across the four quarters of 2017–18, or

between the three residential tariffs and combinations, or

between the two small business tariffs.

Therefore, the tables in this chapter only summarise the types of retail fees and charges for the

June quarter of 2018 for residential flat rate, and small business flat rate, market offers. This is

the same approach we used on our market monitoring report for 2016–17.

40 The Competition and Consumer Act, part IVC may prevent retailers from levying excessive payment

processing fees on customers using credit or debit cards; for more information, see ACCC 2016 and ACCC 2018c.

41 For more information, see Chapter 2, sections 2.3 and 2.5, Energex 2017b, and the Electricity Regulation, section 226 and schedule 8.


99


Residential flat rate market offers published on Energy Made Easy for the June quarter included

the following retail fees:

credit and debit card payment fees

processing fees on payments made by direct debit or over the counter (at Australia Post)

paper bill fees

dishonoured cheque and direct debit payment fees (a 'dishonour payment fee')

late payment fees

early termination fees.

The tables below show the retail fees and charges attached to residential flat rate market offers

for the June quarter.

Table 50 Retail payment processing fees attached to residential flat rate market offers, June quarter 2018

Retailer Credit / debit card

fees — general

application (%)

Visa / MasterCard

fees (%)

American Express

(Amex) / Diners Club

fees (%)

Direct debit fees ($)

Paper bill fees ($)

Over the counter (at Australia Post) fees

($)

1st Energy — — — — 2.00 —

AGL 0.45 — — — 1.75(a) 2.00(b)

Amaysim Energy

0.60 — — — — —

Click Energy 0.60 — — — — —

Dodo Power & Gas

— —(c) 2.89 1.90 2.20 —

EnergyAustralia — 0.36 1.50(d) — — —

Energy Locals 1.00 — — — 2.00 —


— 0.77 1.95(e) — 2.00 —

Origin Energy — 0.55(f) — — 1.75 2.00

Powerdirect 0.45 — — — — —

QEnergy — — — — 2.75 —

Simply Energy 0.60(g) — — — 1.65 —

(a) Fee may have applied. (b) Fee may have applied. (c) Dodo Power & Gas stated that payments made using Visa or MasterCard did not incur any surcharge. (d) Applied to payments made with Amex only. (e) Applied to payments made with Amex only. This fee was included in the description of the 0.77% fee for payments made by Visa and MasterCard, not in a separate fee type field. (f) Fee may have applied. (g) 0.60% of total bill or $0.60 cents (sic) for every $100 for payments by credit card; the charge was also subject to change.


100

Notes: A dash (—) means the retailer did not attach the fee type to any of its residential flat rate market offers published on Energy Made Easy for the June quarter. Where a retailer has a retail fee identified, it did not necessarily attach that fee to all of the residential flat rate market offers it published on Energy Made Easy in 2017–18. Alinta Energy, Mojo Power, Powershop and Red Energy had at least one residential flat rate market offer published on Energy Made Easy in the June quarter, but did not attach any payment processing fees to their offer(s).


Table 51 Retail dishonour payment, late payment and early termination fees attached to residential flat rate market offers, June quarter 2018

Retailer Dishonour payment fee -

cheque ($)

Dishonour payment fee - direct debit ($)

Late payment fees ($)

Early termination fees ($)

1st Energy 15.00 7.50 — —

AGL 6.50 2.30 12.73(a) —

Amaysim Energy — — 12.00 —

Click Energy — — 12.00 —

Dodo Power & Gas — 9.50(b) — —

EnergyAustralia — — 12.00 22.00(c)

Energy Locals — 11.00(d) 13.00 —

Origin Energy — — 12.00(e) —

Powerdirect 6.50 2.30 12.73 —

QEnergy 14.85 — — —

(a) Fee may have applied. (b) Fee may have applied. (c) Applied to Secure Saver (Home) offers. (d) The fee was listed as an 'other fee' on Energy Made Easy. We have assigned it to the dishonour payment fee – direct debit category on the basis that Energy Locals' website lists direct debit, credit card and Bpay as its payment methods, and the retailer does not accept payment by cheque.42 (e) Fee may have applied. Applied to all offers except Saver and Saver (Online Only) offers.

Notes: A dash (—) means the retailer did not attach the fee type to any of its residential flat rate market offers published on Energy Made Easy for the June quarter. Where a retailer has a retail fee identified, it did not necessarily attach that fee to all of the residential flat rate market offers it published on Energy Made Easy in 2017–18. Alinta Energy, Mojo Power, Next Business Energy, Powershop, Red Energy and Simply Energy had at least one residential flat rate market offer published on Energy Made Easy for the June quarter, but did not attach any dishonour payment, late payment or early termination fees to their offer(s).


QCA assessment

Twelve of the 16 retailers with residential market offers published on Energy Made Easy in the

June quarter attached retail fees to at least one of their offers. This compares to 9 of the 11

reported in 2016–17. Alinta Energy, Mojo Power, Powershop and Red Energy did not attach retail

fees to any of their residential market offers.

Payment processing fees

Processing fees on credit card payments ranged from 0.36 per cent on payments made to

EnergyAustralia by Visa and MasterCard, to 2.89 per cent on payments made to Dodo Power &

Gas by Amex and Diners cards. Processing fees on debit card payments ranged from 0.45 per cent

42 Energy Locals, 'How can I pay my bill?'.

https://help.energylocals.com.au/prices-and-billing/how-can-i-pay-my-bill


101

by AGL and Powerdirect to 1 per cent charged by Energy Locals. Dodo Power & Gas also stated

that payments made by Bpay or other methods may also incur a processing fee.

Paper bill processing fees ranged from Simply Energy's $1.65 fee to QEnergy's $2.75 fee.

AGL and Origin Energy both charged a $2 over the counter payment fee for payments made at

Australia Post.

Most of the payment processing fees were the same as in 2016–17, but notable exceptions were:

AGL and Powerdirect decreased their credit and debit card payment fees from 0.55 per cent

to 0.45 per cent.

Origin Energy increased its Visa/MasterCard fees from 0.37 per cent (on some of its offers)

to 0.55 per cent on all of its offers.43

However, as was the case in 2016–17, retailers did not consistently identify the payment methods

available, or not available, on their residential flat rate market offers. This continued to make it

difficult to compare payment processing fees across offers and retailers.44

Dishonour payment fees

Fees for dishonoured cheque payments ranged from $6.50 on AGL's and Powerdirect's offers, to

$15 on 1st Energy's offer. Fees for dishonoured direct debit payments ranged from $2.30 on AGL's

and Powerdirect's offers, to $11 on Energy Locals' offer.

In 2016–17, AGL and Powerdirect were the only retailers to include dishonoured cheque payment

fees to their offers. We note that the fees of $10 (AGL) and $12 (Powerdirect) in 2016–17 were

higher than in 2017–18. AGL's and Powerdirect's dishonoured direct debit payment fees of $3.50

(AGL) and $5 (Powerdirect) in 2016–17 were also higher than their fees in 2017–18.45

Late payment fees

Late payment fees ranged from $12 levied by Amaysim Energy, Click Energy, EnergyAustralia and

Origin Energy (did not apply to Saver offers), to $13 levied by Energy Locals.

Of the retailers without a late payment fee, 1st Energy, Alinta Energy, Dodo Power & Gas, Next

Business Energy, Origin Energy, Red Energy and Simply Energy had pay on time discounts on at

least one of their offers, thereby providing a separate incentive to customers to pay on time.46

Early termination fees

An early termination fee must be a reasonable estimate of the retailer's costs resulting from early

termination, and the manner of calculating the fee must be detailed in the contract.47 One

retailer, EnergyAustralia, charged an early termination fee. This $22 fee applied only to the Secure

Saver (Home) offers, which featured price matching for price decreases.48

43 See QCA 2017b, section 4.4.1 (Table 37). 44 In our submissions to the AER's review of its retail pricing information guidelines, we argued that retailers

should be required to specify the payment processing options attached to each retail offer, and further, whether any fees were involved for each type of payment. See QCA 2017a, section 2.3.3 and QCA 2018b, section 2.3.3.

45 See QCA 2017b, section 4.4.1 (Table 38). 46 The retailers' pay on time discounts are outlined in Chapter 3, section 3.4.1. 47 National Energy Retail Rules, rule 49A. 48 The features of the Secure Saver (Home) offer are outlined in Chapter 3, section 3.4.1.


102


Small business flat rate market offers published on Energy Made Easy for the June quarter

included the following retail fees:

credit and debit card payment fees

processing fees on payments made by direct debit or over the counter (at Australia Post)

paper bill fees

dishonoured cheque and direct debit payment fees

late payment fees

early termination fees.

The tables below show the retail fees and charges attached to small business flat rate market

offers for the June quarter 2018.

Table 52 Retail payment processing fees attached to small business flat rate market offers, June quarter 2018

Retailer Credit / debit card fees —

general application (%)

Visa / MasterCard

fees (%)

Amex / Diners Club fees (%)

Paper bill fees ($)

Over the counter (at

Australia Post) fees ($)

1st Energy — — — 2.00 —

AGL 0.45 — — 1.75(a) 2.00(b)

Amaysim Energy

0.60 — — — —

Click Energy 0.60 — — — —

EnergyAustralia — 0.36 1.50(c) — —

Energy Locals 1.00 — — 2.00 —

ERM Power — 0.50 / 0.55(d) 1.87 / 1.65(e) — —


— 0.77 1.95(f) 2.00(g) —

Origin Energy — 0.55(h) — 1.75 2.00

Powerdirect 0.45 — — — —

QEnergy — — — 2.75 —

Simply Energy 0.60(i) — — 1.65 —

(a) Fee may have applied. (b) Fee may have applied. (c) Applied to payments made with Amex only. (d) 0.5% applied to payments made by Visa and 0.55% applied to payments made by MasterCard. (e) 1.87% applied to payments made by Amex and 1.65% applied to payments made by Diners Club. (f) This fee applied for Amex payments only and was included in the description of the 0.77% fee for payments made by Visa and MasterCard, not in a separate fee type field. (g) The fee description for Next Business Energy's 8500 Business General Supply (7% Pay on Time Discount) offer stated that a $0 paper bill fee applied; the fee value was $2.00. (h) Fee may have applied. (i) 0.60% of total bill or $0.60 cents (sic) for every $100 for payments by credit card; the charge was also subject to change.


103

Notes: A dash (—) means the retailer did not attach the fee type to any of its small business flat rate market offers published on Energy Made Easy in the June quarter. Where a retailer has a retail fee identified, it did not necessarily attach that fee to all of the small business flat rate market offers it published on Energy Made Easy in 2017–18. Alinta Energy, Lumo Energy, Powershop and Red Energy had at least one small business flat rate market offer published on Energy Made Easy in the June quarter, but did not attach any payment processing fees to their offer(s).


Table 53 Retail dishonour payment, late payment and early termination fees attached to small business flat rate market offers, June quarter 2018

Retailer Dishonour payment fee -

cheque ($)

Dishonour payment fee - direct debit ($)

Late payment fees ($)

Early termination fees ($)

1st Energy 15.00 7.50 — —

AGL 6.50 2.30 12.73(a) —

Amaysim Energy — — 12.00 —

Click Energy — — 12.00 —

EnergyAustralia — — 12.00 22.00(b)

Energy Locals — 11.00(c) 13.00 —

ERM Power 27.50 27.50 — —

Origin Energy — — 12.00(d) 20.00(e)

Powerdirect 6.50 2.30 12.73(f) —

QEnergy 14.85 — — —

(a) Fee may have applied. (b) Applied to all offers except Flexi Saver (Business) offer. (c) The fee was listed as an 'other fee' on Energy Made Easy. We have assigned it to the dishonour payment fee – direct debit category on the basis that Energy Locals' website lists direct debit, credit card and Bpay as its payment methods, and the retailer does not accept payment by cheque.49 (d) Fee may have applied. (e) Fee may have applied if plan is terminated before the end of the benefit period. Fee did not apply to Origin Supply offer (available from 26 March 2018) or Rate Freeze offer (available from 16 April 2018). (f) Fee may have applied.

Notes: A dash (—) means the retailer did not attach the fee type to any of its small business flat rate market offers published on Energy Made Easy in the June quarter. Where a retailer has a retail fee identified, it did not necessarily attach that fee to all of the small business flat rate market offers it published on Energy Made Easy in 2017–18. Alinta Energy, Lumo Energy, Next Business Energy, Powershop, Red Energy and Simply Energy had at least one small business flat rate market offer published on Energy Made Easy for the June quarter, but did not attach any dishonour payment, late payment or early termination fees to their offer(s).


QCA assessment

Twelve of the 16 retailers with small business flat rate market offers available in the June quarter

attached retail fees to at least one of their offers. Alinta Energy, Lumo Energy, Powershop and

Red Energy did not attach retail fees and charges to any of their small business market offers.

Payment processing fees

Processing fees on debit/credit card payments ranged from 0.36 per cent on payments made to

EnergyAustralia by Visa and MasterCard, to 1.95 per cent on payments made to Next Business

Energy by Amex.

49 Energy Locals, 'How can I pay my bill?'.

https://help.energylocals.com.au/prices-and-billing/how-can-i-pay-my-bill


104

Paper bill processing fees ranged from Simply Energy's $1.65 fee to QEnergy's $2.75 fee.

AGL and Origin Energy both charged a $2 over the counter payment fee for payments made at

Australia Post.

Most of the payment processing fees were the same as in 2016–17, but notable exceptions were:

AGL and Powerdirect decreased their credit and debit card payment fees from 0.55 per cent

to 0.45 per cent.

Origin Energy increased its Visa/MasterCard fees from 0.37 per cent to 0.55 per cent.50

However, as was the case in 2016–17, retailers did not consistently identify the payment methods

available, or not available, on their residential flat rate market offers. This continued to make it

difficult to compare payment processing fees across offers and retailers.

Dishonour payment fees

Fees for dishonoured cheque payments ranged from $6.50 charged by AGL and Powerdirect to

$27.50 charged by ERM Power. Fees for dishonoured direct debit payments ranged from $2.30

charged by AGL and Powerdirect to $27.50 charged by ERM Power.

ERM Power's dishonour payment fees in 2016–17 ($27.50) were also the highest in the market at

that time. We note also that AGL and Powerdirect decreased their dishonour payment fees from

$10 and $12 respectively for cheques, and $3.50 and $5.00 for direct debit.51

Late payment fees

Late payment fees ranged from $12 levied by Amaysim Energy, Click Energy, EnergyAustralia and

Origin Energy, to $13 levied by Energy Locals.

Early termination fees

Two retailers, EnergyAustralia and Origin Energy, charged an early termination fee.

EnergyAustralia charged a $22 fee on six of its eight offers, and Origin Energy charged a $20 fee

on five of its seven offers.

Where early termination fees applied, they generally were attached to offers with relatively more

favourable discounts and/or other incentives and benefits, compared to other offers.

4.5 GST on fees

In our market monitoring report for 2016–17, we noted that for residential and small business

offers the reported GST treatment within some fee types was inconsistent or unclear between

retailers.52 We consider that these observations also apply to generally available market offers

for 2017–18. For example:

Most retailers reported late payment fees as being exempt from GST, but Origin Energy

reported these fees as including GST.

Some retailers stated that GST was included in paper bill fees, but others did not state

whether or not GST applied to their fee.

In many instances, the GST status of fees was simply not stated by the retailer.

50 See QCA 2017b, section 4.4.2 (Table 40). 51 See QCA 2017b, section 4.4.2 (Table 41). 52 QCA 2017b, section 4.5.


105

4.6 Fees that 'may' have applied

In terms of fees that retailers identified 'may' have applied on some residential and small business

offers, we appreciate that there may be circumstances in which the fees may not apply, but have

included them in the analysis on the assumption that customers should consider the potential to

be charged these fees when comparing offers.

4.7 Additional fee information on Energy Made Easy

Some retailers included information on their offers on Energy Made Easy referring to the

potential for retail fees—other than those listed on Energy Made Easy—to be levied on

customers. Most retailers referred customers to their website for additional information on fees

and charges that may have applied.

In our 2016–17 report we argued that all retailers should clearly identify on Energy Made Easy

where customers can obtain information on additional retail fees and charges that apply, or may

apply, to their offers.53 We consider that our observations also apply to generally available market

offers for 2017–18. We again consider, as in 2016–17, that all retailers should clearly identify on

Energy Made Easy where customers can obtain information on additional retail fees and charges

that apply, or may apply, to their offers.54

4.8 Conclusion

The key points of our comparison and assessment of retail fees and charges for 2017–18 are

summarised below.

53 QCA 2017b, section 4.7. 54 We also note that the Energy and Water Ombudsman of New South Wales (EWON), in its submission to the

AER's review of its retail pricing information guidelines, raised similar concerns with respect to retailers' fees and charges on Energy Made Easy. We agree with EWON's view that it is difficult to compare and contrast fees on Energy Made Easy. See EWON 2017, page 2 and QCA 2018b, section 2.3.1.


106


Most retailers who published residential and/or small business market offers attached retail fees to at least some of their offers.

Alinta Energy, Mojo Power, Powershop and Red Energy did not attach retail fees to any of their residential market offers in the June quarter.

Alinta Energy, Lumo Energy, Powershop and Red Energy did not attach retail fees to any of their small business market offers in the June quarter.

The types of retail fees attached to market offers in the June quarter were credit and debit card payment fees, payment processing fees on payments made by direct debit or over the counter (at Australia Post), paper bill fees, dishonoured cheque fees, late payment fees and early termination fees.

For most fee types, the range of the charges was narrow and charges were similar as in the June quarter of 2017.

Retailers did not consistently identify on Energy Made Easy which payment methods they accepted. This made it difficult to compare payment processing fees across offers and retailers.

