Market Monitoring Report. SEQ retail electricity market monitoring:

Transcription

1 Market Monitoring Report SEQ retail electricity market monitoring: November 2018

2 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 2018 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 2 and this material remains unaltered.

3 Contents Contents EXECUTIVE SUMMARY THE ROLE OF THE QCA TASK AND CONTACTS III V 1 INTRODUCTION Retail electricity market monitoring in south east Queensland This report Retailers operating in SEQ 1 2 PRICE MONITORING Background Minister's Direction QCA methodology QCA monitoring Distribution non-network charges Conclusion 47 3 DISCOUNTS, SAVINGS AND BENEFITS Background Minister's Direction QCA methodology QCA monitoring Conclusion 96 4 RETAIL FEES Background Minister's Direction QCA methodology QCA monitoring GST on fees Fees that 'may' have applied Additional fee information on Energy Made Easy Conclusion PRICE TRENDS Minister's Direction QCA methodology QCA monitoring Conclusion SWITCHING TO MARKET OFFERS Background 116 i

4 Contents 6.2 Minister's Direction QCA methodology QCA monitoring Conclusion HARDSHIP, REBATE AND HEEAS CUSTOMERS Background Minister's Direction QCA methodology QCA monitoring Conclusion NEW RETAIL TARIFFS AND PLANS Background Minister's Direction QCA methodology QCA monitoring Conclusion MARKET COMPETITIVENESS Minister's Direction QCA methodology QCA commentary Conclusion SIGNIFICANT ISSUES Minister's Direction Background QCA methodology QCA monitoring Conclusion 167 GLOSSARY 168 APPENDIX A : MINISTER'S LETTER AND DIRECTION NOTICE 170 APPENDIX B : KEY ASSUMPTIONS IN PRICE MONITORING 173 Offers included in analysis 173 Number of days in a year 173 Annual bills standing offers 173 Annual bills market offers 173 GST 174 Residential offers available to small business customers 174 Calculating annual bills using our published dataset 174 APPENDIX C : SWITCHING CUSTOMERS (LOCATION) FULL POSTCODE DATA 175 REFERENCES 187 ii

5 Executive Summary 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 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 Standing offer bills were generally more expensive than market offer bills in each quarter of 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 that were cheaper for a typical SEQ customer than their cheapest market offers in the June quarter of Discounting Many retailers attached discounts of some form to their market offers in 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 , compared to , when incentives related mostly to signing up online. However, discounting on market offers was again very complex in , as in 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 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 As in , 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 to The difference between the average lowest and the average highest market offer bills has also increased, in particular since The largest bill increases usually took place in the September quarter. In the last three quarters of , the average lowest offer bills decreased for each of the three residential customer tariffs and tariff combinations. iii

6 Executive Summary Switching to market offers The number of customers moving from standing offers to market offers with their retailer in increased significantly compared to , 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 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 These customers generally paid bills based on prices that were similar to the average of those prices available on Energy Made Easy. New retail tariffs and plans A small number of new retail tariff plans emerged in Some retailers attached new incentives and benefits to their offers in ; we consider these to also be new types of retail plans. Market competitiveness Increased rivalry between retailers to offer better deals to customers in followed Alinta Energy's entry in to the SEQ market in August 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 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. iv

7 The Role of the QCA Task and Contacts 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 Contacts Enquiries regarding this project should be directed to: Attention: Contact: Mr Shannon Murphy v

8 Introduction 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 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 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 (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 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 See the Minister's letter in Appendix A. 1

9 Introduction Table 1 Retailers with residential and small business offers in SEQ, 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 and a dash ( ) indicates the retailer did not publish any offers on Energy Made Easy for for the applicable small customer type. Not all retailers had offers published in each quarter of 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, Source: Energy Made Easy. 2

10 Price monitoring 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 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 that were cheaper for a typical SEQ customer than their cheapest market offers in the June quarter of Background 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 NERR 7 ) 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 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 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 QCA 2018a, section National Energy Retail Law, section 62; Energy Made Easy website. 3

11 Price monitoring 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 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 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 , 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 QCA methodology 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 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. These are the same tariffs and tariff combinations we reported on in our market monitoring report for 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 See Appendix B (offers included in analysis) for more detail. 4

12 Price monitoring 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 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 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 The datasets of offers on our website also allow solar customers to calculate and compare bills taking into account solar feed-in tariffs In our submissions to the AER's review of its retail pricing information guidelines, and our solar feed-in tariff report for , 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

13 Price monitoring 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 , 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 Distribution non-network charges Retailers' offers published on Energy Made Easy for generally included some distribution non-network charges. The AER's retail pricing information guidelines (which applied in ) 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 , 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 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, Energy Made Easy, AGL offers ( ). In our solar feed-in tariff report for , 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 , see Energex 2017b, section 3.5 (and the historic pricing publications page of Energex's website). 14 Energy Made Easy, ERM Power offers ( ). 15 QCA 2017b, section AER 2015, section

14 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 7

15 Price monitoring 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 $1,837 (Click Energy Connect Tariff 11 Only). December quarter In the December quarter, 19 retailers had offers for the residential flat rate tariff on Energy Made Easy. All 19 retailers had standing offers and 14 had at least one market offer on Energy Made Easy. Table 4 Bills for a typical residential flat rate customer, December quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,513 Dodo Power & Gas 1,720 1,463 1,463 1,463 EnergyAustralia 1,655 1,476 1,418 1,560 Energy Locals 1,554 1,425 1,425 1,425 Lumo Energy 1,520 Mojo Power 1,837 1,598 1,515 1,681 Origin Energy 1,553 1,434 1,328 1,553 People Energy 1,461 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 Sanctuary Energy 1,607 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. Sources: Energy Made Easy; QCA analysis. 8

