Power companies pledge to push down prices in Energy Charter
They’ve finally admitted what we’ve known all along — electricity prices are too damn high. Now, company bosses are using an Energy Charter to promise they’ll do better.
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Major energy companies admit their prices are too high as they pledge to be more transparent about what they are doing to improve customer relations.
“Energy prices are higher than customers expect, and energy pricing has become confusing,” Origin Energy chief executive Frank Calabria said.
The proliferation of offers with varying terms and conditions have made it “hard for consumers to confidently choose a retailer”, he said.
In a similar frame, AGL chief executive Brett Redman said his company recognised it had to change.
“High energy prices have had an impact on our customers and there are concerns about energy security as old technology is replaced with modern technology,” he said.
“We know we need to do more.”
AGL and Origin are among 18 companies which have joined an initiative called the Energy Charter.
The charter was formed in January in recognition that companies needed to address concerns of customers as the energy sector undergoes massive transformation.
The charter has five principles including improving affordability and delivering energy safely, sustainably and reliably.
Companies which sign up to the charter commit to publish reports measuring their performance against the principles — with the first batch of reports released this weekend.
“This is a milestone for the Australian energy industry,” said John Cleland, chair of the Energy Charter council and chief executive of NSW distribution company Essential Energy.
“ … We have recognised that there’s a long way to go in this space, and that things won’t change overnight, but this is an important shift towards a greater understanding of customer needs.”
AGL has a 39 per cent market share of residential electricity customers in South Australia and 29 per cent of the gas market.
Origin has 26 per cent of residential electricity and 43 per cent of gas customers.
Mr Redman said AGL had been working to improve performance and in recognition had tied senior executives’ pay to customer advocacy benchmarks.
Broad steps to improve affordability included making “major investments in power generation and gas facilities in order to improve supply and reduce wholesale prices, as well as making major investments to improve customer outcomes in retail markets”.
“Following on from a number of year-on-year increases in energy prices due to increases in costs across the supply chain, over the last two years, AGL has not increased its electricity prices,” the report said.
Origin said it too was making significant investments to increase electricity supply as well as assisting retail customers through deals such as increasing the discount for 54,000 households on the SA Government Concessions Energy Discount Offer.
“Customers have experienced higher electricity prices in recent years driven by rising wholesale electricity costs caused by the rapid and unexpected retirement of coal-fired power stations,” Origin said.
“The resulting tight supply-demand balance has been compounded by high market prices for
generation fuels such as coal and gas.”
The 18 companies reports will now be assessed by an independent Accountability Panel
chaired by Wendy Craik, whose numerous roles include being a Reserve Bank board member, chair of the Climate Change Authority and former head of the Murray-Darling Commission.
Also on the panel are Australian Council of Social Service chief executive Cassandra Goldie and former Business Council of Australia energy adviser Philip Weickhardt.
The Accountability Panel is due to report in late November on how the companies measure up.