Retailers did not always make it clear if they included GST in a fee; also, some retailers stated that they included GST while other retailers did not make clear GST statements.

Some retailers included information on their offers on Energy Made Easy referring to the potential for retail fees—other than those listed on Energy Made Easy—to be levied on customers. We consider all retailers should clearly identify on Energy Made Easy where customers can obtain information on additional retail fees and charges that apply, or may apply, to their offers.

Queensland Competition Authority Price trends

107

5 PRICE TRENDS

This chapter reports on the trends in retailers' standing offer and generally available market offer

bills from 2015–16 to 2017–18. For each of the most common tariffs and tariff combinations for

small customers, standing offer bills have increased more than market offer bills during this time

period. Our analysis also revealed that the difference between the average lowest and the average

highest market offer bills has increased, in particular since 2016–17. The largest bill increases

usually took place in the September quarter. We note that in the last three quarters of 2017–18,

the average lowest offer bills decreased for each of the three residential customer tariffs and tariff

combinations.


Section 2(e) of the Direction requires the market monitoring report to include a comparison and

assessment of any trends in relation to retailers' standing offer bills and generally available

market offer bills between 2015–16 and 2017–18.

The Minister's covering letter to the Direction states that, should information become available

that would allow the QCA to include an average bill weighted by retailer market share, by contract

type, this should also be included in the annual market monitoring report.

5.2 Data availability

When we finalised our initial report in November 2018, the data to calculate average bills

weighted by retailer market share and by contract type was unavailable. The AER had removed

all retail performance data from its website in September 2018 after discovering what it described

as 'significant errors' in the data provided by AGL. Due to AGL's retail market share, the errors

impacted on many of the AER's reporting metrics over the financial year 2017–18.55

The AER published a retail energy market performance update in late January 2019, which

included data since the first quarter of 2017–18. As we required more data to calculate average

bills weighted by retailer market share, we requested the (unpublished) retail statistics data for

Queensland since the first quarter of 2015–16 directly from the AER. The data we received

provides, by retailer and by quarter, the total number of residential and small business customers

and the respective number of customers on market contracts.

5.3 QCA methodology

This updated report provides a simple average analysis of bills, consistent with the methodology

used in our 2016–17 and initial 2017–18 reports, as well as an analysis based on average bills

weighted by retailer market share.

By weighting the averages by retailer market share, the averages are different to the (simple)

averages presented in Chapter 2 of this report and our 2016–17 market monitoring report (for

2015–16 and 2016–17).

Some retailers have relatively high market shares. The offers of these retailers have a strong

influence on the weighted average bill. For example, in the first quarter of 2015–16, the combined

residential customer standing offer market share of AGL and Origin Energy was 96.5 per cent

55 AER 2018b.


108

(based on the total number of standing offer customers of the retailers who had offers published

in that quarter). This means that the weighted average standing offer bill almost exclusively

reflects the bills based on the standing offers of AGL and Origin Energy.

The AER's retail statistics contain the number of 'residential customers' and 'small business

customers', by retailer and by quarter, split up into total customer numbers and the number of

customers on market contracts. However, the AER statistics do not provide information on the

number of customers by tariff type. This means that the number of residential customers includes

customers on flat rate, controlled load and time of use tariffs. The same applies to the number of

small business customers.

In our view, the total number of market contract customers does not provide a sound basis to

calculate a market share for controlled load or time of use tariff customers, given their relatively

lower share among market contract customers. For this reason, we present weighted bill trend

analysis for flat rate residential and small business tariffs only.

Finally, we note that the number of customers contracted to retailers may not equate to the

number of customers contracted to the particular offer(s) that retailers have on Energy Made

Easy in any given quarter. For example, a retailer may have 2,000 market contract customers in a

particular quarter, but no offers available on Energy Made Easy; in this case, we apply a zero per

cent market share to the retailer's average bill even though the retailer does have customers. For

this reason, the weighted bills should only be interpreted as a proxy for the uptake of those offers.

5.4 QCA monitoring


Simple average

The table and figure below show the average standing offer, the average market offer, and the

averages of retailers' lowest and highest market offers for all quarters in each year from 2015–16

to 2017–18 based on simple averages.

Table 54 Bills for a typical residential flat rate customer, 2015–16 to 2017–18 (simple average)

Quarter Average standing offer ($)


Average lowest market offer ($)

Average highest market offer ($)

September 2015 1,442 1,388 1,329 1,445

December 2015 1,442 1,384 1,345 1,424

March 2016 1,446 1,366 1,342 1,395

June 2016 1,446 1,362 1,333 1,399

September 2016 1,565 1,408 1,365 1,453

December 2016 1,551 1,406 1,370 1,442

March 2017 1,548 1,399 1,364 1,431

June 2017 1,548 1,420 1,381 1,453

September 2017 1,616 1,468 1,396 1,532

December 2017 1,621 1,449 1,381 1,522

March 2018 1,617 1,438 1,360 1,524


109





June 2018 1,626 1,420 1,348 1,522


Figure 26 Bills for a typical residential flat rate customer, 2015–16 to 2017–18 (simple average)


QCA assessment

Between September 2015 and June 2018, the simple average residential flat rate standing offer

increased by 12.7 per cent ($1,442 to $1,626), and the simple average low market offer increased

by 1.4 per cent ($1,329 to $1,348).

The change in the average bills between September 2017 and June 2018 quarters, based on

simple averages, was:

0.6 per cent (from $1,616 to $1,626) for the average standing offer

–3.2 per cent (from $1,468 to $1,420) for the average market offer

–3.5 per cent (from $1,396 to $1,348) for the average lowest market offer

–0.6 per cent (from $1,532 to $1,522) for the average highest market offer.

The analysis shows that bills have generally increased in the September quarter each year, and

that in 2017–18 the lowest market offers decreased after Alinta Energy entered the market, but

standing offers remained stable.

Weighted average

The table and figure below show the average standing offer and the average market offer for all

quarters in each year from 2015–16 to 2017–18 weighted by retailer market share.

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018

Ave standing offer Ave mkt offer Ave lowest mkt offer Ave highest mkt offer


110

Table 55 Bills for a typical residential flat rate customer, 2015–16 to 2017–18 (weighted average)

Quarter Average standing offer ($) Average market offer ($)

September 2015 1,446 1,365

December 2015 1,446 1,370

March 2016 1,446 1,355

June 2016 1,446 1,364

September 2016 1,489 1,401

December 2016 1,490 1,406

March 2017 1,490 1,400

June 2017 1,490 1,406

September 2017 1,558 1,469

December 2017 1,557 1,438

March 2018 1,557 1,393

June 2018 1,558 1,388

Sources: Energy Made Easy; AER retail statistics; QCA analysis.

Figure 27 Bills for a typical residential flat rate customer, 2015–16 to 2017–18 (weighted average)


QCA assessment

Between September 2015 and June 2018, the weighted average residential flat rate standing

offer increased by 7.7 per cent ($1,446 to $1,558), while the weighted average residential flat

rate market offer increased by 1.7 per cent ($1,365 to $1,388).

Between September 2017 and June 2018, the weighted average residential flat rate standing

offer remained constant ($1,558), while the weighted average residential flat rate market offer

decreased by 5.5 per cent ($1,469 to $1,388).

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018

Ave standing offer Ave mkt offer


111

The analysis shows that the average weighted market offers decreased after Alinta Energy

entered the market in August 2017. It is also worth noting that over the September 2015 to June

2018 period, the increase in the weighted average residential flat rate standing and market offers

was substantially less than the increase in the simple average offers.

5.4.2 Residential flat rate with controlled load super economy offers


averages of retailers' lowest and highest market offers for the quarters in each year from 2015–

16 to 2017–18.

Table 56 Bills for a typical flat rate with controlled load super economy customer, 2015–16 to 2017–18





September 2015 1,771 1,670 1,600 1,738

December 2015 1,769 1,661 1,614 1,710

March 2016 1,772 1,639 1,609 1,674

June 2016 1,772 1,640 1,604 1,686

September 2016 1,869 1,724 1,670 1,778

December 2016 1,863 1,737 1,694 1,781

March 2017 1,866 1,733 1,692 1,770

June 2017 1,866 1,761 1,719 1,802

September 2017 2,021 1,852 1,756 1,943

December 2017 2,043 1,822 1,743 1,908

March 2018 2,034 1,808 1,706 1,920

June 2018 2,046 1,790 1,690 1,918



112

Figure 28 Bills for a typical residential flat rate with controlled load super economy customer, 2015–16 to 2017–18


QCA assessment

Between September 2015 and June 2018, the average standing offer for this tariff combination

increased by 15.5 per cent ($1,771 to $2,046), and the average market offer increased by 7.1 per

cent ($1,670 to $1,790).

The change in the average bills between September 2017 and June 2018 quarters was:





The analysis of average bills shows that bills have generally increased in the September quarter

each year, and that in 2017–18 the lowest market offers decreased after Alinta Energy entered

the market, but standing offers remained stable.

5.4.3 Residential flat rate with controlled load economy offers



16 to 2017–18.

Table 57 Bills for a typical flat rate with controlled load economy customer, 2015–16 to 2017–18





September 2015 1,759 1,658 1,590 1,727

December 2015 1,756 1,641 1,582 1,701

March 2016 1,760 1,631 1,601 1,666

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018



113





June 2016 1,760 1,629 1,594 1,675

September 2016 1,829 1,683 1,632 1,735

December 2016 1,822 1,689 1,648 1,731

March 2017 1,822 1,684 1,645 1,720

June 2017 1,822 1,707 1,666 1,747

September 2017 1,957 1,781 1,692 1,863

December 2017 1,972 1,754 1,678 1,836

March 2018 1,963 1,740 1,642 1,847

June 2018 1,975 1,723 1,627 1,845


Figure 29 Bills for a typical residential flat rate with controlled load economy customer, 2015–16 to 2017–18


QCA assessment

Between September 2015 and June 2018, the average standing offer for this tariff combination

increased by 12.3 per cent ($1,759 to $1,975), and the average market offer increased by 3.9 per

cent ($1,658 to $1,723).






$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

Sept2015

Dec2015

March2016

June2016

Sept2016

Dec2016

March2017

June2017

Sept2017

Dec2017

March2018

June2018



114

The analysis of average bills shows that bills have generally increased in the September quarter

each year, and that in 2017–18 the lowest market offers decreased after Alinta Energy entered

the market, but standing offers remained stable.


Simple average



16 to 2017–18 based on simple averages.

Table 58 Bills for a typical small business flat rate customer, 2015–16 to 2017–18 (simple average)





September 2015 2,141 2,034 1,951 2,118

December 2015 2,141 2,021 1,964 2,084

March 2016 2,142 2,022 1,977 2,074

June 2016 2,142 2,033 2,000 2,078

September 2016 2,478 2,219 2,197 2,247

December 2016 2,468 2,228 2,210 2,248

March 2017 2,475 2,233 2,215 2,255

June 2017 2,500 2,271 2,247 2,295

September 2017 2,529 2,236 2,160 2,305

December 2017 2,545 2,256 2,201 2,317

March 2018 2,539 2,246 2,188 2,312

June 2018 2,555 2,223 2,172 2,302



115

Figure 30 Bills for a typical small business flat rate customer, 2015–16 to 2017–18 (simple average)


QCA assessment

Between September 2015 and June 2018, the simple average small business flat rate standing

offer increased by 19.4 per cent ($2,141 to $2,555), and the simple average low market offer

increased by 11.3 per cent ($1,951 to $2,172).

The change in the average bills between September 2017 and June 2018 quarters, based on

simple averages, was:

1 per cent (from $2,529 to $2,555) for the average standing offer


0.6 per cent (from $2,160 to $2,172) for the average lowest market offer


The analysis shows that bills increased significantly in the September quarter of 2016 but have

generally remained stable since then.

Weighted average

The table and figure below show the average standing offer and the average market offer for all

quarters in each year from 2015–16 to 2017–18 weighted by retailer market share.

Table 59 Bills for a typical small business flat rate customer, 2015–16 to 2017–18 (weighted average)


September 2015 2,146 1,997

December 2015 2,146 1,983

March 2016 2,146 1,989

June 2016 2,146 2,006

September 2016 2,392 2,217

$1,800

$2,000

$2,200

$2,400

$2,600

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018



116


December 2016 2,392 2,214

March 2017 2,392 2,213

June 2017 2,404 2,206

September 2017 2,486 2,267

December 2017 2,485 2,259

March 2018 2,484 2,256

June 2018 2,495 2,238


Figure 31 Bills for a typical small business flat rate customer, 2015–16 to 2017–18 (weighted average)


QCA assessment

Between September 2015 and June 2018, the weighted average small business flat rate standing

offer increased by 16.3 per cent ($2,146 to $2,495), and the weighted average small business flat

rate market offer increased by 12.1 per cent ($1,997 to $2,238).

Between September 2017 and June 2018, the weighted average small business flat rate standing

offer increased by 0.4 per cent (from $2,486 to $2,495), while the weighted average small

business flat rate market offer decreased by 1.3 per cent (from $2,267 to $2,238).

The analysis shows that the average weighted small business flat rate standing offers increased

less from September 2015 to June 2018 than the simple average offers. However, the weighted

average market offers increased more over the same time than the simple average offers.

5.4.5 Small business time of use offers



16 to 2017–18.

$1,800

$2,000

$2,200

$2,400

$2,600

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018

Ave standing offer Ave mkt offer


117

Table 60 Bills for a typical small business time of use customer, 2015–16 to 2017–18





September 2015 5,700 5,405 5,173 5,631

December 2015 5,701 5,338 5,175 5,576

March 2016 5,703 5,366 5,269 5,491

June 2016 5,703 5,416 5,347 5,518

September 2016 6,895 6,042 5,940 6,146

December 2016 6,853 6,086 6,010 6,161

March 2017 6,779 6,094 6,039 6,165

June 2017 6,856 6,243 6,182 6,316

September 2017 7,305 6,397 6,179 6,626

December 2017 7,326 6,408 6,247 6,647

March 2018 7,499 6,473 6,291 6,673

June 2018 7,545 6,391 6,215 6,644


Figure 32 Bills for a typical small business time of use customer, 2015–16 to 2017–18


QCA assessment

Between September 2015 and June 2018, the average small business time of use standing offer

increased by 32.4 per cent ($5,700 to $7,545), and the average low market offer increased by

20.1 per cent ($5,173 to $6,215).



$5,000

$5,400

$5,800

$6,200

$6,600

$7,000

$7,400

$7,800

Sep2015

Dec2015

Mar2016

Jun2016

Sep2016

Dec2016

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018

Ave standing offer Ave mkt offer Ave low mkt offer Ave high mkt offer


118


0.6 per cent (from $6,178 to $6,215) for the average lowest market offer

0.3 per cent (from $6,626 to $6,644) for the average highest market offer.

The analysis of average bills shows that bills increased significantly in the September quarter of

2016 and 2017 but have generally remained stable since then.

5.5 Conclusion

The key points of our comparison and assessment of trends in prices over 2015–16 to 2017–18

are summarised below.


The bill analysis shows the following:

Residential flat rate bills have generally increased in the September quarter each year; in 2017–18 the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable.

Residential flat rate with controlled load super economy bills have generally increased in the September quarter each year; in 2017–18 the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable.

Residential flat rate with controlled load economy bills generally increased in the September quarter each year; in 2017–18 the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable.

Small business flat rate bills increased significantly in the September quarter of 2016 but have generally remained stable since then.

Small business time of use bills increased significantly in the September quarter of 2016 and 2017 but have generally remained stable since then.

Queensland Competition Authority Switching to market offers

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6 SWITCHING TO MARKET OFFERS

This chapter compares and assesses the number of customers moving from standing offers to

market offers with their retailer in 2017–18, and provides information on the characteristics of

those customers. Our analysis reveals that the number of switching customers has increased

significantly since 2016–17, with the largest proportion of switching customers in the west of the

SEQ region. We found that residential and small business customers with lower levels of

consumption have switched in higher proportions compared to 2016–17. Nearly half of the

number of residential customers who switched participated in a hardship program, received the

electricity rebate or received HEEAS support (or a combination of all three).

6.1 Background

6.1.1 Standing and market offers—terms and prices

As explained in Chapter 2, standing offers are basic offers with terms and conditions that are

specified in the NERR.56 Market offers contain a minimum set of terms and conditions (specified

in the NERR57) and can include other terms and conditions agreed between the retailer and

customer. Compared to market offers, standing offers provide preferential terms and conditions

to customers.58

The ACCC, in its final report of the inquiry into retail electricity pricing, acknowledged that 'the

operating costs arising from the consumer protections in the standard retail contract may make

it higher cost than market offers'. However, the ACCC concluded that it did not consider

'requirements such as paper billing and minimum payment period notices fully explain the price

difference' between standing and market offers, which 'can amount to several hundred dollars

per consumer each year'.59

Although we do not have access to the retail cost data that the ACCC used to inform its report

and recommendations, we generally consider that the difference between standing and market

offer prices is not justified solely by the difference in terms and conditions.60 Further, we

understand that some retailers do not actively compete for standing offer customers, and set

their standing offer prices sufficiently higher than other retailers' prices to discourage customers

from contracting to their standing offer.

The ACCC also analysed the source of retailer margins and found that the average revenue for

standing offer customers was 'significantly higher than average revenue for market offer

customers'. Further, the ACCC reported that approximately 38 per cent of the revenue earnt by

AGL, EnergyAustralia and Origin Energy in SEQ came from standing offer customers, compared to

5 per cent for smaller retailers.61

56 National Energy Retail Rules, rule 12 and schedule 1. 57 National Energy Retail Rules, rule 14. 58 QCA 2018a, section 6.1.3. 59 ACCC 2018b, section 12.1.1. The ACCC recommended that the standing offer and standard retail contract be

abolished in non-price regulated jurisdictions (recommendation 30). 60 Chapter 2 of this report shows the difference between standing and market offer prices in SEQ. See ACCC

2018b, chapter 10, for information on retailers' operating and customer acquisition and retention costs. 61 ACCC 2018b, section 12.1.1.