16 Price monitoring Figure 2 Bills for a typical residential flat rate customer, December quarter 2017 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 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 $1,837 (Click Energy Connect Tariff 11 Only). March quarter In the March quarter, 21 retailers had residential flat rate tariff offers on Energy Made Easy. Of these retailers, 16 had at least one market offer on Energy Made Easy. Table 5 Bills for a typical residential flat rate customer, March quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,513 Dodo Power & Gas 1,720 1,404 1,345 1,463 EnergyAustralia 1,655 1,443 1,323 1,560 9

17 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) Energy Locals 1,554 1,425 1,425 1,425 Lumo Energy 1,520 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 People Energy 1,461 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 Sanctuary Energy 1,607 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. Sources: Energy Made Easy; QCA analysis. Figure 3 Bills for a typical residential flat rate customer, March quarter 2018 $2,100 $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 10

18 Price monitoring The March 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 $1,188 (AGL Set and Forget) to $2,009 (Click Energy Natural Tariff 11 Only). June quarter In the June quarter, 21 retailers had residential flat rate tariff offers on Energy Made Easy. Of these retailers, 16 had at least one market offer on Energy Made Easy. Table 6 Bills for a typical residential flat rate customer, June quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,513 Dodo Power & Gas 1,720 1,345 1,345 1,345 EnergyAustralia 1,655 1,400 1,273 1,560 Energy Locals 1,554 1,425 1,425 1,425 Lumo Energy 1,520 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 1,436 1,328 1,553 People Energy 1,461 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 Sanctuary Energy 1,607 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. Sources: Energy Made Easy; QCA analysis. 11

19 Price monitoring Figure 4 Bills for a typical residential flat rate customer, June quarter 2018 $2,100 $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The June 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 $2,033 (QEnergy Home Your Way Single Rate) market offer bills ranged from $1,188 (AGL Set and Forget) to $2,009 (Click Energy 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 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: 12

20 Price monitoring 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 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 were cheaper than the Simply Energy offer in the June quarter of 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 The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in Table 7 Quarterly changes in lowest market offer bill for a typical residential flat rate customer, Retailer December quarter (%) March quarter (%) June quarter (%) 1st Energy (a) 6.5 (b) 0.0 AGL Alinta Energy Amaysim Energy n/a Click Energy Dodo Power & Gas EnergyAustralia Energy Locals Mojo Power Next Business Energy 0.0 Origin Energy Powerdirect Powershop QEnergy Red Energy Simply Energy QCA 2017b, section (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 report. 13

21 Price monitoring (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. Sources: Energy Made Easy; QCA analysis. The table shows that most retailers published new offers during 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 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 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,966 Dodo Power & Gas 2,149 1,811 1,811 1,811 EnergyAustralia 2,035 1,887 1,755 2,035 Energy Locals 1,890 1,859 1,906 Lumo Energy 1,896 Mojo Power 2,193 1,953 1,870 2,036 Origin Energy 1,921 1,817 1,747 1,921 People Energy 1,746 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 Sanctuary Energy 1,933 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. 14

22 Price monitoring Sources: Energy Made Easy; QCA analysis. Figure 5 Bills for a typical residential flat rate with controlled load super economy customer, September quarter 2017 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The September quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,746 (People Energy Standing Retail Contract) to $2,413 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,567 (Alinta Energy Home Saver Plus (Residential Single 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. 15

23 Price monitoring Table 9 Bills for a typical residential flat rate with controlled load super economy customer, December quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,882 Dodo Power & Gas 2,149 1,811 1,811 1,811 EnergyAustralia 2,035 1,806 1,724 1,910 Energy Locals 2,000 1,859 1,859 1,859 Lumo Energy 1,896 Mojo Power 2,193 1,953 1,870 2,036 Origin Energy 1,921 1,767 1,639 1,921 People Energy 1,746 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 Sanctuary Energy 1,933 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. Sources: Energy Made Easy; QCA analysis. 16

24 Price monitoring Figure 6 Bills for a typical residential flat rate with controlled load super economy customer, December quarter 2017 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The December table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,746 (People Energy Standing Retail Contract) to $2,413 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,567 (Alinta Energy Home Saver Plus (Residential Single Rate with Controlled Load 1)) to $2,403 (Click Energy Connect Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). March quarter In the March quarter, 20 retailers had offers that combined a residential flat rate tariff with a controlled load super economy tariff on Energy Made Easy. For this tariff combination, 15 of the retailers had at least one market offer on Energy Made Easy. Table 10 Bills for a typical residential flat rate with controlled load super economy customer, March quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,882 17

25 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) Dodo Power & Gas 2,149 1,733 1,654 1,811 EnergyAustralia 2,035 1,760 1,600 1,910 Energy Locals 2,000 1,859 1,859 1,859 Lumo Energy 1,896 Mojo Power 2,193 2,012 1,952 2,072 Momentum Energy 1,865 Origin Energy 1,921 1,735 1,639 1,921 People Energy 1,746 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 Sanctuary Energy 1,933 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. Sources: Energy Made Easy; QCA analysis. Figure 7 Bills for a typical residential flat rate with controlled load super economy customer, March quarter 2018 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 18

26 Price monitoring The March quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,746 (People Energy Standing Retail Contract) to $2,413 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,476 (AGL Set and Forget) to $2,629 (Click Energy Natural Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). June quarter In the June quarter, 20 retailers had offers that combined a residential flat rate tariff with a controlled load super economy tariff on Energy Made Easy. For this tariff combination, 15 of the retailers had at least one market offer on Energy Made Easy. Table 11 Bills for a typical residential flat rate with controlled load super economy customer, June quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,882 Dodo Power & Gas 2,149 1,654 1,654 1,654 EnergyAustralia 2,035 1,702 1,550 1,910 Energy Locals 2,000 1,859 1,859 1,859 Lumo Energy 1,896 Mojo Power 2,193 2,012 1,952 2,072 Momentum Energy 1,865 Origin Energy 1,921 1,770 1,639 1,921 People Energy 1,746 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 Sanctuary Energy 1,933 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. Sources: Energy Made Easy; QCA analysis. 19

