Energy retailers bracing for Labor royal commission over soaring household power prices

ENERGY retailers are increasingly worried they will be the next target of a royal commission amid growing public anger over the rising costs of household power bills.

ENERGY retailers are increasingly worried they will be the next target of a royal commission amid growing public anger over the rising costs of household power bills.

Surging electricity and gas bills have put the behaviour of energy companies in the spotlight with the community and has divided the Turnbull government over efforts to bring down prices.

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Labor could campaign on a royal commission into household energy bills at the next election.

Huge increases in retail and network charges have pushed up the average Victorian household’s power bill by almost $400 in the past decade.

Several well-placed industry sources have told the Herald Sun they fear an incoming Shorten Labor government will instigate a wide-ranging probe into energy retailers — similar to its fierce attack on the big banks — after warnings from consumer watchdogs they are not doing enough to help customers understand and compare costs.

A senior Labor source told the Herald Sun an inquiry was not on the agenda right now but left the option open.

“Things can change. Electricity will be a big focus for us,” the source said.

A recent Australian Energy Market Commission review of national retail energy competition has found that high electricity prices and complicated and confusing energy offers have pushed consumer confidence levels to record low levels.

The review found that only one in four consumers now say energy retailers are working in their long-term interests, down 10 per cent from last year.

One industry source said of a royal commission: “I don’t see any votes in protecting the industry from what would be a populist move”.

“A couple of players on the transmission side arguably have a great deal of market power, which is keeping prices up.

Retailers are already bracing for a report from the Australian Competition and Consumer Commission that is expected to urge tough measures to help customers get a better deal.

Energy Minister Josh Frydenberg and Prime Minister Malcolm Turnbull talked tough to power companies last year over costs. (AAP Image/Mick Tsikas)

The competition watchdog’s damning report earlier in the year blamed energy retailers and government inaction for crippling family budgets.

After being read the Riot Act from Prime Minister Malcolm Turnbull last year, EnergyAustralia, Origin Energy and AGL Energy all put versions of a fixed-rate offer customer contract.

Federal Energy Minister Josh Frydenberg has also urged power companies to cut their retail tariffs, pointing to sharp falls in wholesale electricity prices from their peaks a year ago.

Electricity retailers have also agreed to contact 1.7 million customers to let them know they are not on the best plans and are paying too much.

At the government’s request they have also been forced to produce clearer, more user-friendly information so it is easier for customers to find the best deal.