120

6.1.2 QCA market monitoring 2016–17

In our market monitoring report for 2016–17, we stated that it would be difficult for stakeholders

to draw conclusions about the state of competition based on the number of standing offer

customers who switch to a market offer with their retailer. This was because the measure did not

capture data on customers switching to market offers with a new retailer, or those customers

who prefer to remain on standing offers.62

We reported that, in 2016–17, around 27,000 (or 1.8 per cent) out of 1.52 million small SEQ

electricity customers switched from a standing offer to a market offer with their retailer. These

figures excluded EnergyAustralia who did not provide data on its switching customers. We also

stated that, as the AER had stated that about 70 per cent of customers in SEQ were on market

contracts, the total number of customers switching from standing offers represented around 6

per cent of the number of customers on standing offers.63

6.1.3 New AER retailer performance reporting framework

In April 2018, the AER issued new reporting procedures and guidelines for retailers to provide

performance information to the AER.64 The AER explained that its review of the procedures and

guidelines followed 'growing concerns about energy affordability and hardship issues, the

introduction of metering contestability and an increased desire for transparency over what is

happening in the market'.65 The new guidelines commenced on 1 January 2019, and retailers

must submit their first quarter of data (for the period 1 January to 31 March 2019) to the AER by

30 April 2019.66

The new guidelines incorporate a range of new retail market performance measures, one of

which requires retailers to report on the number of residential and small business customers who

move from a standing offer to a market offer each quarter.67 The AER stated that this new

indicator would:

provide further transparency around consumer engagement with their electricity contract

provide insight into the number of consumers seeking better offers without switching

retailer.68


Section 2(f) of the Direction requires the market monitoring report to include:

a comparison and assessment of the number of customers who moved from a standing offer

to a market offer with their retailer in 2017–18, and

information on the following characteristics of those customers:

their location

62 QCA 2017b, section 6.1. 63 QCA 2017b, section 6.6. 64 AER 2018c. For more information on the AER's retail performance reporting framework, see the AER website. 65 AER 2018d, section 1.4. 66 AER 2018d, section 2.1. 67 AER 2018c, schedule 2 (indicator S2.2). The final version of the guidelines also includes an indicator (S2.3)

that requires retailers to report on the number of residential and small business customers who move from a market to a standing contract each quarter.

68 AER 2017a, section 3.2 (Table 2).

https://www.aer.gov.au/retail-markets/performance-reporting


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their electricity consumption

whether they were participating in a retailer hardship program, receiving the Queensland

Government's electricity rebate (the rebate) or receiving support via HEEAS

whether they had electricity debt.

6.3 QCA methodology

In May 2018, we issued all retailers with offers in SEQ in 2017–18 with an information notice

(under section 89C of the Electricity Act) to inform our analysis.

6.3.1 Switching (location)

Section 2(f)(i) of the Direction requires the QCA to report on the location of customers who

switched from a standing offer to a market offer with their retailer during 2017–18. The Direction

does not define 'location' or the level of detail the QCA should include on location in its report.

In the 2016–17 market monitoring report, we presented data for the postcodes with the highest

switching rates in the main report and data for all postcodes in an appendix. We also presented

the data on a map and provided commentary on notable geographical patterns.69 This

methodology has been continued for 2017–18.

6.3.2 Switching (consumption)

Section 2(f)(ii) of the Direction requires the QCA to report on the electricity consumption of

customers switching from standing offers to market offers with their retailer during 2017–18.

In the 2016–17 market monitoring report, we reported the number of switching customers in 500

kilowatt hour bands (residential), 1,000 kilowatt hour bands (small business flat) and 2,000

kilowatt hour bands (small business time of use). Consumption was annualised using the number

of days to which the consumption data applied.70 This methodology has been continued for 2017–

18.

6.3.3 Switching (hardship, rebate and HEEAS)

Section 2(f)(iii) of the Direction requires the QCA to report on the number of customers switching

from standing offers to market offers with their retailer who were participating in a retailer

hardship program, receiving the rebate or receiving support via the HEEAS. We were not asked

to report on customers receiving support via the HEEAS in 2016–17.

Hardship programs are formal assistance programs that aim to provide assistance to residential

customers experiencing financial difficulty. Retailers must implement a customer hardship policy

that aims to identify residential customers experiencing payment difficulties due to hardship and

to assist those customers to better manage their energy bills on an ongoing basis. These policies

must be approved by the AER.71

The rebate is available to people who have any of the following:

a Pensioner Concession Card issued by either Centrelink or the Department of Veterans'

Affairs

69 QCA 2017b, section 6.6.1 (Table 49) and Appendix F. 70 QCA 2017b, section 6.6.2 (Figures 32–34). 71 See the National Energy Retail Law, section 43 and the AER's customer hardship policies webpage.

https://www.aer.gov.au/retail-markets/energy-retailers-customer-hardship-policies


122

a Department of Veterans' Affairs Gold Card (and recipient of the War Widow Pension or

special rate totally and permanently incapacitated (TPI) pension)

a Queensland Government Seniors Card

Commonwealth Health Care Card

asylum seeker status.72

HEEAS assists customers with their electricity bills during financial emergencies. Applicants must

meet certain criteria relating to their immediate capacity to pay an energy bill and may only

receive HEEAS, of up to $720, once every two years.73

In the 2016–17 market monitoring report, we reported the number of switching customers who

were in a hardship program, received the rebate, or both, and the proportion each contributed

to the total number of residential switching customers.74

6.3.4 Switching (debt)

Section 2(f)(iv) of the Direction requires the QCA to report on the number of customers switching

from standing offers to market offers with their retailer that had an electricity debt. The Direction

does not define the term 'electricity debt'. In the 2016–17 market monitoring report, we defined

electricity debt as 'an amount owed to a retailer that has been outstanding for 90 days or more',

consistent with the AER definition.75 This methodology has been continued for 2017–18.

6.4 QCA monitoring

The table below summarises the switching data for residential and small business customers.

Table 61 Customers switching from standing to market offers, 2017–18

Small customer type Number of switching customers

Total customers Proportion of customers switching (%)

Residential 64,204 1,473,974 4.4

Small business 4,434 127,013 3.5

Total 68,638 1,600,987 4.3

Source: Retailers' responses to the QCA's information notice (unpublished).

The overall switching rate is approximately 4.3 per cent of 1.6 million customers, which is a

significant increase on the 2016–17 switching rate (1.8 per cent).

In its 2016–17 annual performance report, the AER stated that 78 per cent of residential

customers in SEQ were on market contracts.76 Based on this proportion, around 20 per cent of

residential customers on standing offers switched to a market contract with their retailer. Similar

to the rate compared to total customer numbers, this has increased significantly from

approximately 6 per cent in 2016–17.77

72 More information can be found on the Queensland Government's electricity and gas rebates website. 73 Queensland Government HEEAS website. 74 QCA 2017b, section 6.6.3 (Table 50). 75 QCA 2017b, section 6.6.4 (Table 51). 76 AER 2017b, Key Findings 2016–17 (page 9). 77 QCA 2017b, section 6.6.

https://www.qld.gov.au/community/cost-of-living-support/concessions/energy-concessions/electricity-gas-rebates#Eligibility

https://www.qld.gov.au/community/cost-of-living-support/concessions/energy-concessions/home-energy-emergency-assistance-scheme


123

6.4.1 Switching customers' location

The postcodes with the highest proportion of customers switching in 2017–18 are presented

below. A full list of postcodes and number of switching customers are presented in Appendix C.

Table 62 Top SEQ postcodes for customer switching from standing to market offers, 2017–18

Postcode Postcode location(s) Local Government Area Proportion of switching customers (%)

4155 Chandler Brisbane 9.46

4270 Tamborine Logan, Scenic Rim 9.24

4352

Cawdor, Cement Mills, Branchview, Cabarlah, Birnam, Blanchview, Ballard, Bapume, Evergreen, Fifteen Mile, Djuan, Doctor Creek, Cutella, Derrymore, Coalbank, Condamine Plains, Grapetree, Hampton, Groomsville, Glencoe, Geham, Gowrie Junction, Gore, Kulpi, Kleinton, Lilyvale, Kurrowah, Highgrove, Highfields, Karara, Hodgson Vale, Merrits Creek, Mount Luke, Muniganeen, Murphys Creek, Macglagan, Meringandan, Toowoomba

Goondiwindi, Lockyer Valley, Southern Down, Toowoomba

9.17

4344 Flagstone Creek, Carpendale, Egypt, Iredale, Lilydle, Helidon, Seventeen Mile, Stockyard, Lockyer, Rockmount

Lockyer Valley 8.63

4346 Marburg Ipswich, Somerset 8.27

4517 Beerburrum Sunshine Coast 8.23

4228 Tallebudgera Gold Coast 8.20

Note: Location data provided by retailers includes customers on all residential and small business customer tariffs and tariff combinations.

Sources: Retailers' responses to the QCA's information notice (unpublished); Australia Post website (http://auspost.com.au/postcode/); Electoral Commission Queensland, 2018.

http://auspost.com.au/postcode/


124

Figure 33 Map of customers switching from standing to market offers in SEQ

The heat map below illustrates the distribution of switching customers in the SEQ region.

QCA assessment

Similar to 2016–17, the bulk of switching customers were reported by Origin Energy and AGL

(2017–18: 97 per cent; 2016–17: 99 per cent). This is because these retailers have the most

customers on standing offers.

Electricity prices and customers' ability to navigate the market and find the best deals received

significant political and media attention during 2017–18. In August 2017, the Australian

Government met twice with executives from seven electricity retailers, resulting in retailers

agreeing to write to all customers to notify them about cheaper options available and make them

aware of the Energy Made Easy comparison website.78 These actions by retailers and the high

level of media attention on retail electricity markets is likely to have contributed to the increased

switching rate.

We also note that, in June 2018, the Australian Government proposed a rule change to the AEMC

that would require retailers to periodically contact customers who are on standing offers and

provide information regarding other contractual options. The AEMC has not yet initiated

78 See ACCC 2018b, section 11.1 for more information on these meetings.


125

consultation on the proposal, however if the proposal is implemented we may see relatively high

rates of engagement and switching continue in future.79

6.4.2 Switching customers' electricity consumption

The figure below shows the number of residential customers, by consumption band, who

switched from standing offers to market offers with their retailer in 2017–18.

Figure 34 Residential switching by consumption level, 2017–18


The figures below show the number of small business flat rate and time of use customers, by

consumption band, who switched from standing offers to market offers with their retailer in

2017–18.

Figure 35 Small business flat rate switching by consumption level, 2017–18


79 For more information on the proposed rule change, see the AEMC website.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Nu

mb

er o

f cu

sto

mer

s

Consumption level (annualised kWh)

Residential flat rate Residential flat rate - controlled load super economy Residential flat rate - controlled load economy

0

50

100

150

200

250

300

350

400

450

Nu

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https://www.aemc.gov.au/rule-changes/long-term-standing-offer-notice


126

Figure 36 Small business time of use switching by consumption level, 2017–18


QCA assessment

The distribution of residential switching customers in 2017–18 is skewed more to lower levels of

consumption compared to 2016–17. In 2017–18, 42 per cent of switching customers'

consumption is below the flat rate tariff median of 4,059 kilowatt hours (see Table 2), compared

to 30 per cent in 2016–17. This may reflect that lower consumption customers have been less

likely to switch in the past but were prompted to switch by the retailers' notifications discussed

in the previous section.

Similar to residential customers, while small business customers across all consumption levels

switched to market offers in 2017–18, the customers with the highest switching rates were those

in the lower consumption bands. The proportion of switching customers whose consumption was

below the median increased from 58 per cent in 2016–17 to 69 per cent in 2017–18 for flat rate

tariff customers and from 70 per cent to 79 per cent for time of use tariff customers.

It should be noted that the methodology of annualising and reallocating consumption to an

annual consumption band may impact the accuracy of the consumption data; however, we do

not consider this would materially change the outcome.

In 2016–17, we observed that customers with higher consumption were switching more than

customers with lower consumption and that this may be expected due to the higher savings that

those customers could achieve. The market may have reached a point where those who could

achieve the most savings, being those with higher consumption, have already switched, leaving

the pool of customers remaining on standing offers tending to have relatively lower consumption

compared to the general population. This would result in the downward trend of switching

customers' consumption we have observed in 2017–18.

0

20

40

60

80

100

120

140

160N

um

ber

of

cust

om

ers



127

6.4.3 Switching customers in a retailer hardship program, and/or receiving the rebate and/or receiving HEEAS support

The table below outlines the number of switching customers who were in a hardship program,

received the electricity rebate, or HEEAS support, and the proportion each contributes to the

total number of residential switching customers.

We note that AGL stated that it was unable to provide the customer numbers at the time of

switching, so has provided the numbers based on whether the switching customer was in one of

these categories at any point during 2017–18.80 Therefore, the numbers may be slightly over- or

under-stated based on the precise data definition.

Table 63 Switching customers in a hardship program, and/or receiving the rebate and/or receiving HEEAS support, 2017–18

Category of switching customers Number of switching customers

Proportion of total switching residential

customers (%)

Customers in a hardship program only 1,141 1.8

Customers receiving the rebate only 26,397 41.1

Customers receiving HEEAS support only 96 0.1

Customers in a hardship program and receiving the rebate

1,035 1.6

Customers in a hardship program and receiving HEEAS support

93 0.1

Customers receiving the rebate and HEEAS support

158 0.2

Customers in a hardship program, receiving the rebate and HEEAS support

147 0.2


In line with the number of overall switching customers, the majority of switching customers in a

hardship program, and/or receiving the rebate, and/or receiving HEEAS support were reported

by AGL and Origin Energy (99.2 per cent of the customer numbers above).

QCA assessment

The number of switching customers that were participating in a hardship program, receiving the

rebate, receiving HEEAS support, or any combination of the three, represented 45 per cent of

residential switching customers. At 1.8 per cent, the proportion of switching hardship customers

was slightly higher than the total proportion of hardship customers in Queensland of 1.02 per

cent, reported by the AER as at 30 June 2017.81 However, this is a significant reduction compared

to 2016–17 where 4.9 per cent of switching customers were in a hardship program.

The proportion of switching rebate customers in SEQ (41.1 per cent) was considerably higher than

the total proportion of customers receiving the rebate in Queensland of 29 per cent82, and is also

higher than the previous year of 39 per cent.

80 AGL 2018, response to the QCA's information notice (unpublished). 81 AER 2017b, Key Findings 2016–17 (page 10). 82 AER 2017b, section 2.7.


128

6.4.4 Switching customers with an electricity debt

Few retailers reported any switching customers having a debt for 90 days or more at the time of

switching. We note that AGL was unable to provide data based on the debt at the time of

switching, resulting in its numbers being based on customers who switched in 2017–18 and had

an outstanding debt of 90 days as at the end of August 2018.

The table below shows the number of customers with an outstanding electricity debt at the time

of switching.

Table 64 Residential customers with an outstanding electricity debt at the time of switching, 2017–18

Retailer Number of customers with an electricity debt at the time of switching

1st Energy 0

AGL 328

Alinta Energy 0

Click Energy 1

Diamond Energy 0

Dodo Power & Gas 0

EnergyAustralia 9

Energy Locals 0

ERM Power 0

Lumo Energy 0

Mojo Power 0

Momentum Energy 0

Next Business Energy 0

Origin Energy 7,552

People Energy 0

Powershop 0

QEnergy 12

Red Energy 5

Sanctuary Energy 0

Simply Energy 0

Total 7,907

Notes: For the purpose of this assessment, an electricity debt at the time of switching is defined as customers with an electricity debt outstanding for 90 or more (calendar) days. AGL and Powerdirect submitted a combined response and we have reported this data in the name of AGL. Amaysim Energy and Click Energy submitted a combined response and we have reported this data in the name of Click Energy.


There has been a significant increase in the number of customers with an outstanding electricity

debt at the time of switching since 2016–17, driven by the number of Origin Energy customers

increasing from 1,758 to 7,552. This increase is consistent with Origin Energy's overall increase in


129

switching customers. The switching customers with a debt comprise 12.3 per cent of the total

switching customers, an increase from 7 per cent in 2016–17.

6.5 Conclusion

The box below summarises our commentary on customers switching from standing offers to

market offers with their retailer in 2017–18.

Comment

Whilst the number of switching customers have increased significantly, the location with the largest proportion of switching customers in 2017–18 was similar to that 2016–17, dispersed mainly across the west of the SEQ region. This may be due to the customers in other areas of SEQ having already switched to and remained on market offers since deregulation, or retailers focussing their marketing efforts more in the western areas. There was an increase in the proportion of switching customers in south east Brisbane suburbs in 2017–18.

The number of customers switching from standing offers to market offers with their retailer in 2017–18 has increased significantly since 2016–17. Both residential and small business customers with lower levels of consumption have switched in higher proportions compared to 2016–17.

The number of switching customers participating in a hardship program, receiving an electricity rebate, receiving HEEAS support or a combination of all three, represented 45 per cent of the residential switching customers reported by retailers.

The proportion of total switching customers with an electricity debt increased from 7 per cent in 2016–17 to 12.3 per cent in 2017–18. This indicates that customers with electricity debt may be taking steps to attempt to limit the growth of that debt by taking up market offers and achieving savings on their bills.