27 Price monitoring Figure 8 Bills for a typical residential flat rate with controlled load super economy customer, June quarter ,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The June quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,746 (People Energy Standing Retail Contract) to $2,654 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,476 (AGL Set and Forget) to $2,629 (Click Energy Natural Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). QCA assessment Retailers with offers on Energy Made Easy 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. Five retailers Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy published standing offers for this tariff combination on Energy Made Easy but did not publish a corresponding market offer during the year. 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: Alinta Energy's Home Saver Plus (Residential Single Rate with Controlled Load 1) market offer ($1,567) in the September quarter 20

28 Price monitoring AGL's Set and Forget market offer ($1,476) 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 compared to June quarter 2017 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 were cheaper than the EnergyAustralia offer in the June quarter of 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 $1,153. Fifteen retailers had at least one market offer for this tariff combination available in The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in Table 12 Quarterly changes in lowest market offer bill for a typical residential flat rate with controlled load super economy customer, Retailer December quarter (%) March quarter (%) June quarter (%) 1st Energy (a) 7.3 (b) 0 AGL Alinta Energy Amaysim Energy Click Energy Dodo Power & Gas EnergyAustralia Energy Locals Mojo Power Origin Energy Powerdirect Powershop QEnergy Red Energy Simply Energy QCA 2017b, section (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 report. The 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. 21

29 Price monitoring (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. Sources: Energy Made Easy; QCA analysis. The table shows that most retailers published new offers during 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 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 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,912 Dodo Power & Gas 2,082 1,758 1,758 1,758 EnergyAustralia 1,976 1,834 1,707 1,976 Energy Locals 1,761 1,761 1,761 Lumo Energy 1,841 Mojo Power 2,101 1,861 1,778 1,944 Origin Energy 1,869 1,769 1,701 1,869 People Energy 1,743 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 Sanctuary Energy 1,929 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. Sources: Energy Made Easy; QCA analysis. 22

30 Price monitoring Figure 9 Bills for a typical residential flat rate with controlled load economy customer, September quarter 2017 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The September quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,743 (People Energy Standing Retail Contract) to $2,287 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,526 (Alinta Energy Home Saver Plus (Residential Single Rate with Controlled Load 2)) to $2,281 (Click Energy Connect Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). December quarter In the December quarter, 19 retailers had offers that combined a residential flat rate tariff with a controlled load economy tariff on Energy Made Easy. All retailers had a standing offer, and 14 had at least one market offer on Energy Made Easy. Table 14 Bills for a typical residential flat rate with controlled load economy customer, December quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 23

31 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) Diamond Energy 1,831 Dodo Power & Gas 2,082 1,758 1,758 1,758 EnergyAustralia 1,976 1,755 1,677 1,856 Energy Locals 1,918 1,761 1,761 1,761 Lumo Energy 1,841 Mojo Power 2,101 1,861 1,778 1,944 Origin Energy 1,869 1,721 1,595 1,869 People Energy 1,743 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 Sanctuary Energy 1,929 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. Sources: Energy Made Easy; QCA analysis. Figure 10 Bills for a typical residential flat rate with controlled load economy customer, December quarter 2017 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 24

32 Price monitoring The December quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,743 (People Energy Standing Retail Contract) to $2,287 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,526 (Alinta Energy Home Saver Plus (Residential Single Rate with Controlled Load 2)) to $2,281 (Click Energy Connect Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). March quarter In the March quarter, 20 retailers had offers that combined a residential flat rate tariff with a controlled load economy tariff on Energy Made Easy. For this tariff combination, 15 of the retailers had at least one market offer on Energy Made Easy. Table 15 Bills for a typical residential flat rate with controlled load economy customer, March quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,831 Dodo Power & Gas 2,082 1,682 1,607 1,758 EnergyAustralia 1,976 1,711 1,557 1,856 Energy Locals 1,918 1,761 1,761 1,761 Lumo Energy 1,841 Mojo Power 2,101 1,920 1,860 1,980 Momentum Energy 1,806 Origin Energy 1,869 1,689 1,595 1,869 People Energy 1,743 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 Sanctuary Energy 1,929 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. 25

33 Price monitoring Sources: Energy Made Easy; QCA analysis. Figure 11 Bills for a typical residential flat rate with controlled load economy customer, March quarter 2018 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. The March quarter table and graph show that for a typical customer on this tariff combination: standing offer bills ranged from $1,743 (People Energy Standing Retail Contract) to $2,287 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,436 (AGL Set and Forget) to $2,495 (Click Energy Natural Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). June quarter In the June quarter, 20 retailers had offers that combined a residential flat rate tariff with a controlled load economy tariff on Energy Made Easy. For this tariff combination, 15 of the retailers had at least one market offer on Energy Made Easy. Table 16 Bills for a typical residential flat rate with controlled load economy customer, June quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 1,831 26

34 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) Dodo Power & Gas 2,082 1,607 1,607 1,607 EnergyAustralia 1,976 1,655 1,507 1,856 Energy Locals 1,918 1,761 1,761 1,761 Lumo Energy 1,841 Mojo Power 2,101 1,920 1,860 1,980 Momentum Energy 1,806 Origin Energy 1,869 1,723 1,595 1,869 People Energy 1,743 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 Sanctuary Energy 1,929 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. Sources: Energy Made Easy; QCA analysis. Figure 12 Bills for a typical residential flat rate with controlled load economy customer, June quarter 2018 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 27

