RAA announce entry into energy market with RAA Energy

One of South Australia’s most recognisable names is making an entry into a new market, promising fair and transparent electricity plans.

The RAA has announced it will enter the energy market later this year with the launch of RAA Energy.

Promising customers a trusted, fair and transparent energy plan, the RAA hopes to avoid some of the questionable practices used in the energy market, by suppliers, to sign customers.

It comes as the ACCC’s Inquiry into the National Electricity Market report (December 2023) shows nearly 80 per cent of residential customers could be paying less for electricity.

RAA chief executive Nick Reade said the message was clear, “sky-high” electricity bills, high conditional discounts and convoluted plans were placing significant pressures on household budgets.

“When 79 per cent of people could be paying less for their electricity, something is fundamentally wrong,” he said.

RAA chief executive Nick Reade said they would launch an everyday energy plan that is different to what other retailers are offering. Picture: NCA NewsWire / Naomi Jellicoe

“The energy market is complex, and most people don’t have time to understand it or shop around and that’s what the big retailers prey on.”

Earlier this year, the national energy regulator announced cuts to energy prices for residential customers.

From July 2024, the average SA household could expect to save a minimum of $63 per annum – representing a 2.8 per cent reduction in default energy prices.

While the discounts announced represent the minimum amount of savings consumers could expect to receive – or an energy price ceiling – Energy Minister Tom Koutsantonis urged South Australians to visit the government’s Energy Made Easy website, to shop around for greater savings.

But Mr Reade explains that historically, choosing an electricity provider was a ‘set and forget’ task.

Whereas in the current energy market, retailers are incentivised to compete for customers at the point of acquisition, failing to offer competitive prices to existing customers.

“Some retailers lure customers in with a competitive price only to increase it over time and just bank on them not shopping around, effectively punishing loyalty,” Mr Reade said.

The ACCC agrees, its December report suggests “retailers recoup their costs over a customer’s lifetime, by setting attractively low acquisition offers and making subsequent unilateral price increases for their existing customer base over time.

“The accrual of these price increases over time explains why so many customers are on plans at or above the default offers.”

This was especially true for people who face literacy or language barriers when engaging with the energy market and don’t change plans often.

While scant on details, Mr Reade indicated RAA Energy will launch an everyday plan that is “different to what other retailers are offering”, later in the year – along with other energy services.

He also promised members more feedback and details around their energy use to help them make informed decisions.

“Unlike many national energy retailers, the RAA isn’t out to make a profit for shareholders,” Mr Reade said.

“Our members will be able to access competitive electricity rates for a fixed monthly fee.

“We’ll provide consumers a free smart metre, and over time be able to give them personalised insights, along with other benefits like solar assessments, aimed at helping South Australians reduce their energy use and bills.