Queensland Competition Authority Hardship, rebate and HEEAS customers

130

7 HARDSHIP, REBATE AND HEEAS CUSTOMERS

This chapter compares and assesses the prices paid by customers participating in a retailer

hardship program, receiving the electricity rebate or receiving support through the Home Energy

Emergency Assistance Scheme. Our analysis revealed that a high proportion of hardship, rebate

and HEEAS customers were on market contracts in 2017–18, but the overall share decreased

slightly compared to 2016–17.

7.1 Background

7.1.1 Standing and market offers

As explained in Chapters 2 and 6, standing offers are basic offers with terms and conditions that

are specified by the NERR.83 Market offers contain a minimum set of terms and conditions

(specified in the NERR84) and can include other terms and conditions agreed between the retailer

and customer. Compared to market offers, standing offers provide preferential terms and

conditions to customers.85

Although standing offers may suit customers who are experiencing financial hardship and/or

receiving support through the HEEAS, where customers can meet certain conditions of market

offers they may be better off under market offers.


In our market monitoring report for 2016–17, we reported that a high proportion of customers

on hardship programs and/or receiving the rebate were on market offers and that, on average,

hardship and rebate customers generally paid bills that were similar to the bills these customers

would pay on offers that were generally available in the market.86

7.1.3 New AER retailer performance reporting framework

As stated in Chapter 6, in April 2018, the AER issued new reporting procedures and guidelines for

retailers to provide performance information to the AER.87 The new guidelines incorporate a

range of new measures regarding customers participating in hardship programs. For instance, in

addition to (continuing to) report on the number of customers in their hardship programs,

retailers will be required to report on the type of contract (standing or market) each hardship

customer is on.88 The AER stated that this information would provide detail regarding whether

retailers are working with customers to find more attractive and beneficial rates, tariffs, and

terms and conditions that suit their circumstances (particularly in relation to affordability

concerns).89

83 National Energy Retail Rules, rule 12 and schedule 1. 84 National Energy Retail Rules, rule 14. 85 QCA 2018a, section 6.1.3. 86 QCA 2017b, sections 7.6.1 and 7.6.2. 87 AER 2018c. For more information on the AER's retail performance reporting framework, see the AER website. 88 AER 2018c, schedule 4 (indicator S4.2). 89 AER 2017a, section 3.6 (Table 6).

https://www.aer.gov.au/retail-markets/performance-reporting


131


Section 2(g) of the Direction requires the market monitoring report to include a comparison and

assessment of customers that were participating in a retailer hardship program or receiving an

energy concession or HEEAS support in 2017–18. The comparison and assessment is to cover:

the number of customers on standing offers and market offers

the standing offer and market offer prices they paid.

As we did for the market monitoring report for 2016–17, we interpret 'energy concession' in

section 2(g) of the Direction to have the same meaning as it does in section 2(f)(iii) of the

Direction; that is, customers receiving an energy concession are those receiving the rebate.90

7.3 QCA methodology

In May 2018, we issued all retailers with offers in SEQ in 2017–18 with an information notice

(under section 89C of the Electricity Act) to inform our analysis.

7.3.1 Number of customers on standing offers and market offers

Section 2(g)(i) of the Direction requires the QCA to report on the number of customers on

standing offers and market offers that were participating in a retailer hardship program, receiving

the rebate or receiving HEEAS support in 2017–18.

In the 2016–17 report, we reported the number of residential customers participating in a

hardship program, the number of customers receiving the rebate, and the number of customers

participating in combinations of those programs, on standing offers and market offers.91 This data

was obtained directly from retailers. This methodology has been continued for 2017–18, with the

addition of a new category of customers—those receiving HEEAS support.

7.3.2 Standing offer prices and market offer prices they paid

Section 2(g)(ii) of the Direction requires the QCA to report on the standing offer and market offer

prices paid by customers who participated in a retailer hardship program, received the rebate or

received HEEAS support in 2017–18.

In the 2016–17 report, we reported the weighted average annual bills for each category of

customers based on the corresponding typical consumption level. This data was obtained data

from retailers on the standing offer and market offer prices paid by hardship and concession

customers. This has been expanded to include HEEAS customers in 2017–18. We presented these

outcomes by retailer and in similar tables and graphs to those presented in Chapter 2 for typical

SEQ customers, to allow comparisons to be made. Bills were also aggregated into consumption

bands for each category and tariff combination and represented in charts to show the range of

bill outcomes and the distribution of customer numbers in each consumption band.92

90 QCA 2017b, section 7.3. 91 QCA 2017b, section 7.6.1 (Table 53). 92 QCA 2017b, section 7.6.2 (Tables 54–57; Figures 35–46).


132

7.4 QCA monitoring

We note the following with respect to retailers' responses to information notices for this section

of the direction notice:

AGL and Powerdirect submitted a combined response and we report this data in the name of

AGL.

Amaysim Energy and Click Energy submitted a combined response and we report this data in

the name of Click Energy.

Diamond Energy did not differentiate between the prices for market offers and standing

offers.

Momentum Energy, Next Business Energy and Powershop did not have any hardship, rebate

or HEEAS customers on standing offers.93

7.4.1 Number of customers on standing offers and market offers

The table below summarises the number of hardship, rebate and HEEAS customers on standing

offers and market offers.

Table 65 Hardship, rebate and HEEAS customers, by contract type, 2017–18

Number of customers on standing offers

Number of customers on market offers

Proportion of customers on market

offers (%)

Number of customers— hardship only

1,411 10,569 88.2

Number of customers—rebate only

112,775 311,989 73.4

Number of customers—HEEAS only

233 575 71.2

Number of customers—hardship and rebate

1,171 13,507 92.0

Number of customers—hardship and HEEAS

77 1,306 94.4

Number of customers—rebate and HEEAS

486 2,868 85.5

Number of customers—hardship, rebate and HEEAS

244 4,384 94.7

Total 116,397 345,198 74.8


93 Momentum Energy 2018, Next Business Energy 2018 and Powershop 2018, responses to the QCA's

information notice (unpublished).


133

In 2017–18, 75 per cent of hardship, rebate and HEEAS customers were on market offers. This is

similar to 2016–17, when the proportion of hardship and rebate customers on market offers was

77 per cent.94

Further, in 2016–17, the proportion of hardship and rebate customers on market offers (77 per

cent) was higher than the proportion of customers on market offers for the total residential

market (70 per cent). In 2017–18, the proportion of hardship, rebate and HEEAS customers on

market offers (75 per cent) was lower than the proportion of customers on market offers for the

total residential market (78 per cent).

The reduction from 77 per cent in 2016–17 to 75 per cent in 2017–18 is mainly driven by fewer

customers on market contracts receiving the rebate—the number has reduced from around

325,000 to around 312,000. The number of standing offer customers receiving the rebate has

increased from around 101,000 to around 113,000. While around 26,000 rebate customers

moved to market contracts during the year, the increase in standing offer rebate customers

indicates that there is a reasonable proportion moving back to standing offers from market offers.

This should be kept in mind when making conclusions regarding overall customer engagement

with the market.

We note that the total number of reported hardship-only customers has increased by 81 per cent

compared to 2016–17. We are unable to cross-reference this with numbers reported to the AER,

because the AER removed performance reporting statistics from its website due to concerns

about the validity of some of the data.95

QCA assessment

Customers who are on hardship programs appear to be engaging with the market, as evidenced

by the high proportion who were on market contracts in 2017–18, compared to the whole SEQ

residential market. It is possible that this reflects additional efforts made by retailers to assist

hardship customers, which may include helping them identify the best prices for their

circumstances. There has been an unexplained decrease in the reported number of concession

customers on market contracts.

7.4.2 Standing offer prices and market offer prices they paid

The following sections analyse annual standing offer and market offer bills paid by hardship,

rebate and HEEAS customers based on typical consumption for the main residential tariffs and

tariff combinations. In its final report of the inquiry into retail electricity pricing, the ACCC

recommended that the AER set a default price to replace retailer standing offers, with a

requirement that market offers reference this price when advertising discounts.96 A similar

recommendation was made by the Independent Review into the Electricity and Gas Retail

Markets in Victoria in August 2017, with the proposed 'basic service offer' to be administered by

94 In the 2016–17 market monitoring report, the percentage of rebate customers was reported as 79 per cent

rather than 76 per cent, and the overall percentage of hardship and rebate customers was reported as 79 per cent rather than 77 per cent. The error was due to our incorrect allocation of some of Origin Energy's customers on its Predictable Plan. The percentages of hardship customers and both hardship and rebate customers were not affected by the error and remain at 92 per cent and 95 per cent, respectively. These immaterial differences do not change the conclusions of the 2016–17 report.

95 AER 2018b. 96 ACCC 2018b, section 12.3.4 (recommendation 3) and section 13.2.3 (recommendation 32).


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the Essential Services Commission.97 The Australian Government has announced that it intends

to adopt the ACCC's recommendation.98

The table below summarises the weighted average annual bills for each category of customers

based on the corresponding typical consumption level (see Table 66). Weighted average annual

bills have been calculated by multiplying the typical bill calculation for each offer by the number

of customers on each offer by category (hardship, rebate, HEEAS and all combinations), then

dividing the total sum of the bill amounts by the number of customers in each category. The

numbers of customers receiving guaranteed only discounts and receiving all discounts is based

on the numbers of each reported by the retailers. Note that the bill calculations for rebate

customers do not include the value of the rebate, to allow comparisons to be made with the

actual underlying prices being paid.

Table 66 Weighted average annual bill by residential tariff / tariff combination and offer type, 2017–18

Standing offer ($)

(A)

Market offer incl

guaranteed discounts ($)

(B)

Difference ($)

(A) – (B)

Market offer incl

guaranteed and

conditional discounts ($)

(C)

Difference ($)

(A) – (C)

Hardship customers only

Flat rate 1,587 1,490 97 1,457 130

Flat rate with controlled load super economy

1,990 1,910 80 1,788 202

Flat rate with controlled load economy

1,932 1,827 104 1,688 244

Electricity rebate customers only

Flat rate 1,564 1,386 179 1,493 71


1,962 1,746 216 1,877 85


1,906 1,711 194 1,806 100

HEEAS support customers only

Flat rate 1,562 1,465 97 1,330 233


1,963 1,862 101 1,592 371

97 Thwaites, Faulkner and Mulder 2017 (recommendations 1 and 2). 98 AER 2018e.


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Standing offer ($)

(A)

Market offer incl

guaranteed discounts ($)

(B)

Difference ($)

(A) – (B)

Market offer incl

guaranteed and


(C)

Difference ($)

(A) – (C)


1,902 1,784 118 1,464 438

Hardship and rebate customers

Flat rate 1,570 1,475 95 1,471 99


1,978 1,859 119 1,802 176


1,912 1,806 106 1,760 152

Hardship and HEEAS support customers

Flat rate 1,592 1,492 100 1,419 173


2,013 1,937 76 1,765 248


1,961 1,869 93 1,706 256

Electricity rebate and HEEAS support customers

Flat rate 1,564 1,464 100 1,525 38


1,957 1,832 125 1,913 43


1,905 1,780 125 1,738 167

Hardship, electricity rebate and HEEAS support customers

Flat rate 1,567 1,482 86 1,476 92


1,979 1,873 106 1,821 158


1,928 1,812 116 1,836 92

Source: Retailers' responses to the QCA's information notice (unpublished); QCA analysis.

Consistent with the standing offer and market offer comparisons based on typical customer usage

in Chapter 2, hardship, rebate and HEEAS customers on market offers paid less than those on

standing offers.


136

We note that in some cases the weighted average typical bill for customers on guaranteed only

discounts is lower than the typical bill with guaranteed and conditional discounts. This appears

counter-intuitive because conditional discounts, where applied, would reduce a bill relative to a

bill with guaranteed only discounts. However, in the categories displaying this result, there is a

higher proportion of customers on more heavily discounted guaranteed discount offers. For

example, if there were 10 customers on a guaranteed-only discount of which eight customers

were receiving a 20 per cent discount and two were receiving a 10 per cent discount, the weighted

average bill would be lower than for 10 customers on conditional discounts where eight were

receiving a 10 per cent discount and two receiving a 20 per cent discount.

To compare annual bills for hardship, rebate and HEEAS customers with offers generally available

in the SEQ market at a more granular level, the next sections report residential bill outcomes by

retailer, as well as by aggregating bills into bands.

Residential flat rate offers

The table and figure below summarise the weighted average bills of a customer with typical usage

on a residential flat rate tariff, across all three categories of hardship, rebate and HEEAS

customers, by retailer. The method for calculating the weighted average is the same as described

for Table 66.

Table 67 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate offers), 2017–18

Retailer Standing offer ($) Market offer incl guaranteed

discounts only ($)

Market offer incl guaranteed and


Proportion of customers

receiving all guaranteed and

conditional discounts (%)

1st Energy — 1,670 1,430 68

AGL 1,571 1,568 1,569 85

Alinta Energy — — 1,239 100

Click Energy — 1,881 1,613 70


Dodo Power & Gas — — 1,452 100

EnergyAustralia 1,655 1,621 1,294 73

Energy Locals — 1,423 — —

Lumo Energy 1,554 1,510 1,351 87

Mojo Power — 1,510 — —

Origin Energy 1,563 1,323 1,419 25

People Energy — 1,461 — —

QEnergy 2,033 — — —

Red Energy 1,520 1,506 1,378 81

Sanctuary Energy 1,607 1,607 — —

Simply Energy — — — —


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Notes: A dash (—) means the retailer did not have hardship, rebate or HEEAS customers on that type of offer or, in the case of the proportion of customers receiving all guaranteed and conditional discounts, on offers that included conditional discounts. Origin Energy's result does not include the Predictable Plan as the prices customers pay vary depending on usage over the year.99


Chapter 2 presented a comparison of retailers' standing offer and market offer bills that were

generally available in the market in 2017–18, by using each retailer's offers to calculate bills based

on the typical usage level. A comparison of these bills with the weighted average bills presented

above provides an indication of whether hardship, rebate and HEEAS customers are paying similar

prices to those available in the market. Note that it is not a comparison with the actual bills paid

by customers in the wider market. Comparing the weighted average bills specifically to the

market offers available in the June quarter (section 2.4.1) we note the following:

The average standing offer bill did not differ materially for hardship, rebate and HEEAS

customers on standing offers for most retailers, with Diamond Energy being the exception

with an average bill that was 11 per cent higher for hardship, rebate and HEEAS customers.

The weighted average market offer bill including all discounts for hardship, rebate and

HEEAS customers ranged from $106 lower than the market offer average (8 per cent,

EnergyAustralia) to $235 higher than the market offer average (18 per cent, AGL). The

percentage difference between the highest hardship, rebate and HEEAS customer average

market offer bill and the market offer average is considerably higher than the 2016–17 value

of 2 per cent higher than the market offer average.

Origin Energy customers receiving all discounts appear to be paying more than the customers

receiving guaranteed only discounts for all tariff combinations (see Figure 37). As explained after

Table 66, this is due to the proportions of customers on each type of market contract.

99 See QCA 2017b, section 8.4.2 for information on Origin Energy's Predictable Plan.


138

Figure 37 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate offers), 2017–18

Sources: Retailers' responses to the QCA's information notice (unpublished); QCA analysis.

Residential flat rate with controlled load super economy offers

The table and figure below summarise the weighted average bills of a typical customer on a

combined residential flat rate with controlled load super economy tariff, across all three

categories of hardship, rebate and HEEAS customers, by retailer. The methodology is the same as

for residential flat rate offers above.

Table 68 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate with controlled load super economy offers), 2017–18


discounts only ($)

Market offer incl all guaranteed and conditional

discounts ($)


receiving all discounts (%)

1st Energy — 2,166 1,830 70

AGL 1,968 1,967 1,968 87


Click Energy — 2,454 2,115 75





Lumo Energy 1,940 1,864 1,673 70


139


discounts only ($)


discounts ($)




Origin Energy 1,958 1,667 1,769 25


QEnergy 2,654 1,630 — —

Red Energy 1,896 1,876 1,699 89


Simply Energy 2,043 2,078 2,077 10



As noted in the residential flat rate section above, we have compared these averages to those

presented in Chapter 2. Comparing the weighted average bills specifically to the market offers

available in the June quarter (section 2.4.2), we note the following:

The majority of average standing offer bills did not differ materially for hardship, rebate and

HEEAS customers on standing offers. The average standing offer bill for hardship, rebate and

HEEAS customers with Lumo Energy was 12 per cent lower than the average standing offer

bill whilst the Diamond Energy average standing offer bill hardship, rebate and HEEAS

customers was 11 per cent higher than the average bill.


HEEAS customers ranged from $339 lower than the market average (17 per cent, Lumo

Energy) to $298 higher than the market average (18 per cent, AGL). This represents a

significant increase in the range of percentage differences between average market offer

bills for hardship, rebate and HEEAS customers and average market offer bills compared to

2016–17 (5 per cent lower and 2 per cent higher than the average market offer bill).



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Figure 38 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate with controlled load super economy offers), 2017–18


Residential flat rate with controlled load economy offers

The table and figure below summarise the standing offer and market offer average bills of a

typical customer on a combined residential flat rate with controlled load economy tariff, across

all hardship, rebate and HEEAS customers, by retailer. The methodology is the same as for

residential flat rate offers above.