35 Price monitoring The June quarter table and graph show that for a typical residential flat rate tariff with controlled load economy customer: standing offer bills ranged from $1,743 (People Energy Standing Retail Contract) to $2,516 (QEnergy Home Your Way (Single Rate + Controlled Load)) market offer bills ranged from $1,436 (AGL Set and Forget) to $2,495 (Click Energy Natural Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)). QCA assessment Retailers with offers on Energy Made Easy 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. Five retailers Diamond Energy, Lumo Energy, Momentum Energy, People Energy and Sanctuary Energy published standing offers for this tariff combination on Energy Made Easy but did not publish a corresponding market offer during the year. 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: Alinta Energy's Home Saver Plus (Residential Single Rate with Controlled Load 2) market offer ($1,526) in the September quarter AGL's Set and Forget market offer ($1,436) 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 compared to June quarter 2017 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 were cheaper than the EnergyAustralia offer in the June quarter of 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 $1,059. Fifteen retailers had at least one market offer for this tariff combination available in The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in QCA 2017c, section (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 report. 28

36 Price monitoring Table 17 Quarterly changes in lowest market offer bill for a typical residential flat rate with controlled load economy customer, Retailer December quarter (%) March quarter (%) June quarter (%) 1st Energy (a) 6.8 (b) 0 AGL Alinta Energy Amaysim Energy Click Energy Dodo Power & Gas EnergyAustralia Energy Locals Mojo Power Origin Energy Powerdirect Powershop QEnergy Red Energy Simply Energy (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. Sources: Energy Made Easy; QCA analysis. The table shows that most retailers published new offers during 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 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. 29

37 Price monitoring Table 18 Bills for a typical small business flat rate customer, September quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 2,430 EnergyAustralia 2,478 2,265 2,140 2,379 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. Sources: Energy Made Easy; QCA analysis. Figure 13 Bills for a typical small business flat rate customer, September quarter 2017 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 Low market offer High market offer Standing offer 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. 30

38 Price monitoring Sources: Energy Made Easy; QCA analysis. 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 $2,593 (QEnergy Biz Saver Single Rate 24 Months). December quarter In the December quarter, 16 retailers had small business flat rate offers on Energy Made Easy. For this tariff, 15 of the retailers had standing offers, and 14 retailers had at least one market offer, on Energy Made Easy. Table 19 Bills for a typical small business flat rate customer, December quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 2,326 EnergyAustralia 2,478 2,295 2,240 2,379 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. Sources: Energy Made Easy; QCA analysis. 31

39 Price monitoring Figure 14 Bills for a typical small business flat rate customer, December quarter 2017 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 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 $2,635 (Powershop Base Rates). March quarter In the March quarter, 18 retailers had small business flat rate offers on Energy Made Easy. For this tariff, 16 of the retailers had at least one market offer, on Energy Made Easy. Table 20 Bills for a typical small business flat rate customer, March quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 2,326 EnergyAustralia 2,478 2,294 2,240 2,379 Energy Locals 2,460 2,211 2,211 2,211 32

40 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) ERM Power 2,895 2,193 2,069 2,316 Lumo Energy 2,404 2,157 2,157 2,157 Momentum Energy 2,416 Next Business Energy 2,661 2,342 2,342 2,342 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. Sources: Energy Made Easy; QCA analysis. Figure 15 Bills for a typical small business flat rate customer, March quarter 2018 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 Low market offer High market offer Standing offer Note: Diamond Energy and Momentum Energy did not have a small business flat rate market offer on Energy Made Easy in the March quarter. Sources: Energy Made Easy; QCA analysis. 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) 33

41 Price monitoring market offer bills ranged from $1,830 (QEnergy Flexi Biz 17 Single Rate) to $2,635 (Powershop Base Rates). June quarter In the June quarter, 18 retailers had small business flat rate offers on Energy Made Easy. For this tariff, 16 of the retailers had at least one market offer on Energy Made Easy. Table 21 Bills for a typical small business flat rate customer, June quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 2,326 EnergyAustralia 2,478 2,292 2,240 2,379 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 Momentum Energy 2,416 Next Business Energy 2,661 2,191 2,041 2,342 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. Sources: Energy Made Easy; QCA analysis. 34

42 Price monitoring Figure 16 Bills for a typical small business flat rate customer, June quarter 2018 $3,200 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 Low market offer High market offer Standing offer Note: Diamond Energy and Momentum Energy did not have a small business flat rate market offer on Energy Made Easy in the June quarter. Sources: Energy Made Easy; QCA analysis. 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 (Powershop Base Rates). QCA assessment Retailers with offers on Energy Made Easy 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. 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: 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. 35

43 Price monitoring 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 compared to June quarter 2017 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 were cheaper than the EnergyAustralia offer in the June quarter of 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 $829. Sixteen retailers had at least one small business market offer available in The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in Table 22 Quarterly changes in lowest market offer bill for a typical small business flat rate customer, Retailer December quarter (%) March quarter (%) June quarter (%) 1st Energy 0 AGL Alinta Energy Amaysim Energy 0 0 Click Energy EnergyAustralia Energy Locals ERM Power Lumo Energy Next Business Energy 12.8 Origin Energy Powerdirect Powershop QEnergy Red Energy Simply Energy 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. Sources: Energy Made Easy; QCA analysis. 20 QCA 2017c, section (QCA assessment) shows the EnergyAustralia bill value as $1,972. For this report, we have recalculated the EnergyAustralia bill using the consumption level used for the report. 36

44 Price monitoring The table shows that a number of retailers published new offers during 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 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 , 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 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 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 7,319 EnergyAustralia 6,767 6,163 5,916 6,454 Energy Locals 6,236 6,236 6,236 Lumo Energy 6,874 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, QCA 2017b, sections 2.4.1, and QCA 2018d, Appendix B (highest standing offers); QCA 2018e, Appendix B (highest standing offers). 23 Ibid. 37

45 Price monitoring Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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. Sources: Energy Made Easy; QCA analysis. Figure 17 Bills for a typical small business time of use customer, September quarter 2017 $8,600 $8,200 $7,800 $7,400 $7,000 $6,600 $6,200 $5,800 $5,400 $5,000 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. Sources: Energy Made Easy; QCA analysis. 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 Low market offer High market offer Standing offer 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. 38