Table 69 Weighted average annual bills for hardship, rebate and HEEAS customers on retailers' standing and market offers (residential flat rate with controlled load economy offers), 2017–18


discounts only ($)


discounts ($)



1st Energy — 2,043 1,747 73

AGL 1,911 1,909 1,910 85


Click Energy — 2,336 2,000 70





Lumo Energy 1,841 1,833 1,633 79


141


discounts only ($)


discounts ($)




Origin Energy 1,904 1,635 1,722 25


QEnergy 2,516 1,591 — —

Red Energy 1,841 1,831 1,676 83


Simply Energy 1,758 1,837 1,863 30



For the residential flat rate with controlled load economy tariff combination, the weighted

average bills for Simply Energy customers display a similar anomaly to Origin Energy in that

customers receiving all discounts appear to be paying more than the customers receiving

guaranteed only discounts. Again, this is due to the proportions of customers on each type of

market contract. Further, we note that Simply Energy's market offer weighted average bills

appear to be higher than the standing offer weighted average bills. This is reflected in the

retailer's source data where the standing offer supply and usage charges are lower than most of

the market offer rates applying to these categories of customers. This may be due to the range

of offers these customers have signed up to over the years, with some standing offers at one

point in time being cheaper than some market offers at another point in time.

As noted in the residential flat rate section above, we have compared these averages to those

presented in Chapter 2. Comparing the weighted average bills specifically to the market offers

available in the June quarter (section 2.4.3) we note the following:

The average standing offer bill did not differ materially for hardship, rebate and HEEAS

customers on standing offers, with the exceptions of Simply Energy, whose bills for hardship,

rebate and HEEAS customers were 12 per cent lower than the average standing offer bill

available in the market and Diamond Energy, whose bills were 11 per cent higher.


HEEAS customers ranged from $194 lower than the market average (13 per cent, Alinta

Energy) to $286 higher than the market average (18 per cent, AGL). This represents a

significant increase in the range of percentage differences between average market offer

bills for hardship, rebate and HEEAS customers and average market offer bills compared to

2016–17 (3 per cent lower and 3 per cent higher than the average market offer bill).



142

Figure 39 Average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate with controlled load economy offers), 2017–18


QCA assessment

Customers on hardship programs, and/or receiving the rebate and/or receiving HEEAS support

are in some cases paying bills that are similar to the generally available offers published on Energy

Made Easy, based on the standing or market offer each of these customers has selected with each

retailer. However, there is a larger variation above and below the average bills available for all

customers in June 2018 than was observed in 2016–17 when comparing to June 2017. As noted

in Chapter 2, market offer bills generally reduced between 2016–17 and 2017–18, meaning that

hardship, rebate and HEEAS customers who have been on market contracts for an extended

period of time may not be benefitting from the latest, better offers. There are also a number of

customers who are paying less than the average market offer with their chosen retailer, indicating

a level of engagement with the market.

It should be noted that this analysis does not take account of any fees that may have been

incurred for late payment or payment processing.

7.4.3 Distribution of customer bills

The figures below show the distribution of customer bills based on typical usage levels for

standing and market offers, by residential tariff / tariff combination, for each of the customer

categories.


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Hardship customers

Figure 40 Distribution of annual bills for customers on hardship programs (residential flat rate offers), 2017–18


Figure 41 Distribution of annual bills for customers on hardship programs (residential flat rate with controlled load super economy offers), 2017–18



144

Figure 42 Distribution of annual bills for customers on hardship programs (residential flat rate with controlled load economy offers), 2017–18


Electricity rebate customers

Figure 43 Distribution of annual bills for customers receiving the rebate (residential flat rate offers), 2017–18



145

Figure 44 Distribution of annual bills for customers receiving the rebate (residential flat rate with controlled load super economy offers), 2017–18


Figure 45 Distribution of annual bills for customers receiving the rebate (residential flat rate with controlled load economy offers), 2017–18



146

HEEAS customers

Figure 46 Distribution of annual bills for customers receiving HEEAS support (residential flat rate offers), 2017–18


Figure 47 Distribution of annual bills for customers receiving HEEAS support (residential flat rate with controlled load super economy offers), 2017–18



147

Figure 48 Distribution of annual bills for customers receiving HEEAS support (residential flat rate with controlled load economy offers), 2017–18


Hardship and rebate customers

Figure 49 Distribution of annual bills for customers on hardship programs and receiving the rebate (residential flat rate offers), 2017–18



148

Figure 50 Distribution of annual bills for customers on hardship programs and receiving the rebate (residential flat rate with controlled load super economy offers), 2017–18


Figure 51 Distribution of annual bills for customers on hardship programs and receiving the rebate (residential flat rate with controlled load economy offers), 2017–18



149

Hardship and HEEAS customers

Figure 52 Distribution of annual bills for customers on hardship programs and receiving HEEAS support (residential flat rate offers), 2017–18


Figure 53 Distribution of annual bills for customers on hardship programs and receiving HEEAS support (residential flat rate with controlled load super economy offers), 2017–18



150

Figure 54 Distribution of annual bills for customers on hardship programs and receiving HEEAS support (residential flat rate with controlled load economy offers), 2017–18


Electricity rebate and HEEAS customers

Figure 55 Distribution of annual bills for customers receiving the rebate and HEEAS support (residential flat rate), 2017–18



151

Figure 56 Distribution of annual bills for customers receiving the rebate and HEEAS support (residential flat rate with controlled load super economy offers), 2017–18


Figure 57 Distribution of annual bills for customers receiving the rebate and HEEAS support (residential flat rate with controlled load economy offers), 2017–18



152

Hardship, electricity rebate and HEEAS customers

Figure 58 Distribution of annual bills for customers on hardship programs, receiving the rebate and HEEAS support (residential flat rate), 2017–18


Figure 59 Distribution of annual bills for customers on hardship programs, receiving the rebate and HEEAS support (residential flat rate with controlled load super economy offers), 2017–18



153

Figure 60 Distribution of annual bills for customers on hardship programs, receiving the rebate and HEEAS support (residential flat rate with controlled load economy offers), 2017–18


QCA assessment

The distribution of bills demonstrates that customer bills were generally clustered around similar

levels for each tariff combination with only a small number of bills being significantly above or

below the average.

While the proportion of hardship, rebate and HEEAS customers on market offers is relatively high,

those that remained on standing offers were paying significantly more than they could be paying.


154

7.4.4 Total value of discounts

Retailers were asked to provide the total value of conditional discounts received by hardship,

rebate and HEEAS customers in 2017–18. The table below summarises these amounts.

Table 70 Total and average discount value across hardship, rebate and HEEAS market offer customers, 2017–18

Hardship customers

($)

Rebate customers

($)

HEEAS customers

($)

Hardship and

rebate customers

($)

Hardship and

HEEAS customers

($)

Rebate and

HEEAS customers

($)

Hardship, rebate

and HEEAS

customers ($)

Total value of discounts

480,166 23,405,317 13,659 487,867 49,858 189,441 162,860

Total value of rebates

— 106,061,230 — 4,588,837 — 975,942 1,494,262

Total value of discounts and rebates

480,166 129,466,547 13,659 5,076,704 49,858 1,165,383 1,657,122

Average discount

45.62 75.25 24.05 36.25 38.35 66.19 37.17

Average discount plus rebate

45.62 416.25 24.05 377.25 38.35 407.19 378.17

Note: Value of discounts was not provided by all retailers. The average is based only on those retailers where a discount value was reported and the numbers of the hardship, rebate and HEEAS customers on their corresponding market offers.

Source: Retailers' responses to the QCA's information notice (unpublished); Queensland Government 2018, Appendix A: Concessions statement, p. 149; QCA analysis.

Excluding the rebate (where applicable), the table indicates a lower level of average savings than

the amounts available on Energy Made Easy, indicated by the bill data for the wider market in

Chapter 2. Reasons for this may be that hardship, rebate and HEEAS customers have lower usage

than the typical customer, these customers being less likely to receive conditional discounts, or

that savings are higher in the omitted retailers (i.e. the retailers that did not provide a value of

discounts). Further, if we assume that customers moved to market contracts consistently through

the year, there would be a proportion of customers who have not received the benefit of the

discounts for a full year. Compared to 2016–17, the average discounts have increased between

56 and 148 per cent for hardship, rebate and both hardship and rebate categories.

QCA assessment

The data presented above indicates that hardship, rebate and HEEAS customers are generally

taking advantage of market offers and receiving some level of discount from those offers.

However, based on the typical consumption used to calculate annual bills, it appears that there

are some who are paying more than they could, compared to the offers available and analysed in

Chapter 2.


155

7.5 Conclusion

The key points of our comparison and assessment of the prices paid by customers participating

in a retailer hardship program, receiving the electricity rebate, or receiving support through the

HEEAS, in 2017–18 are summarised below.


A high proportion of hardship, rebate and HEEAS customers are on market contracts; however, the overall proportion has reduced slightly, compared to 2016–17.

A year-on-year comparison suggests a number of customers who have been on market contracts have reverted to standing offers, so the net movement of customers from standing offers to market offers is lower than the numbers reported here.

On average, customers on hardship programs, and/or receiving the rebate and/or receiving HEEAS support are generally paying bills based on prices that are similar to the average of those available on Energy Made Easy, based on the standing or market offer each of these customers has selected with each retailer.

There are offers available that could result in hardship, rebate and HEEAS customers paying lower bills.

Queensland Competition Authority New retail tariffs and plans

156

8 NEW RETAIL TARIFFS AND PLANS

This chapter focuses on new types of retail tariff structures and retail electricity plans that

emerged in 2017–18. A small number of new retail tariff plans emerged in 2017–18. Some retailers

attached new incentives and benefits to their offers in 2017–18; we consider these to also be new

types of retail plans.

8.1 Background

8.1.1 AEMC retail energy competition review

In its report of the retail energy competition review (published June 2018), the AEMC noted that,

despite the benefits that retail price deregulation has brought to customers in the energy sector,

there has been 'very limited tariff innovation by retailers'. The AEMC also reported that, 'for the

most part', adoption of digital technologies to deliver product innovation had been 'slow'.102


We identified a small number of new tariff structures and plans emerging in SEQ in 2016–17.

These are summarised in the table below.

Table 71 New retail tariff structures and plans, 2016–17

Retailer Plan name/type Tariff structure / plan

Mojo Power Subscription based plans Subscription fee ($280 or $420 annually) plus supply and usage charges.(a)

Subscription fee allowed residential customers to access the retailer's wholesale rates.

Origin Energy Predictable Plan Annual fixed price based on forecast usage.

Price was reviewed annually based on billed usage.

Powershop Powerpacks Two-part tariffs; customers could select from a range of discounts on the usage charge depending on their circumstances.

Four Powerpacks were available to customers: top-up packs, online saver packs, spot specials and future packs.

(a) In December 2017, Mojo Power added a 'Mojo Points' benefit to its EnergyPass subscription plans. The benefit of $480 (GST incl.) was provided to customers via 12 bill credits of $40 per month. The annual subscription price for the EnergyPass offers was $360 (GST incl.) and was paid annually, at the start of the contract, and was non-refundable (source: Energy Made Easy).

Source: QCA 2017b, section 8.4.


Section 3 of the Direction requires the market monitoring report to include comment on the

emergence of new types of retail tariff structures and retail electricity plans in 2017–18.

102 AEMC 2018a, section 2.5.


157

8.3 QCA methodology

We collected and analysed retail tariff structure and electricity plan data from Energy Made Easy

to report on the emergence of new tariff structures and plans.

Further, we invited retailers to provide specific information on any new tariff structures and plans

in their responses to the information notice for switching, hardship, rebate and HEEAS customers.

We also note that some retailers attached new incentives and benefits to their offers in 2017–18.

The offers with incentives and benefits attached to them could be considered new types of retail

plans; however, as we analyse these in Chapter 3, we do not include them in this chapter.

8.4 QCA monitoring

A small number of new retail tariff plans emerged in 2017–18.103

8.4.1 EnergyAustralia

EnergyAustralia launched its Secure Save plan at the end of 2017; the product offered a 24-month

fixed rate plan, with a guaranteed reduction in prices should market prices decrease during the

contract.104

8.4.2 Next Business Energy—declining block time of use tariff structure

In February 2018, Next Business Energy published small business time of use offers with a

declining block tariff structure. For its standing and market offers, between 7am and 9pm, the

first 27.4 kilowatt hours of consumption (per working day) was priced at 36 cents per kilowatt

hour (GST exclusive), with remaining consumption priced at 34 cents per kilowatt hour (GST

exclusive). The off peak price on the offers was 29 cents per kilowatt hour (GST exclusive).

In June 2018, Next Business Energy published a new market offer with the first 27.4 kilowatt hours

of consumption (per working day) priced at 26.5 cents per kilowatt hour (GST exclusive), and an

off peak price of 20.5 cents per kilowatt hour (GST exclusive).105

8.4.3 Origin Energy

Origin Energy introduced two new products to the small business customer segment in 2017–18:

The Rate Freeze product enabled a customer to sign up to an energy plan which guaranteed

that for the duration of the period signed up for (12 or 24 months) that their prices would

not change.

The Business Bill Saver product, which is a small business usage and supply charge discount

product.106

103 We note that Energex's network tariff guide for 2018–19 includes a residential demand tariff (tariff 15). We

expect to report on new retail plans for this tariff in our market monitoring report for 2018–19 (if we are directed to report on new tariffs and plans in the market for 2018–19). For more information on the demand tariff, see Energex 2018, section 2.2 or QCA 2018a, section 3.2.2.

104 EnergyAustralia 2018, response to QCA's information notice (unpublished). 105 This offer was the lowest small business time of use market offer in SEQ in the June quarter; see Chapter 2,

section 2.4.5 (June quarter). 106 Origin Energy 2018, response to QCA's information notice (unpublished).


158

Origin Energy explained that, while neither of these products were new in function, they were

offered to Queensland small business customers for the first time in 2017–18.107

8.4.4 Simply Energy

Simply Energy did not introduce any new retail tariffs in 2017–18, but attached a new, wider,

range of incentives and benefits to its offers than it did in 2016–17.108

8.5 Conclusion

The box below summarises the QCA's commentary on whether new types of retail tariff

structures and retail electricity plans have emerged in 2017–18.

Commentary

A small number of new retail tariff plans emerged in 2017–18.

Some retailers attached new incentives and benefits to their offers in 2017–18; we consider these to also be new types of retail plans.

107 Origin Energy 2018, response to QCA's information notice (unpublished). 108 Simply Energy 2018, response to QCA's information notice (unpublished).

Queensland Competition Authority Market competitiveness

159

9 MARKET COMPETITIVENESS

This chapter examines whether the outcomes observed in the SEQ retail electricity market were

broadly consistent with a competitive retail market. Our assessment—though limited to a narrow

range of indicators and a short period of time—indicated an increased rivalry between retailers

to offer better deals to customers in 2017–18, which followed the entry of Alinta Energy in August

2017. We note that competition is still mostly based on discounts, while retailers did not generally

offer products tailored to customers' needs. However, as the use of smart meters becomes more

widespread and technology continues to improve, retailers may deliver more innovative products

in future. Competition may be hindered though if price-sensitive customers are not on the best

possible plan because they find it difficult to navigate the market and compare offers.


Section 4 of the Direction requires the QCA to comment on whether the outcomes observed in

the SEQ retail electricity market are broadly consistent with a competitive retail market.

9.2 QCA methodology

This is the first time we have been asked to comment on the competitiveness of the SEQ retail

electricity market, although it is important to note that we have not been asked to undertake a

comprehensive review of competition (under section 89D of the Electricity Act).

In this chapter, we comment on whether the market outcomes we report on in this review,

namely prices and the range of electricity offers available in 2017–18, are broadly consistent with

a competitive market. We consider:

the extent of rivalry between retailers on price and product offerings

whether prices broadly moved in line with costs

the spread of prices available in the market.

We note that we cannot draw firm conclusions about the state of competition by considering a

narrow range of competition indicators over a short period of time. Our assessment should also

be considered in the context of other reviews of the operation and competitiveness of retail

electricity markets, including:

the ACCC's recently completed inquiry into electricity supply and prices109

the AEMC's annual reports (for 2017 and 2018) on retail energy competition110

the AER's report (for 2016–17) on compliance and performance of the national retail energy

market111 and the (2017) state of the energy market.112

We have drawn on the findings of these other reviews where they help to interpret the market

outcomes we report on.

109 ACCC 2018b. 110 AEMC 2017; AEMC 2018a. 111 AER 2017b. 112 AER 2017c.


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9.3 QCA commentary

9.3.1 Extent of market rivalry

One indicator of a competitive market is the extent of rivalry between retailers to attract and

retain customers.

To examine the extent of rivalry between retailers, we considered whether the outcomes

reported in Chapters 2, 3 and 5 demonstrated that retailers were competing on price by adjusting

their offers in response to the offers of other retailers. We also considered the extent to which

retailers were introducing new and innovative tariffs and offers to attract customers, by

considering the outcomes reported in Chapters 3 and 8.

Competition on prices, discounts, incentives and benefits

In SEQ, retailers competing on prices with headline discounts is the predominant form of

competition. These discounts are usually conditional on customers meeting certain conditions,

such as paying on time, and generally apply only to usage charges (see Chapter 3).

The wide-spread practice of discounting may be connected to the way the competitive market

was established in SEQ and continues to be regulated. Full retail contestability was introduced in

2007 after the sale of the customer bases of publicly owned retailers to two privately owned

retailers (AGL and Origin Energy).113 Following the opening of the market to competition,

customers could still access a regulated price. The regulated price effectively acted as a cap on

prices available in the market, with retailers competing for customers of the incumbent retailers

by offering discounts to the regulated price.114 Although prices are no longer regulated, retailers

are still required to provide a standing offer and the practice of discounting has continued, albeit

off retailers' unregulated standing offer prices, rather than the regulated price.115

We have observed pricing outcomes suggesting that rivalry between retailers intensified in SEQ

following the aggressive entry of Alinta Energy in August 2017. Alinta Energy started making offers

that were amongst the lowest in the market. Over the year, several retailers decreased their

offers for residential and small business customers, by generally increasing conditional discounts

and/or using sign-up incentives to reduce the price of their lowest offers. However, retailers

appeared to respond more aggressively in the residential customer segment than the small

business segment.116

In a report commissioned by Alinta Energy, Deloitte found that Alinta Energy's entry contributed

to improved competitiveness because other retailers responded with increased discounts,

meaning a wide range of customers benefited from greater discounting activity.117 Five months

113 Beattie and Bligh 2006; Beattie, Bligh and Wilson 2007. We also note that, in its draft market monitoring

report for 2017–18, IPART similarly noted the 'incumbency advantages' the Big 3 retailers enjoy on account of them acquiring the customer bases of the publicly owned retailers when the New South Wales electricity market was opened to competition. See IPART 2018a, section 3.4 (Box 3.2).