46 Price monitoring Table 24 Bills for a typical small business time of use customer, December quarter 2017 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 7,319 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 Lumo Energy 6,874 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. Sources: Energy Made Easy; QCA analysis. Figure 18 Bills for a typical small business time of use customer, December quarter 2017 $8,600 $8,200 $7,800 $7,400 $7,000 $6,600 $6,200 $5,800 $5,400 $5,000 Low market offer High market offer Standing offer 39

47 Price monitoring 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. Sources: Energy Made Easy; QCA analysis. 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 $7,650 (Powershop Base Rates). March quarter In the March quarter, 18 retailers had offers for the small business time of use tariff on Energy Made Easy. For this tariff, 16 of the retailers had at least one market offer on Energy Made Easy. Table 25 Bills for a typical small business time of use customer, March quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 7,319 EnergyAustralia 6,767 6,204 6,016 6,454 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 Momentum Energy 10,166 Next Business Energy 8,018 7,056 7,056 7,056 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 40

48 Price monitoring 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. Sources: Energy Made Easy; QCA analysis. Figure 19 Bills for a typical small business time of use customer, March quarter 2018 $8,600 $8,200 $7,800 $7,400 $7,000 $6,600 $6,200 $5,800 $5,400 $5,000 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 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 (Powershop Base Rates). 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. 41

49 Price monitoring Table 26 Bills for a typical small business time of use customer, June quarter 2018 Retailer Standing offer ($) Average market offer ($) Lowest market offer ($) Highest market offer ($) 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 Diamond Energy 7,319 EnergyAustralia 6,767 6,204 6,016 6,454 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 Momentum Energy 10,166 Next Business Energy 8,018 6,344 5,633 7,056 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. Sources: Energy Made Easy; QCA analysis. 42

50 Price monitoring Figure 20 Bills for a typical small business time of use customer, June quarter 2018 $9,400 $9,000 $8,600 $8,200 $7,800 $7,400 $7,000 $6,600 $6,200 $5,800 $5,400 $5,000 Low market offer High market offer Standing offer 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. Sources: Energy Made Easy; QCA analysis. 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 Retailers with offers on Energy Made Easy 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. 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: Simply Energy's Business Save 10 Online market offer ($5,819) in the September quarter 43

51 Price monitoring Next Business Energy's 8800 Business TOU (7% Pay on Time Discount) market offer ($5,633) in the June 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 compared to June quarter 2017 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 were more expensive than the EnergyAustralia offer in the June quarter of 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 $2,017. Sixteen retailers had at least one small business time of use market offer available in The table below shows the quarterly changes, in per cent, in each of these retailers' lowest market offers in Table 27 Quarterly changes in lowest market offer bill for a typical small business time of use customer, Retailer December quarter (%) March quarter (%) June quarter (%) 1st Energy 0 AGL Alinta Energy Amaysim Energy 0 0 Click Energy (a) 1.8 (b) 0 EnergyAustralia Energy Locals ERM Power 0 0 Lumo Energy Next Business Energy 20.2 Origin Energy Powerdirect Powershop QEnergy Red Energy 0 Simply Energy (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 (QCA assessment) shows the EnergyAustralia bill value as $5,302. For this report, we have recalculated the EnergyAustralia bill using the consumption level used for the report. 44

52 Price monitoring Note: A dash ( ) means the retailer did not have a small business TOU market offer published on Energy Made Easy in the preceding quarter. Sources: Energy Made Easy; QCA analysis. The table shows that a number of retailers published new offers during 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 Residential flat rate offers 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 Table 28 Reconnection and disconnection fees included on residential flat rate offers, June quarter Retailer Reconnection fee ($) Disconnection fee ($) AGL Alinta Energy Amaysim Energy Click Energy Dodo Power and Gas EnergyAustralia / (a) Lumo Energy Momentum Energy Origin Energy / (b) Powerdirect Red Energy / (c) Simply Energy 9.98 / (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 On 1 February 2018, Red Energy published a new Easy Saver 10% (Residential) offer on Energy Made Easy which applied a reconnection fee of $ 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 The Plus 15 and Plus 15 Online offers were expired on 23 May $9.98 applied to all new offers effective from and after 21 March 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 All fees were reported as being GST inclusive. 45

53 Price monitoring 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 The reconnection and/or disconnection fee amounts for nine of the twelve retailers were within the range of $8.76 and $ Small business flat rate offers 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 Table 29 Reconnection and disconnection fees included on small business flat rate offers, June quarter 2018 Retailer Reconnection fee ($) Disconnection fee ($) AGL Alinta Energy Amaysim Energy Click Energy EnergyAustralia Lumo Energy Momentum Energy Origin Energy Powerdirect Red Energy / (a) Simply Energy 9.98 / (b) (a) $10.75 only applied to Easy Saver 10% (Business) offer available from 26 April On 1 February 2018, Red Energy published a new Easy Saver 10% (Business) offer on Energy Made Easy which applied a reconnection fee of $ 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 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 The reconnection and/or disconnection fee amounts for all eleven retailers were within the range of $8.76 and $ QCA 2017b, section (Table 23). 26 QCA 2017b, section (Table 24). 46

54 Price monitoring Additional fee information on Energy Made Easy In our 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 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 Comparison and assessment Standing offer bills were generally more expensive than market offer bills in all the quarters of 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 were lower than the cheapest offers available in the June quarter of 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) (b) their metering charges, or state that they do not levy metering charges if that is the case, in their offers where customers can obtain information on additional distribution nonnetwork charges that apply, or may apply, to their offers. 47

55 Discounts, savings and benefits 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 Many retailers offered discounts of some form in 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 , compared to , 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 , as in 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. 3.2 Minister's Direction 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 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 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 48

56 Discounts, savings and benefits usage with certified renewable energy, which is added to the electricity grid on their behalf. 27 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 , however, we did find significant variation in discounts across the four quarters of , 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 by quarter 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. 27 GreenPower website. 28 We also discuss this in Chapter 9. 49

57 Discounts, savings and benefits 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) 50

58 Discounts, savings and benefits (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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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 c/day and c/kwh respectively, and from 25 August the supply and usage charges were c/day and 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. Sources: Energy Made Easy; QCA analysis. 51

59 Discounts, savings and benefits 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 , 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. 52

60 Discounts, savings and benefits 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 Shine Reward 5% % % Shine 7% % % Connect 7% % % Shine Budget 15% % % Opal 18% % % Topaz 22% % % Note: Discounts on Shine Reward, Shine and Shine Budget offers applied net of solar exports. Source: Energy Made Easy. 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 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 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 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 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. 53

61 Discounts, savings and benefits Discounts December quarter Residential flat rate market offers available on Energy Made Easy in the December 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 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. 54

62 Discounts, savings and benefits Table 32 Discounts attached to residential flat rate market offers, December 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 / 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) 55

63 Discounts, savings and benefits (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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. Sources: Energy Made Easy; QCA analysis. 56

64 Discounts, savings and benefits QCA assessment Eleven of the 14 retailers with residential flat rate market offers available in the December 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. 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 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). Pay on time discounts 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. Direct debit discounts AGL attached a 12 per cent discount off usage charges on its Set and Forget offers. Discount combinations Amaysim Energy and Click Energy attached discounts ranging from 5 to 22 per cent off the total bill for customers receiving bills by , 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. Origin Energy combined direct debit and e-billing discounts off usage charges on its Maximiser and Maximiser (Online Only) offers. The discounts of 12 and 16 per cent were available to customers receiving correspondence (including bills) by 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

65 Discounts, savings and benefits 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 and bulk pack discounts Powershop included discounts of 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 or 18 per cent discounts off the total bill when customers purchased the bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. Discounted standing offers 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 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 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, 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: 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 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 March quarter. 58

66 Discounts, savings and benefits Table 33 Discounts attached to residential flat rate market offers, March quarter 2018 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 / bulk pack 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) 59

67 Discounts, savings and benefits 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 / bulk pack 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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. Sources: Energy Made Easy; QCA analysis. 60

68 Discounts, savings and benefits 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. 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 and Origin Energy attached discounts ranging from 3 to 12 per cent off the total bill on at least one of their offers. Pay on time discounts 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 st 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 cents per day and cents per kilowatt hour respectively, compared to cents per day and 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. Direct debit discounts 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 Discount combinations 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 The supply and usage charges on the EasySaver offers were cents per day and 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 bill for customers receiving bills by , 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 61

69 Discounts, savings and benefits 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 Offer(s) Discount off bill (%) Supply charge (cents/day) Supply charge (% above standing offer) Usage charge (cents/kwh) Usage charge (% above standing offer) Standing Shine Reward (a) 5% % % Shine Reward (b) 5% % % Shine (a) 7% % % Shine (b) 7% % % Connect (c) 7% % % Shine Budget (a) 15% % % Shine Budget (b) 15% % % Opal (a) 18% % % Opal (b) 18% % % Topaz (c) 22% % % Agate (d) 15% % % Solar (d) 7% % % Solar Light (d) 10% % % (a) Offer expired 2 January (b) Offer available from 2 January to 1 March (c) Offer expired 1 March (d) Offer available from 1 March Note: Discounts on Shine Reward, Shine, Shine Budget, Solar and Solar Light offers applied net of solar exports. Source: Energy Made Easy. 62

70 Discounts, savings and benefits 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 Origin Energy combined direct debit and e-billing discounts off usage charges on its Maximiser and Maximiser (Online Only) offers. The 16 per cent discount was available to customers receiving correspondence (including bills) by and paying by direct debit. Powerdirect combined pay on time and direct debit discounts off usage charges on its Queensland Residential Market Offer. The discounts were 12 per cent for paying on time, and 2 per cent for paying by direct debit. Online saver and bulk pack discounts Powershop included discounts of and per cent off the total bill on its Standard Saver offers for customers who purchased the corresponding online saver or bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. 32 AEMC 2018b, section AEMC 2018c, summary (page ii). 34 ACCC 2018a. 63

71 Discounts, savings and benefits Discounted standing offers 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 and who paid in full by an approved payment method by due date a direct debit discount (3 per cent off the total bill) for customers who agreed to receive invoices by and paid in full by direct debit. 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: 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 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 June quarter. 64

72 Discounts, savings and benefits Table 35 Discounts attached to residential flat rate market offers, June quarter 2018 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 / bulk pack 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) Next Business Energy 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) 65

73 Discounts, savings and benefits (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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. Sources: Energy Made Easy; QCA analysis. 66

74 Discounts, savings and benefits QCA assessment Thirteen of the 16 retailers with residential flat rate market offers available in the June 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. Guaranteed discounts EnergyAustralia and Origin Energy attached guaranteed discounts ranging from 5 to 28 per cent 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 Pay on time discounts 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. Direct debit discounts AGL attached a 28 per cent discount off usage charges on its Set and Forget offers. Discount combinations 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 bill for customers receiving bills by , paying by the due date and using approved payment methods. Origin Energy combined direct debit and e-billing discounts off usage charges on its Maximiser and Maximiser (Online Only) offers. The discount of 16 per cent was available to customers receiving correspondence (including bills) by and paying by direct debit. Powerdirect combined pay on time and direct debit discounts off usage charges on its Queensland Residential Market Offer. The discounts were 12 per cent for paying on time, and 2 per cent for paying by direct debit. Online saver and bulk pack discounts Powershop included discounts of and per cent off the total bill on its Standard Saver offers where customers purchased the corresponding online saver or bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. 67