114 QCA 2014, section 5.1.3. 115 In August 2018, the Australian Government announced that it had accepted the ACCC's recommendation to

replace standing offer prices with default offers to be set by the AER: Morrison and Frydenberg 2018. The Australian Government has since asked the AER to develop default market offers to apply from 1 July 2019 in jurisdictions without price regulation: AER 2018e.

116 Based on information on market offers and discounts in Chapters 2, 3 and 5. 117 Deloitte 2018, p. 3.


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after entering the SEQ market, Alinta Energy announced that it had acquired over 100,000

customers in SEQ.118

Along with price deregulation, Alinta Energy's entry has also been cited by the AEMC as a key

driver of an increase in the number of customers switching retailers and a reduction in market

concentration.119 The percentage of customers switching retailers in SEQ was 25 per cent in 2017

(up from 17 per cent in 2016). This was only just below the switching rate in Victoria, which had

the highest rate in the National Electricity Market (NEM) at 27 per cent.120

Of the NEM states, SEQ also experienced the biggest decline in the market share of the biggest

three retailers, and the biggest decline in market concentration, in 2017.121 However, SEQ is still

the third most concentrated market in the NEM, as measured by the Herfindahl-Hirschman Index

(HHI).122 The AEMC demonstrates that since 2010 bigger gains in market share by smaller retailers

are generally correlated with longer periods of deregulation in jurisdictions. For example, in the

first state to deregulate prices—Victoria, in 2009—smaller retailers gained market share of 16 per

cent over that period, compared to 9 per cent in SEQ.123

The AEMC reported that some retailers considered Alinta Energy's entry into the market had

promoted competition and improved price offerings. However, the AEMC noted that other

retailers were concerned about the support given to Alinta Energy by the Queensland

Government. Retailers cited Alinta Energy's agreement with CS Energy (a Queensland

Government-owned generation business) and the support Alinta Energy received from the

Queensland Government to promote its offers to customers as areas of concern.124

The AEMC also highlighted the concerns of smaller retailers about the increasingly prevalent

practice of 'win-back' offers across the NEM, acting as a barrier to entry or expansion in the

market. Smaller retailers noted they often lose customers they have just acquired from bigger

retailers, because they are unable to compete with the discounts those customers are offered to

stay with their existing retailer.125

Competition to provide innovative tariffs and service offerings

There has been limited innovation in tariff and service offerings since prices were deregulated,

with the introduction of a small number of new plans in 2016–17 and 2017–18 (see Chapter 8).

Most retailers also offer customers the option of purchasing electricity from GreenPower

accredited sources (see Chapter 3), although this option has been available for a number of years.

Several retailers also offer other incentives and benefits with their electricity plans; for example,

sign-up bonuses, movie tickets and frequent flyer points (see Chapter 3). More retailers offered

118 Alinta Energy 2018. 119 AEMC 2018a, section 3.1.4. 120 AEMC 2018a, section 5.4.1 and Appendix F.1 (Table F.1). 121 AEMC 2018a, section 3.1.3 and Appendix F. 122 The SEQ market was 3,246 on the HHI in 2017 (down 450 points from 2016). A market that has a single firm

(i.e. a monopoly) has an HHI of 10,000, while a theoretically perfectly competitive market has an HHI approaching zero: AEMC 2018a, section 3.1.3 and Appendix F.1 (Table F.1).

123 AEMC 2018a, section 3.1.3. We note that, in September 2018, the AER announced that it had removed all retail performance data from its website as a result of what it described as 'significant errors' in the information provided to it by AGL (AER 2018b). It is not clear whether the AER's decision affects the AEMC's calculation of the HHI.

124 AEMC 2018a, section 3.8.1. In section 3.2 of its report, the AEMC described the retailer survey it used to inform its discussion of the state of competition in the NEM.

125 AEMC 2018a, section 3.3.4.


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these types of benefits to residential customers in 2017–18 than the previous year, and there was

also a more diverse range of benefits in 2017–18. However, compared to residential customers,

fewer retailers offered these benefits to small business customers and the range of benefits was

also less diverse.

As prices were only deregulated two years ago, we would expect retailers to compete by making

a wider range of innovative products available over time. However, the potential for innovation

is limited because most customers in SEQ have accumulation meters. Under the Power of Choice

reforms, advanced, or 'smart', meters are being progressively rolled out in Queensland and other

states. In interviews with the AEMC, retailers advised they were developing more products and

services as the smart meter roll out continues.126

In a 2017 report for the Victorian Government, KPMG found that smart meters have enabled

retailers to offer a more diverse range of products in Victoria, New Zealand and the

Netherlands127, although KPMG also found that Victoria has less product diversity than the other

two jurisdictions. KPMG considered that policies complementing the deployment of smart

meters, like the successful consumer empowerment campaign in New Zealand, may improve the

diversity of products available.128

In addition to the roll-out of smart meters, the AEMC noted that falling solar and battery costs,

energy management software, smart appliances, home automation and low financing costs could

have a fundamental impact on competitive market dynamics in future.129

9.3.2 Whether prices broadly moved with costs

In a competitive market, we would expect prices to broadly move in line with changes in costs.

While an assessment of costs is outside the scope of our review, we have been able to draw on

our retail electricity pricing decisions for regional Queensland, which include an assessment of

costs in SEQ.

The QCA sets regulated prices in regional Queensland annually. In accordance with the

Queensland Government's uniform tariff policy, we set prices for residential and small business

customers that broadly reflect the expected prices for similar customers on standing offers in

SEQ. We do this by estimating the efficient costs of supply and then adding an amount (the

standing offer adjustment) that we consider reasonably represents the expected differential

between our estimates of efficient costs and expected standing offer price levels.130

In our 2017–18 pricing decision, we set regulated prices that resulted in an increase in annual bills

of between 3 and 4 per cent for typical customers on the main residential and small business

tariffs. The increases were mainly driven by expected increases in wholesale energy costs and

provide an indication of the expected change in efficient costs in SEQ between 2016–17 and

126 AEMC 2018a, section 3.7.2. 127 KPMG 2017, section 9.1 and Appendix A4.4. 128 KPMG 2017, section 4.7 and Appendix A.6. 129 AEMC 2018a, Executive Summary (page xii). 130 QCA 2017c, section 6.1. We note that, in our most recent pricing decision covering the 2018–19 year, we

were asked by the Minister to consider additional matters when forming a view on an appropriate standing offer price, including the potential value of preferential terms and conditions that apply to customers on a standard retail contract (QCA 2018a, section 6.1). However, we have only drawn on the 2016–17 and 2017–18 pricing decisions for the purposes of our competition assessment in this report.


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2017–18, because other aspects of regulated prices unrelated to cost changes, such as the

standing offer adjustment, did not change.131

However, it is important to be cautious when applying these findings to any assessment of prices

in the deregulated SEQ market for several reasons, including the following:

Our pricing decisions reflect our best estimate of efficient costs based on the information

available to us at the time of each review; actual efficient costs may be higher or lower than

our estimate. In addition, our decisions do not reflect differences in costs between

retailers132 or account for differences in the costs of supplying products with different

attributes.

We report on bills (including discounts and incentives) for a typical customer in SEQ that are

generally available in a particular year, whereas it is the prices customers actually pay over

time that enables retailers to recover their costs.

Retailers use different pricing strategies to recover their costs, which can result in a wide

range of prices in the market. For example, as noted below, prices in a competitive market

may vary to reflect the willingness to pay of different groups of customers. This may result in

retailers increasing prices for less price sensitive customers by a bigger amount than prices

for more price sensitive customers. Further, given the prevalence of retailers using

discounting and sign-up incentives in SEQ, retailers may be increasing prices to some

customers at the same time as decreasing prices to others. Retailers might also adjust the

pricing components (such as supply and usage charges) to target high or low consumption

customers, meaning that comparing changes in regulated and market prices on the basis of

'typical consumption' can be misinterpreted.

As shown in Table 72, the average standing offer price in SEQ for the main residential tariff

increased by more than the increase in the regulated price in regional Queensland, while the

average standing offer price for the main small business tariff increased by less. Around 20 per

cent of residential customers and one third of small business customers remain on a standing

offer.133 For both residential and small business tariffs, the average market and lowest market

offers actually decreased.

As noted above, prices in a competitive market may move in different ways to reflect the price

sensitivity of customers and we discuss this issue further in section 9.3.3 below. Overall, we found

no evidence to suggest that prices moved in a way that was out of line with changes in costs in

2017–18.

131 QCA 2017c, section 8.2. We considered whether we could rely on our 2015–16 and 2016–17 pricing

decisions to assess cost changes between these two years. However, we changed our approach to assessing retail costs for residential and small business customers in the 2016–17 decision to a benchmarking approach using market offers available in several NEM jurisdictions (QCA 2016a, chapter 5), meaning it was not possible to isolate the change in costs from the change in approach.

132 For instance, retailers use a variety of strategies to manage the volatility of electricity spot prices, which may differ from the market hedging approach we use in our pricing decisions. In addition to the market hedging approach (which involves purchasing financial derivatives), other hedging strategies include entering into long-term power purchase agreements with electricity generators, and investing in electricity generation. See QCA 2017c, section 4.1.

133 Based on the data we collected from retailers for our analysis in Chapter 7, 22 per cent of residential customers in SEQ were contracted to a standing offer in 2017–18, compared to 30 per cent in 2016–17. The ACCC reports that around one-third of small business customers in SEQ were contracted to a standing offer as at 30 June 2017. See ACCC 2018b, sections 12.2 (Figure 12.4) and 18.1.1.


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Table 72 Change in average annual bills for typical residential and small business flat rate customers, June 2017 to June 2018

Change in residential customer bills

Change in small business customer bills

$ change % change $ change % change

Regulated price (applicable in regional QLD)

$48 3.2% $93 4.0%

Average standing offer (SEQ) $78 5.0% $55 2.2%

Average market offer (SEQ) $0 0.0% –$48 –2.1%

Average lowest market offer (SEQ) –$33 –2.4% –$75 –3.3%

Note: Changes in annual bills reflect prices available in June 2017 and June 2018.

Sources: Analysis based on tables in Chapter 5; QCA 2016a, section 8.0; and QCA 2017c, section 8.1.

While the change in regulated prices provides an indication of the change in the costs of supply

in SEQ, we do not consider that direct comparisons between regulated prices and prices available

in SEQ provides useful insights into the state of competition in SEQ. As noted above, we set

regulated prices that reflect our expectation of standing offer prices that will apply in SEQ for the

forthcoming year. These prices do not reflect the QCA's view of an appropriate or reasonable

price to apply in SEQ and are not a benchmark price for comparison purposes.

Publishing comparisons and drawing links between regulated prices and prices observed in the

SEQ market may also increase the likelihood that regulated prices applicable in regional

Queensland have the effect of distorting prices in SEQ, with potentially adverse effects on

competition. For instance, regulated prices may become a focal point for price benchmarking

between retailers, resulting in the divergence of prices decreasing as prices cluster around the

regulated price.134

9.3.3 Spread of prices in the market

The spread of prices available in a market for a product is known as price dispersion. Price

dispersion exists in retail electricity markets and is evidenced in SEQ by the range of offers

available from higher priced standing offers to lower priced market offers (see Chapters 2 and 3).

Significant price dispersion often exists in competitive markets, even when there are no

significant differences in the characteristics or costs of a particular product.135 In competitive

markets, firms may recover their fixed costs by charging higher prices to customers that are less

price sensitive, which then enables firms to compete for more price sensitive customers by

offering lower prices. This enhances overall consumer welfare as the lower prices approach

marginal cost and output increases relative to a single average price applying to all customers.

For example, movie theatres often charge lower prices to students and pensioners than other

customers.

However, the ACCC and AEMC have raised concerns that significant price dispersion observed in

retail electricity markets is not the result of a well-functioning competitive market. Concerns have

been raised that a driver of significant price dispersion is information asymmetry; for instance,

the confusing discounting practices of retailers and difficulties customers are facing to navigate

134 For further discussion of the impacts of pricing focal points in a market (such as regulated prices) see Yarrow

2008, section 2.4.4 and The Brattle Group 2018, chapter V. 135 IPART 2017a, section 4.2.3; IPART 2017b, pages 2–3; Littlechild 2017; Nelson et al. 2018.


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the market are detracting from the ability of customers to obtain the best offer for them.136 The

Grattan Institute noted that customers paying the lowest prices are those that are well informed

and able to navigate the market, not necessarily those with a lower willingness to pay.137

We report on trends in standing offers and market offers in Chapter 5, which we have used to

assess the extent of price dispersion from 2015–16 (the last year prices were regulated in SEQ) to

2017–18. Based on the offers available in the June quarter of each year, we calculated the

difference between the average standing offer and the average lowest priced offer for typical

residential and small business customers on flat rate tariffs.

The spread of offers increased between June 2016 and June 2018, with a particularly notable

increase in the spread of residential offers between June 2017 and June 2018 (Table 73).

Table 73 Spread of bills for typical residential and small business customers on flat rate tariff offers, June 2016 to June 2018

June 2016 June 2017 June 2018

Residential tariffs

Average standing offer $1,446 $1,548 $1,626

Average lowest market offer $1,333 $1,381 $1,348

Difference ($) $113 $167 $278

Small business tariffs

Average standing offer $2,142 $2,500 $2,555

Average lowest market offer $2,000 $2,247 $2,172

Difference ($) $142 $253 $383

Source: Analysis based on tables in Chapter 5.

Price dispersion increased because standing offers generally increased by more than the lowest

priced market offers. In some cases, the lowest priced offers decreased, rather than increased.

Consistent with our commentary above, we consider that a key driver of the significant increase

in the spread of residential offers from June 2017 to June 2018 was the increased rivalry between

retailers following Alinta Energy's entry, which put pressure on retailers to reduce their market

offers. This result is consistent with an increase in competition in 2017–18.

If retailers cannot differentiate their offers, they may find it difficult to attract customers from

other retailers and customers will have less incentive to search for a better deal, because the

benefits of shopping around may not outweigh the costs.138 In 2017–18, the range of offers

available in the market provided significant opportunities for customers to save money. As noted

above, there was an increase in the proportion of customers switching retailers and a decrease

in market concentration in 2017–18, which indicates that customers were benefiting from the

cheaper offers available.

Nevertheless, competition may not be working as effectively as it should if customers would like

to obtain a better deal, but find the process of navigating the market and comparing offers

136 ACCC 2017, section 4.2.2, ACCC 2018b, section 13.2.1 (Box 13.2); AEMC 2018a, section 4.5.4. 137 Grattan Institute 2017, section 4.1. 138 In customer research conducted for the AEMC's 2017 review, on average, SEQ customers said they would

need to save around a quarter of their typical electricity bill to consider switching. See Newgate Research 2017, pages 46–47.


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prohibitively complex. Recent customer surveys drawn on by AEMC for its 2018 retail energy

competition review found that most customers in SEQ were confident in their ability to navigate

the energy market:

Residential customers—65 per cent were confident in their ability to make good decisions

(down 3 per cent from 2017) and 57 per cent were confident they could access easily

understood information (unchanged from 2017).

Small business customers—67 per cent were confident they could find the right information

(unchanged from 2017).139

However, some customer groups may find it more difficult to navigate the market than others.

This is an issue of particular concern if customers facing affordability issues are supplied on higher

priced plans that do not suit their circumstances and they would like to obtain a better deal.140

As part of its recent electricity pricing inquiry, the ACCC reported on the proportion of customers

on payment plans or participating in hardship schemes that are on standing offers. This provides

some insight into the extent to which customers facing affordability issues are supplied on higher

priced plans. The ACCC reported that a lower proportion of hardship and payment plan customers

in SEQ were on standing offers than other residential customers (8 per cent of hardship and

payment plan customers compared to 21 per cent of other residential customers). However, of

customers on market offers, the ACCC reported that a lower proportion of hardship and payment

plan customers in the NEM were achieving conditional discounts than other residential customers

(41 per cent of hardship customers and 56 per cent of payment plan customers, compared to 73

per cent of residential customers).141

These findings suggest that, while the majority of hardship and payment plan customers have

moved to a market offer, many customers facing affordability issues may not be on an

appropriate plan for their circumstances.

We note that the following recent initiatives have been designed to assist customers to navigate

the market and access better offers for their circumstances:142

In August 2017, the Australian Government obtained the agreement of the biggest retailers

to write to their standing offer customers and advise that better offers may be available. As

noted in Chapter 6, this action is likely to have contributed to a significant increase in the

rate that SEQ customers switched from standing offers to market offers with their retailers

in 2017–18 (4.3 per cent compared to 1.8 per cent in 2016–17).

The AER updated the guidelines on the information retailers must provide on their offers

and improved the usability of Energy Made Easy. However, as pointed out by the AEMC and

ACCC, awareness and usage of Energy Made Easy has historically been low, with commercial

sites more widely recognised and used.143

The AEMC made rule changes to prohibit retailers discounting from inflated prices and to

require retailers to provide advance notice of price changes. The Australian Government also

139 AEMC 2018a, Appendix F.1 (Table F.1). 140 Simshauser and Whish-Wilson 2015. 141 Based on 2016–17 data: ACCC 2018b, section 12.2.1 and section 13.2.2. 142 AEMC 2018a, section 5.6. 143 AEMC 2018a, section 5.4.3; ACCC 2018b, section 14.3. Research conducted for the AEMC's 2017 review

found that only 13 per cent of customers in SEQ were aware of Energy Made Easy. See Newgate Research 2017, section 4.2.2.