75 Discounts, savings and benefits Discounted standing offers 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 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 and paid in full by direct debit. Other incentives and benefits The table below shows the other incentives and benefits attached to residential flat rate market offers during Table 36 Other incentives and benefits attached to residential flat rate market offers, Retailer Other incentives and benefits AGL Dodo Power & Gas EnergyAustralia 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. 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. 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 Red 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). 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). Qantas points: The customer received 10,000 Qantas points when switching to Red 68

76 Discounts, savings and benefits Retailer Other incentives and benefits 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 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. Source: Energy Made Easy. QCA assessment Seven of the 16 retailers who had residential market offers on Energy Made Easy in 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 Retailers also diversified the range of incentives and benefits offered to residential customers in , compared to when incentives that provided direct savings to customer bills related mostly to signing up online. 36 New types of incentives and benefits offered in 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 and not in was free electricity supply for one month, which AGL offered on its Set and Forget and Savers offers available from May QCA 2017b, section (Table 27). 36 QCA 2017b, section QCA 2017b, section (Table 27). 69

77 Discounts, savings and benefits GreenPower The table below shows the GreenPower options attached to residential flat rate market offers during Table 37 GreenPower options attached to residential flat rate market offers, Retailer GreenPower options AGL Click Energy Dodo Power & Gas EnergyAustralia 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 Allowed customers to reduce their emissions by 25%, with GreenPower charges included in the rates (Natural offers only) GreenPower options: Electricity equal to 10% of usage sourced from GreenPower for $ per kwh Electricity equal to 100% of usage sourced from GreenPower for $0.099 per kwh (a) PureEnergy options (Anytime Saver (Home), Flexi Saver (Home) offers, and Secure Saver (Home) offers only) GreenPower charges until 2 January 2018: PureEnergy 10% $ x 10% of total usage PureEnergy 20% $ x 20% of total usage PureEnergy 100% $ per kwh GreenPower charges after 2 January 2018: PureEnergy 10% $ x 10% of total usage PureEnergy 20% $ x 20% of total usage PureEnergy 100% $ per kwh 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 $ per kwh 100% of usage matched with electricity from accredited GreenPower sources for $ per kwh Powershop GreenPower charges until 2 November 2017: 100% GreenPower for $ per kwh GreenPower charges after 2 November 2017: 100% GreenPower for $0.085 per kwh QEnergy QGreen options: 10% of usage matched with GreenPower for $ per kwh 50% of usage matched with GreenPower for $0.033 per kwh 70

78 Discounts, savings and benefits Red Energy Retailer GreenPower options 100% of usage matched with GreenPower for $0.066 per kwh 100% GreenPower for an extra $ 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 $ 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 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 Prior to 2 January 2018, EnergyAustralia priced GreenPower options at $ per kilowatt hour; after that, the charges dropped to $ per kilowatt hour. Similarly, prior to 2 November 2017, Powershop priced GreenPower options at $ 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 Small business flat rate market offers Discounts September quarter Small business 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 guaranteed and pay on time discounts combined pay on time, approved payment methods and e-billing 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. 71

79 Discounts, savings and benefits Table 38 Discounts attached to small business flat rate market offers, September quarter 2017 Retailer Guaranteed Pay on time Guaranteed and pay on time Pay on time, APM and e-billing 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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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 c/day and c/kwh respectively, and from 30 August 2017 its supply and usage charges were c/day and 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. Sources: Energy Made Easy; QCA analysis. 72

80 Discounts, savings and benefits QCA assessment Eight of the 12 retailers with small business flat rate market offers available in the September quarter attached guaranteed and/or conditional discounts to at least one of their offers. Energy Locals, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small business flat rate market offers. Guaranteed discounts 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. Pay on time discounts 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. Discount combinations 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 , 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 cents per day and cents per kilowatt hour respectively, compared to cents per day and 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 . 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. 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 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 amount was 10 per cent. Discounted standing offers 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: 73

81 Discounts, savings and benefits a pay on time discount (7 per cent off the total bill) for customers who agreed to receive invoices by 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 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. Discounts December quarter Small business flat rate market offers available on Energy Made Easy in the December quarter included the following types of discounts and discount combinations: guaranteed discounts pay on time discounts guaranteed and pay on time discounts combined pay on time, approved payment methods and e-billing discounts combined e-billing discount online saver and bulk pack discounts. The table below shows the discounts attached to small business flat rate market offers in the December quarter. 74

82 Discounts, savings and benefits Table 39 Discounts attached to small business flat rate market offers, December quarter 2017 Retailer Guaranteed Pay on time Guaranteed and pay on time Pay on time, APM and e-billing e-billing Online saver / bulk pack AGL 13% off usage and 12% off bill (a) 15% off usage (b) Alinta Energy 20% off usage (c) 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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. Sources: Energy Made Easy; QCA analysis. 75

83 Discounts, savings and benefits QCA assessment Nine of the 14 retailers with small business flat rate market offers available in the December quarter attached guaranteed and/or conditional discounts to at least one of their offers. Energy Locals, ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small business flat rate market offers. Guaranteed discounts Discounts off usage charges ranged from 3 per cent for Origin Energy's Business Solar Boost 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 AGL attached a 12 per cent guaranteed discount off the total bill on its Business Everyday offers. Pay on time discounts 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. Discount combinations 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 , 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 cents per day and cents per kilowatt hour respectively, compared to cents per day and cents per kilowatt hour on its Business market offer. e-billing discounts Origin Energy attached an e-billing (only) discount of 13 per cent off usage charges on its Business esaver offer. The discount was available to customers receiving correspondence (including bills) by . Online saver and bulk pack discounts Powershop attached discounts of 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 and 18 per cent discounts off the total bill when customers purchased the bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. 76