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recently lodged a rule change request with the AEMC to require retailers to contact standing

offer customers to encourage them to seek out a better offer.144

However, it is important to highlight that regulatory interventions aimed at improving outcomes

for customers can have unintended consequences. For example, Ofgem imposed requirements

on United Kingdom energy retailers in 2009 to reduce pricing complexity, including a ban on

complex tariffs and a limitation on the number of tariffs retailers could offer. A subsequent

investigation by the Competition Markets Authority (CMA) found that these rules may have

adversely affected competition and resulted in worse outcomes for customers.145 As a result of

the CMA's findings, Ofgem removed many of these rules in late 2016.146

As highlighted by the AEMC, a recent example of a market-driven initiative aimed at helping

customers obtain a better deal is the 'Transformer' service, which was launched in May 2018 by

Australian consumer advocacy group, CHOICE.147 The service was established to challenge

commercial comparison sites, which are based on commissions and a limited number of retailers

and offers. For an annual fee, the service aims to find customers a better deal for their particular

circumstances and to switch customers to those deals as they become available.148

Regardless of the steps taken to improve the ability of customers to engage in the market, there

is likely to remain a group of customers that continue to pay higher prices, despite cheaper prices

being available. Some customers may be willing to pay higher prices because they value the

benefits they receive on their electricity plan. Other customers may make a rational choice

against actively participating in the market. If retailers do not make excessive profits over the

longer term, this outcome is consistent with a competitive market because it enables retailers to

offer better deals to price sensitive customers.

Finally, we note that the ACCC undertook an analysis of retailers' margins to gain an

understanding of retailers' profitability as part of its recent electricity pricing inquiry. The ACCC

reported that, in 2017–18, SEQ had the lowest retail margin for residential customers in the

NEM.149 We also note that the ACCC has been directed by the Australian Government to report

at least six-monthly (until 2025, with the first report due by 31 March 2019) on prices, profits and

margins in the NEM.150

9.4 Conclusion

The box below summarises the QCA's commentary on whether prices and the range of electricity

offers available in the SEQ retail electricity market in 2017–18 were broadly consistent with a

competitive retail market.

144 For more information, see the rule change projects page on the AEMC website. 145 Competition Markets Authority 2016, summary (pages 41–42). 146 Ofgem 2016. 147 AEMC 2018a, section 5.4.3. 148 See Transformer website. 149 ACCC 2018b, section 1.1.1. 150 ACCC 2018d.

https://www.aemc.gov.au/our-work/changing-energy-rules/rule-changes

https://transformer.choice.com.au/


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Summary of our findings

The outcomes we observed were broadly consistent with a competitive market, albeit a market that is continuing to develop and evolve. However, our assessment was limited to considering a narrow range of indicators over a short period, so we cannot draw firm conclusions about the state of competition in SEQ.

There were positive signs of increased rivalry between retailers to offer better deals to customers in 2017–18, which followed the entry of Alinta Energy in August 2017. There were indications that customers took advantage of these deals, as evidenced by the increase in the number of customers switching retailers and the decrease in market concentration.

Competition is still largely discount-based and the market has not yet evolved to deliver a diverse range of products tailored to customers' needs. However, retailers may deliver more innovative products in future as the use of smart meters becomes more widespread and technology continues to improve.

The spread of prices in the market has increased significantly since prices were deregulated, because standing offers generally increased by more than the lowest priced market offers:

(a) We consider this outcome is generally consistent with a competitive market.

In 2017–18, the increased rivalry between retailers put pressure on retailers to

reduce their market offers and we found no evidence to suggest that prices

were moving in a way that was out of line with changes in costs.

(b) However, competition may not be working as effectively as it should if price-

sensitive customers (including customers facing affordability issues) are not on

an appropriate plan for their circumstances and they would like to obtain a

better deal but find it difficult to navigate the market and compare offers.

The ACCC and AEMC recently completed comprehensive investigations into competition in retail energy markets in the NEM, including SEQ.

Queensland Competition Authority Significant issues

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10 SIGNIFICANT ISSUES

This chapter briefly discusses the implementation of Power of Choice reforms to metering

arrangements that commenced in December 2017. We anticipate that retailers' reporting to the

AER on new measures regarding smart metering will provide useful information for stakeholders

to analyse the implementation of Power of Choice.


Section 5 of the Direction requires the market monitoring report to include comment on any

significant issues that emerged in 2017–18.

10.2 Background

In December 2017, the AEMC's rule change for expanding competition in metering and related

services commenced. The competition in metering rule was finalised in 2015 as part of the Power

of Choice reform program; the program provides a framework for the competitive provision of

smart meters for residential and small business customers across the NEM.151

10.3 QCA methodology

We do not have access to data that would allow us to quantify the costs and benefits of

competition in metering in SEQ. However, we have reviewed a range of publicly available reports

on the implementation of Power of Choice for the period December 2017 to June 2018.

10.4 QCA monitoring

AEMC

In May 2018, the AEMC published a consultation paper for its metering installation timeframes

rule change process. In terms of the number of smart meters installed in the NEM, the AEMC

reported that:

more than 500,000 smart meters had been installed across the NEM outside of Victoria since

the competition in metering rules were made in November 2015

approximately 100,000 smart meters had been installed across the NEM outside of Victoria

since 1 December 2017.152

The consultation paper responded to rule change requests from the Australian Government and

Australian Energy Council to address delays in meter installations following the introduction of

Power of Choice. In general terms, the delays were the result of industry participants adjusting to

the new roles and responsibilities associated with the reforms.153

Energy and Water Ombudsman Queensland

In its annual report for 2017–18, the Energy and Water Ombudsman Queensland (EWOQ)

reported that it had experienced significant increases in the number of complaints about

151 AEMC 2018d, section 2.1. 152 AEMC 2018d, section 2.1.3. 153 AEMC 2018d, chapter 3.

Queensland Competition Authority Significant issues

170

provision, transfer, marketing and customer service following the introduction of digital metering

(which caused delays with new and existing connections), and greater competition among

electricity retailers.154

IPART

In October, the Independent Pricing and Regulatory Tribunal (IPART) draft report on its review of

retailers' metering practices in New South Wales reported that:

while the average time taken for new or replacement meters had decreased since December

2017, retailers were still exceeding the AEMC's proposed draft timeframes of six business

days for a new connection or 15 business days for a simple meter exchange

since 1 January 2018, the EWON had received an average of 170 complaints a month about

metering issues, with almost 100 of these about installation delays.155

New AER retailer performance reporting framework

In Chapters 6 and 7 we noted that, in April 2018, the AER issued new reporting procedures and

guidelines for retailers to provide performance information to the AER from January 2019.156 The

guidelines include new measures for retailers to report on:

the number of customers with smart meters

types of tariff structures for customers with smart meters

complaints made by customers regarding

installation of smart meters

issues relating to the de-energisation of smart meters as a result of the installation

process

access to or presentation of meter data

privacy issues in relation to smart meters

the cost of smart meters.157

We anticipate that retailers' reporting on these new measures will provide useful information for

stakeholders to analyse the implementation of Power of Choice.

10.5 Conclusion

The box below summarises the QCA's commentary on significant issues that emerged in the SEQ

retail electricity market in 2017–18.

Commentary

The implementation of Power of Choice reforms to metering arrangements in SEQ in 2017–18 was a significant step for the retail market.

154 EWOQ 2018, page 8. 155 IPART 2018b, sections 1.1 and 2.1. 156 See AER 2018c; AER 2018d, section 2.1. 157 AER 2018c, schedule 2 (indicators S2.7, S2.8 and S3.8–S3.13).

Queensland Competition Authority Glossary

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GLOSSARY

1st Energy 1st Energy Pty Ltd

ACCC Australian Competition and Consumer Commission

AEMC Australian Energy Market Commission

AER Australian Energy Regulator

AGL AGL Sales Pty Ltd

Alinta Energy Alinta Energy Retail Sales Pty Ltd

Amaysim Energy amaysim Energy Pty Ltd

Amex American Express

APM approved payment methods

Click Energy Click Energy Pty Ltd

Competition and Consumer Act Competition and Consumer Act 2010 (Cth)

Diamond Energy Diamond Energy Pty Ltd

Dodo Power & Gas Dodo Power & Gas (M2 Energy Pty Ltd)

ECPLA Act Electricity Competition and Protection Legislation Amendment Act 2014 (Qld)

ECPLA Act Proclamation Electricity Competition and Protection Legislation Amendment Act 2014 (Qld) Proclamation (SL 2015 No. 32) (Qld)

ECPLA Bill explanatory notes Electricity Competition and Protection Legislation Amendment Bill 2014 (Qld) explanatory notes

ECPLA (Postponement) Regulation

Electricity Competition and Protection Legislation Amendment (Postponement) Regulation 2015 (Qld) (SL 2015 No. 33)

Electricity Act Electricity Act 1994 (Qld)

Electricity Regulation Electricity Regulation 2006 (Qld)

EnergyAustralia EnergyAustralia Pty Ltd

Energy Locals Energy Locals Pty Ltd

ERM Power ERM Power Limited

EWON Energy and Water Ombudsman of New South Wales

EWOQ Energy and Water Ombudsman Queensland

excl. exclusive

(the) government Queensland Government

GST Goods and Services Tax

HEEAS Home Energy Emergency Assistance Scheme (Queensland)

HHI Herfindahl-Hirschman Index

incl. inclusive

IPART Independent Pricing and Regulatory Tribunal (NSW)

kWh kilowatt hours

Queensland Competition Authority Glossary

172

Lumo Energy Lumo Energy Pty Ltd

Minister Minister for Natural Resources, Mines and Energy (Queensland)

Mojo Power Mojo Power Pty Ltd

Momentum Energy Momentum Energy Pty Ltd

National Energy Retail Law or NERL

National Energy Retail Law (schedule to the National Energy Retail Law (South Australia) Act 2011 (SA))

National Energy Retail Regulations

National Energy Retail Regulations (under the National Energy Retail Law and section 12 of the National Energy Retail Law (South Australia) Act 2011 (SA))

National Energy Retail Rules or NERR

National Energy Retail Rules, version 7

NEM National Electricity Market

Next Business Energy or NBE Next Business Energy Pty Ltd

No. number

NSW New South Wales

OQPC Office of the Queensland Parliamentary Counsel

Origin Energy Origin Energy Pty Ltd

People Energy People Energy Pty Ltd

Powerdirect Powerdirect Pty Ltd

Powershop Powershop Pty Ltd

QCA Queensland Competition Authority

QEnergy QEnergy Limited

Qld Queensland

Red Energy Red Energy Pty Ltd

Sanctuary Energy Sanctuary Energy Pty Ltd

SEQ south east Queensland

Simply Energy Simply Energy Pty Ltd

SL subordinate legislation

TOU time of use

Queensland Competition Authority Appendix A: Minister's letter and direction notice

173

APPENDIX A: MINISTER'S LETTER AND DIRECTION NOTICE


174


175

Queensland Competition Authority Appendix B: Key assumptions in price monitoring

176

APPENDIX B: KEY ASSUMPTIONS IN PRICE MONITORING

Offers included in analysis

2015–16 and 2016–17

As we indicated in our market monitoring report for 2016–17, the offers we included in our analysis for the

2015–16 and 2016–17 years were those which were available on the last day of each quarter of those two

financial years.158 This meant that any offers which may have been available during a quarter(s), but which

were not available as at the last day of a quarter(s), were not included in our analysis. We adopted this

approach as it was consistent with other regulators' approaches to monitoring prices.159

2017–18

During 2017–18, a significant number of offers were published and expired by retailers within quarters; that

is, they were published after the first day of a quarter and expired before the last day of the quarter. To

provide a more complete analysis of generally available offers, we included these offers in our price

monitoring for 2017–18. We did not include expired offers with effective dates before 1 July 2017 in our

price monitoring on the basis that these did not reflect retailers' prices for the 2017–18 financial year.

Number of days in a year

We use 365.25 days in a financial year, consistent with our approach to market monitoring for 2016–17.

Annual bills—standing offers

We exclude the value of:

additional features offered by retailers which incur an additional charge (e.g. GreenPower)160

retailers' fees and charges which do not apply to all customers

solar feed-in tariffs.

Annual bills—market offers

We account for:

quantifiable one-off sign-up bonuses (reduction to bills)

guaranteed and conditional discounts (reduction to bills)

membership fees (addition to Mojo Power bills only).

We exclude the value of:

additional features offered by retailers which incur an additional charge (e.g. GreenPower)

retailers' fees and charges which do not apply to all customers

solar feed-in tariffs.

158 QCA 2017b, Appendix E. 159 See QCA 2016b, sections 2.2 and 2.3. 160 Retailers' GreenPower options are reported in Chapter 3, sections 3.4.1 and 3.4.2 (GreenPower sections).

Queensland Competition Authority Appendix B: Key assumptions in price monitoring

177

Some retailers' higher priced market offers may be for solar customers only. As retailers did not apply a

common approach to identifying solar-only offers in offers published on Energy Made Easy in 2017–18, we

did not remove any market offers from our analysis.

GST

All typical customer bills include GST unless otherwise specified.

Residential offers available to small business customers

AGL published a number of Home Office Everyday offers in 2017–18 for small business customers who

operated from home on a residential tariff. From February 2018, some of these offers were coded to small

business and residential customers in Energy Made Easy. We re-allocated the offers coded to small business

customers to the residential tariff reporting as the Home Office Everyday supply charge (100 cents per day)

and usage charge (26 cents per kilowatt hour) were the same as AGL's residential offers, and were lower

than the supply charge (134 cents per day) and usage charge (28 cents per kilowatt hour) on AGL's small

business offers.

Calculating annual bills using our published dataset

The table below shows how stakeholders can calculate annual bills using the datasets published on the QCA

website.

Calculating an annual bill

Supply costs

(retailer daily supply charges x 365.25)

+ Cost of electricity imported

(retailer usage charge x annual consumption level)

+ Membership fees – One-off sign up bonuses, guaranteed and conditional discounts

+ GST

Queensland Competition Authority Appendix C: Switching customers (location) full postcode data

178

APPENDIX C: SWITCHING CUSTOMERS (LOCATION) FULL POSTCODE

DATA

Residential customers

The table below shows all the location data provided by retailers for residential customers switching from

standing offers to market offers with their retailer in 2017–18.

Table 74 Switching residential customers, all postcodes, 2017–18

Postcode Number of customers switching

Total number of customers in postcode

Proportion of customers switching

4000 154 5,606 2.75%

4001 — 2 —

4005 302 9,416 3.21%

4006 185 6,382 2.90%

4007 245 6,925 3.54%

4008 7 140 5.00%

4009 — 8 —

4010 60 1,581 3.80%

4011 315 8,028 3.92%

4012 344 11,871 2.90%

4013 67 2,539 2.64%

4014 207 5,448 3.80%

4017 570 16,306 3.50%

4018 209 6,010 3.48%

4019 400 11,368 3.52%

4020 430 12,601 3.41%

4021 178 4,673 3.81%

4022 107 3,012 3.55%

4030 274 8,520 3.22%

4031 184 7,172 2.57%

4032 321 8,433 3.81%

4034 853 21,101 4.04%

4035 494 10,025 4.93%

4036 150 2,832 5.30%

4037 133 2,416 5.50%

4051 491 13,258 3.70%


179

4053 813 21,150 3.84%

4054 254 6,248 4.07%

4055 418 8,212 5.09%

4059 160 5,440 2.94%

4060 261 5,471 4.77%

4061 446 6,368 7.00%

4064 205 5,872 3.49%

4065 196 3,804 5.15%

4066 273 8,574 3.18%

4067 187 4,704 3.98%

4068 462 10,925 4.23%

4069 816 12,392 6.58%

4070 239 3,750 6.37%

4073 178 3,324 5.35%

4074 521 9,318 5.59%

4075 428 10,435 4.10%

4076 96 2,059 4.66%

4077 508 12,449 4.08%

4078 379 9,656 3.93%

4101 263 10,154 2.59%

4102 96 3,616 2.65%

4103 204 7,234 2.82%

4104 115 3,254 3.53%

4105 206 6,538 3.15%

4106 34 682 4.99%

4107 131 2,788 4.70%

4108 120 2,533 4.74%

4109 684 13,664 5.01%

4110 257 5,058 5.08%

4111 19 402 4.73%

4112 107 2,851 3.75%

4113 434 10,823 4.01%

4114 410 13,442 3.05%

4115 362 6,906 5.24%

4116 394 8,958 4.40%


180

4117 16 492 3.25%

4118 498 11,615 4.29%

4119 131 2,550 5.14%

4120 166 5,313 3.12%

4121 464 10,674 4.35%

4122 954 18,445 5.17%

4123 363 7,864 4.62%

4124 445 7,144 6.23%

4125 173 2,362 7.32%

4127 427 10,794 3.96%

4128 279 6,424 4.34%

4129 107 2,510 4.26%

4130 224 3,137 7.14%

4131 134 4,427 3.03%

4132 294 9,730 3.02%

4133 293 7,297 4.02%

4151 330 8,764 3.77%

4152 941 19,501 4.83%

4153 100 1,718 5.82%

4154 147 3,762 3.91%

4155 48 476 10.08%

4156 70 999 7.01%

4157 504 8,170 6.17%

4158 101 1,515 6.67%

4159 329 5,721 5.75%

4160 426 7,661 5.56%

4161 339 6,619 5.12%

4163 407 7,530 5.41%

4164 340 6,200 5.48%

4165 775 14,932 5.19%

4169 198 6,893 2.87%

4170 427 12,014 3.55%

4171 232 7,668 3.03%

4172 75 1,936 3.87%

4173 152 3,557 4.27%


181

4174 46 1,081 4.26%

4178 474 11,784 4.02%

4179 425 8,386 5.07%

4183 149 1,903 7.83%

4184 354 5,328 6.64%

4205 160 2,392 6.69%

4207 1,125 27,050 4.16%

4208 395 8,223 4.80%

4209 791 24,852 3.18%

4210 356 7,928 4.49%

4211 1,122 24,580 4.56%

4212 520 13,191 3.94%

4213 551 10,945 5.03%

4214 646 14,427 4.48%

4215 1,012 25,371 3.99%

4216 766 17,585 4.36%

4217 813 19,590 4.15%

4218 779 16,506 4.72%

4220 728 14,867 4.90%

4221 649 13,074 4.96%

4223 360 6,504 5.54%

4224 167 3,038 5.50%

4225 188 4,588 4.10%

4226 606 14,630 4.14%

4227 335 9,273 3.61%

4228 131 1,577 8.31%

4270 119 1,279 9.30%

4271 — 130 —

4272 213 3,018 7.06%

4275 82 1,257 6.52%

4280 388 6,376 6.09%

4285 519 8,758 5.93%

4287 17 339 5.01%

4300 874 24,158 3.62%

4301 368 12,706 2.90%


182

4303 70 1,690 4.14%

4304 390 8,596 4.54%

4305 1,251 29,087 4.30%

4306 895 14,225 6.29%

4307 50 615 8.13%

4309 126 1,395 9.03%

4310 195 2,416 8.07%

4311 255 4,390 5.81%

4312 98 1,423 6.89%

4313 88 1,207 7.29%

4340 134 2,230 6.01%

4341 385 5,836 6.60%

4342 65 1,083 6.00%

4343 305 4,946 6.17%

4344 87 954 9.12%

4346 33 390 8.46%

4347 43 556 7.73%

4350 1 33 3.03%

4352 142 1,454 9.77%

4507 597 11,222 5.32%

4508 307 8,672 3.54%

4509 374 13,169 2.84%

4510 836 23,716 3.53%

4511 170 4,255 4.00%

4512 68 1,118 6.08%

4514 143 2,565 5.58%

4515 86 1,706 5.04%

4516 81 1,270 6.38%

4517 24 289 8.30%

4518 107 2,154 4.97%

4519 162 3,424 4.73%

4520 309 4,969 6.22%

4521 90 1,762 5.11%

4550 62 1,976 3.14%

4551 1,385 31,230 4.43%


183

4552 251 4,444 5.65%

4553 156 2,343 6.66%

4554 42 715 5.87%

4555 97 2,533 3.83%

4556 795 19,966 3.98%

4557 361 10,167 3.55%

4558 420 11,665 3.60%

4559 109 2,255 4.83%

4560 667 15,840 4.21%

4561 155 2,759 5.62%

4562 154 3,620 4.25%

4563 184 4,202 4.38%

4564 198 5,597 3.54%

4565 300 7,527 3.99%

4566 251 6,316 3.97%

4567 382 9,120 4.19%

4568 88 1,512 5.82%

4569 33 718 4.60%

4570 960 18,018 5.33%

4571 18 381 4.72%

4572 95 2,418 3.93%

4573 543 15,133 3.59%

4574 41 623 6.58%

4575 489 12,636 3.87%

4580 172 3,123 5.51%

4581 52 1,183 4.40%

4670 — 1 —

4740 — 1 —

4745 — 1 —

4814 — 2 —

4850 — 1 —


184

Small business customers

The table below shows all the location data provided by retailers for small business customers switching

from standing offers to market offers with their retailer in 2017–18.

Table 75 Switching small business customers, all postcodes, 2017–18

Postcode Number of customers switching

Total number of customers in postcode

Proportion of customers switching

4000 61 2,357 2.59%

4001 — 1 0.00%

4005 39 910 4.29%

4006 89 2,239 3.97%

4007 26 1,095 2.37%

4008 4 200 2.00%

4009 14 415 3.37%

4010 19 586 3.24%

4011 45 912 4.93%

4012 23 629 3.66%

4013 15 408 3.68%

4014 32 929 3.44%

4017 37 715 5.17%

4018 — 103 0.00%

4019 26 1,039 2.50%

4020 30 822 3.65%

4021 6 364 1.65%

4022 — 118 0.00%

4030 22 803 2.74%

4031 11 341 3.23%

4032 25 480 5.21%

4034 42 1,562 2.69%

4035 15 386 3.89%

4036 1 70 1.43%

4037 1 55 1.82%

4051 38 1,051 3.62%

4053 22 1,243 1.77%

4054 5 291 1.72%

4055 3 200 1.50%

4059 18 465 3.87%


185

4060 8 400 2.00%

4061 2 152 1.32%

4064 43 1,235 3.48%

4065 9 230 3.91%

4066 24 1,029 2.33%

4067 18 421 4.28%

4068 34 996 3.41%

4069 13 422 3.08%

4070 3 67 4.48%

4073 16 312 5.13%

4074 22 722 3.05%

4075 22 750 2.93%

4076 20 668 2.99%

4077 27 603 4.48%

4078 6 115 5.22%

4101 48 2,063 2.33%

4102 79 846 9.34%

4103 16 591 2.71%

4104 8 280 2.86%

4105 18 727 2.48%

4106 12 602 1.99%

4107 16 433 3.70%

4108 29 1,052 2.76%

4109 37 680 5.44%

4110 25 1,021 2.45%

4111 — 5 —

4112 5 75 6.67%

4113 40 478 8.37%

4114 18 827 2.18%

4115 10 123 8.13%

4116 14 225 6.22%

4117 2 73 2.74%

4118 19 630 3.02%

4119 17 747 2.28%

4120 15 742 2.02%


186

4121 12 462 2.60%

4122 54 1,319 4.09%

4123 7 305 2.30%

4124 2 180 1.11%

4125 1 211 0.47%

4127 50 1,609 3.11%

4128 8 299 2.68%

4129 18 697 2.58%

4130 5 73 6.85%

4131 22 475 4.63%

4132 8 296 2.70%

4133 9 315 2.86%

4151 28 945 2.96%

4152 32 870 3.68%

4153 2 33 6.06%

4154 10 142 7.04%

4155 3 63 4.76%

4156 3 35 8.57%

4157 41 1,294 3.17%

4158 11 99 11.11%

4159 12 208 5.77%

4160 17 380 4.47%

4161 3 116 2.59%

4163 58 898 6.46%

4164 3 202 1.49%

4165 20 584 3.42%

4169 72 749 9.61%

4170 34 1,089 3.12%

4171 34 734 4.63%

4172 12 563 2.13%

4173 20 403 4.96%

4174 10 250 4.00%

4178 46 896 5.13%

4179 10 327 3.06%

4183 8 244 3.28%


187

4184 4 187 2.14%

4205 4 156 2.56%

4207 84 2,583 3.25%

4208 24 600 4.00%

4209 32 1,409 2.27%

4210 12 384 3.13%

4211 64 1,776 3.60%

4212 47 1,246 3.77%

4213 26 528 4.92%

4214 65 2,564 2.54%

4215 170 3,369 5.05%

4216 46 1,143 4.02%

4217 125 2,947 4.24%

4218 92 2,084 4.41%

4220 129 3,095 4.17%

4221 32 650 4.92%

4223 31 687 4.51%

4224 10 297 3.37%

4225 29 683 4.25%

4226 39 893 4.37%

4227 13 556 2.34%

4228 3 58 5.17%

4270 3 42 7.14%

4271 — 4 —

4272 17 371 4.58%

4275 10 160 6.25%

4280 13 332 3.92%

4285 45 876 5.14%

4287 7 94 7.45%

4300 25 1,133 2.21%

4301 11 493 2.23%

4303 4 84 4.76%

4304 26 486 5.35%

4305 53 1,820 2.91%

4306 25 706 3.54%


188

4307 12 158 7.59%

4309 3 252 1.19%

4310 11 336 3.27%

4311 22 461 4.77%

4312 6 169 3.55%

4313 12 215 5.58%

4340 9 297 3.03%

4341 15 406 3.69%

4342 11 219 5.02%

4343 45 815 5.52%

4344 7 135 5.19%

4346 2 33 6.06%

4347 12 136 8.82%

4350 — 4 0.00%

4352 2 116 1.72%

4500 58 2,377 2.44%

4501 5 421 1.19%

4502 3 144 2.08%

4503 12 629 1.91%

4504 12 428 2.80%

4505 7 462 1.52%

4506 8 509 1.57%

4507 26 702 3.70%

4508 13 400 3.25%

4509 15 754 1.99%

4510 41 1,751 2.34%

4511 5 183 2.73%

4512 8 155 5.16%

4514 10 265 3.77%

4515 8 261 3.07%

4516 4 93 4.30%

4517 3 39 7.69%

4518 10 145 6.90%

4519 23 427 5.39%

4520 10 308 3.25%


189

4521 10 183 5.46%

4550 4 120 3.33%

4551 48 2,166 2.22%

4552 18 516 3.49%

4553 — 160 —

4554 1 38 2.63%

4555 8 194 4.12%

4556 36 1,951 1.85%

4557 11 649 1.69%

4558 47 1,766 2.66%

4559 11 219 5.02%

4560 37 1,377 2.69%

4561 16 388 4.12%

4562 6 228 2.63%

4563 10 334 2.99%

4564 10 398 2.51%

4565 7 331 2.11%

4566 29 1,266 2.29%

4567 19 988 1.92%

4568 4 116 3.45%

4569 — 12 —

4570 84 2,060 4.08%

4571 2 33 6.06%

4572 1 74 1.35%

4573 32 1,050 3.05%

4574 8 139 5.76%

4575 37 1,344 2.75%

4580 12 208 5.77%

Queensland Competition Authority References

190

REFERENCES

General references

Alinta Energy 2018, Canstar Blue: 5-star Alinta Energy has the most satisfied customers in Queensland, news release, 29 January.

Australian Competition and Consumer Commission (ACCC) 2016, Ban on excessive payment surcharging, media update, 26 May.

––– 2017, Retail Electricity Pricing Inquiry, preliminary report, September.

—— 2018a, ACCC takes action against Click Energy for misleading savings claims, media release, 9 July.

—— 2018b, Restoring electricity affordability and Australia's competitive advantage, final report, June.

—— 2018c, ACCC takes action against Europcar for excessive card payment surcharges, media release, 25 July.

—— 2018d, ACCC to monitor and report on electricity prices, media release, 21 August.

Australian Energy Market Commission (AEMC) 2017, 2017 AEMC Retail Energy Competition Review, final report, July.

—— 2018a, 2018 AEMC Retail Energy Competition Review, final report, June.

––– 2018b, National Energy Retail Amendment (Preventing discounts on inflated energy rates) Rule 2018, consultation paper, March.

—— 2018c, National Energy Retail Amendment (Preventing discounts on inflated energy rates) Rule 2018, rule determination, May.

—— 2018d, National Electricity Amendment (Metering Installation Timeframes) Rule 2018, National Energy Retail Amendment (Metering Installation Timeframes) Rule 2018, consultation paper, May.

Australian Energy Regulator (AER) 2015, AER Retail Pricing Information Guidelines, version 4.0, August.

—— 2017a, Notice of Draft Instrument: AER (Retail) Performance Reporting Procedures & Guidelines Version 3, December.

—— 2017b, Annual Report on Compliance & Performance of the Retail Energy Market 2016–17, annual report, November.

—— 2017c, State of the Energy Market, May.

—— 2018a, Notice of Final instrument: AER Retail Pricing Information Guidelines Version 5, April.

—— 2018b, AER removes retail performance data from its website, communication notice, 11 September.

—— 2018c, AER (Retail Law) Performance Reporting Procedures and Guidelines, version 3, April.

—— 2018d, Final instrument: Amendments to AER (Retail) Performance Reporting Procedures & Guidelines Version 3, April.

—— 2018e, Retail electricity prices - Determination of a default market offer price, news release, 23 October.


191

—— 2019, Retail energy market performance update for Quarter 1 2018–19, retail energy market update, 25 January.

Brattle Group 2018, International Experiences in Retail Electricity Markets: Consumer Issues, report for ACCC, June.

Colmar Brunton 2018, Consumer Outcomes in the National Retail Electricity Market, report for ACCC, June.

Competition Markets Authority 2016, Energy Market Investigation, final report.

Deloitte 2018, Alinta Energy’s impact on competition in the South East Queensland retail electricity market, report for Alinta Energy, 10 July.

Energex 2017a, Energex Annual Pricing Proposal 1 July 2017 to 30 June 2018, annual pricing proposal (AER approved), May.

—— 2017b, Energex Network Tariff Guide 1 July 2017 to 30 June 2018, June.

—— 2018, Energex Network tariff Guide 1 July 2018 to 30 June 2019, July.

Energy and Water Ombudsman New South Wales (EWON) 2017, submission to AER, Customer price information review, October.

Energy and Water Ombudsman Queensland (EWOQ) 2018, Annual Report 2017–18, September.

Grattan Institute 2017, Price Shock—Is the retail electricity market failing consumers?, Grattan Institute, March.

Independent Pricing and Regulatory Tribunal (IPART) 2017a, Review of the performance and competitiveness of the retail electricity market in NSW from 1 July 2016 to 30 June 2017, final report, November.

—— 2017b, submission to the ACCC, Retail electricity supply and pricing inquiry, June.

—— 2018a, Review of the performance and competitiveness of the retail energy market in NSW from 1 July 2017 to 30 June 2018, draft report, October.

—— 2018b, Retailers' metering practices in NSW, draft report, October.

Interdepartmental Committee on Electricity Sector Reform 2013, Report to Government, May.

KPMG 2017, Energy retail markets – An international review: A report for the Victorian Department of Environment, Land, Water and Planning, April.

Littlechild, S 2017, 'Competition and Price Controls in the UK Retail Energy Market' in Network, ACCC publication for the Utility Regulators Forum, issue 63, June.

Nelson, T, McCracken-Hewson, E, Whish-Wilson, P & Bashir, S 2018, 'Price dispersion in Australian retail electricity markets', Energy Economics, vol. 70(C), pages 158–69.

Newgate Research 2017, Consumer Research for the Australian Energy Market Commission's 2017 Retail Competition Review, final report, April.

Ofgem 2016, 'Modification of electricity and gas supply licences to remove certain RMR Simpler Tariff Choices rules', open letter, September.

Queensland Competition Authority (QCA) 2014, Regulated retail electricity prices 2014–15, final determination, May.


192

—— 2016a, Regulated retail electricity prices for 2016–17, final determination, May.

—— 2016b, SEQ retail electricity market monitoring 2016–17, scoping paper, October.

—— 2017a, submission to the AER, Customer price information review, October.

—— 2017b, SEQ retail electricity market monitoring: 2016–17, market monitoring report, November.

—— 2017c, Regulated retail electricity prices for 2017–18, final determination, June.

—— 2017d, Retail electricity prices in south east and regional Queensland, Ministerial advice, November.

—— 2018a, Regulated retail electricity prices for 2018–19, final determination, May.

—— 2018b, submission to the AER, Draft retail pricing guidelines, March.

—— 2018c, Solar feed-in tariff report 2017–18, monitoring report, October.

—— 2018d, SEQ retail electricity market monitoring: January to March 2018, market monitoring report, April.

—— 2018e, SEQ retail electricity market monitoring: April to June 2018, market monitoring report, July.

Queensland Government 2018, Budget Strategy and Outlook, Budget paper No.2, Appendix A: Concessions statement.

Simshauser, P and Whish-Wilson, P 2015, Reforming reform: differential pricing and price dispersion in retail electricity markets, AGL Applied Economic and Policy Research Working Paper No.49, June.

The Hon. Beattie, P and the Hon. Bligh, A 2006, State's Future Growth Fund gets a $1.3B Kick, media release, Queensland Government, 27 November.

The Hon. Beattie, P, the Hon. Bligh, A & the Hon. Wilson W 2007, Qld Future Fund tops $3B with AGL Sale: Beattie, media release, Queensland Government, 19 February.

The Hon. Morrison, S and the Hon. Frydenberg, J 2018, Driving power prices down, media release, 20 August.

Thwaites, Professor J, Faulkner AO, P & Mulder, T 2017, Independent Review into the Electricity & Gas Retail Markets in Victoria, August.

Yarrow, G 2008, Report on the impact of maintaining price regulation, report for the AEMC, January.

Legislation

Competition and Consumer Act 2010 (Cth)

Electricity Act 1994 (Qld)

Electricity and Other Legislation (Batteries and Premium Feed-in Tariff) Amendment Act 2018 (Qld)

Electricity and Other Legislation (Batteries and Premium Feed-in Tariff) Amendment Bill 2018 (Qld) explanatory notes

Electricity Competition and Protection Legislation Amendment Act 2014 (Qld)

Electricity Competition and Protection Legislation Amendment Act 2014 (Qld) Proclamation (SL 2015 No. 32)

Electricity Competition and Protection Legislation Amendment Bill 2014 (Qld) explanatory notes


193

Electricity Competition and Protection Legislation Amendment (Postponement) Regulation 2015 (Qld) (SL 2015 No. 33)

National Energy Retail Law (South Australia) Act 2011 (SA)

National Energy Retail Regulations

National Energy Retail Rules Version 12 [as at 10 April 2018]

Penalties and Sentences Act 1992 (Qld)

Penalties and Sentences Regulation 2015 (Qld)

Queensland Competition Authority Act 1997 (Qld)

updated market monitoring report - qca

Documents