84 Discounts, savings and benefits Discounted standing offers Diamond Energy's small business 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 and who paid in full by an approved payment method by due date a direct debit discount (3 per cent off the total bill) for customers who agreed to receive invoices by 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, 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 included the following types of discounts and discount combinations: guaranteed discounts pay on time discounts guaranteed and pay on time discounts combined pay on time, approved payment methods and e-billing discounts combined e-billing discounts online saver and bulk pack discounts. The table below shows the discounts attached to small business flat rate market offers in the March quarter. 77

85 Discounts, savings and benefits Table 40 Discounts attached to small business flat rate market offers, March quarter 2018 Retailer Guaranteed Pay on time Guaranteed and pay on time Pay on time, APM and e-billing e-billing Online saver / bulk pack 1st Energy 15% off usage (a) AGL 10% and 13% off usage, and 12% off bill (b) Alinta Energy 20% off usage (c) Amaysim Energy 5% off bill (d) Click Energy 5% and 7% off bill (e) EnergyAustralia 10% off usage (f) 5% off usage (g) 12% off usage (h) Next Business Energy 12% off bill (i) Origin Energy 3% and 15% off usage (j) 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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. 78

86 Discounts, savings and benefits 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. Sources: Energy Made Easy; QCA analysis. 79

87 Discounts, savings and benefits QCA assessment Eleven of the 16 retailers with small business flat rate market offers available in the March quarter attached guaranteed and/or conditional discounts to at least one of their offers. Energy Locals, ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small business flat rate market offers. Guaranteed discounts Discounts off usage charges ranged from 3 per cent for Origin Energy's Business Solar Boost 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 AGL attached a 12 per cent guaranteed discount off the total bill on its Business Everyday offers. Pay on time discounts 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. 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). Discount combinations Amaysim Energy and Click Energy attached discounts of 5 and 7 per cent off the total bill for customers receiving bills by , 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 Offer(s) Discount off bill (%) Supply charge (cents/day) Supply charge (% above standing offer) Usage charge (cents/kwh) Usage charge (% above standing offer) Standing Business (a) 7% % % Business (b) 7% % % Business Plus (c) 5% % % (a) Offer available from 27 July 2017 to 2 January (b) Offer available from 2 January to 1 March (c) Offer available from 1 March Source: Energy Made Easy. 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. 80

88 Discounts, savings and benefits e-billing discounts Origin Energy attached an e-billing (only) discount of 13 per cent off usage charges on its Business esaver offer until (early) January 2018, and 15 per cent off usage charges on its Business esaver offer from (early) January The discounts were available to customers receiving correspondence (including bills) by . Online saver and bulk pack discounts Powershop attached a discount of off the total bill on its Standard Saver offer where customers selected its online saver pack. Powershop attached a per cent discount off the total bill on its Standard Saver with Bulk Pack offer when customers purchased the bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. Discounted standing offers Diamond Energy's small business 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 and who paid in full by an approved payment method by due date a direct debit discount (3 per cent off the total bill) for customers who agreed to receive invoices by and paid in full by direct debit. Discounts June quarter Small business flat rate market offers available on Energy Made Easy for in the June quarter included the following types of discounts and discount combinations: guaranteed discounts pay on time discounts guaranteed and pay on time discounts combined pay on time, approved payment methods and e-billing discounts combined e-billing discounts online saver and bulk pack discounts. The table below shows the discounts attached to small business flat rate market offers in the June quarter. 81

89 Discounts, savings and benefits Table 42 Discounts attached to small business flat rate market offers, June quarter 2018 Retailer Guaranteed Pay on time Guaranteed and pay on time Pay on time, APM and e-billing e-billing Online saver / bulk pack 1st Energy 15% off usage (a) AGL 10%, 13% and 15% off usage, and 11% and 12% off bill (b) Alinta Energy 20% off usage (c) Amaysim Energy 5% off bill (d) Click Energy 5% off bill (e) EnergyAustralia 10% of usage (f) 5% off usage (g) 12% off bill (h) Next Business Energy 7% and 12% off bill (i) Origin Energy 3% and 15% off usage (j) 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) 82

90 Discounts, savings and benefits (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 c/day, compared to c/day on the Base Rates offers, and the usage charge on the Standard Saver offers was c/kwh, compared to 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. Sources: Energy Made Easy; QCA analysis. 83

91 Discounts, savings and benefits QCA assessment Eleven of the 16 retailers with small business flat rate market offers available in the June quarter attached guaranteed and/or conditional discounts to at least one of their offers. Energy Locals, ERM Power, Lumo Energy, Powerdirect and QEnergy did not attach discounts to any of their small business flat rate market offers. Guaranteed discounts Discounts off usage charges ranged from 3 per cent for Origin Energy's Business Solar Boost 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. Pay on time discounts Discounts off usage charges ranged from 5 per cent for EnergyAustralia's Flexi Saver (Business) 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. Discount combinations 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 , 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 Origin Energy attached an e-billing (only) discount of 15 per cent off usage charges on its Business esaver offer. The discount was available to customers receiving correspondence (including bills) by . Online saver and bulk pack discounts Powershop attached discounts of and per cent off the total bill on its Standard Saver offers for customers who purchased the corresponding online saver or bulk pack upfront. 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 15 or 18 per cent off the total bill. However, the discount value field listed or 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. Discounted standing offers Diamond Energy's small business flat rate standing offers included: a pay on time discount (7 per cent off the total bill) for customers who agreed to receive invoices by and who paid in full by an approved payment method by due date a direct debit discount (3 per cent off the total bill) for customers who agreed to receive invoices by and paid in full by direct debit. 84

92 Discounts, savings and benefits Other incentives and benefits The table below shows the other incentives and benefits attached to small business flat rate market offers during Table 43 Other incentives and benefits attached to small business flat rate market offers, Retailer EnergyAustralia Other incentives and benefits 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 c/day and c/kwh respectively, compared to c/day and 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 Origin Energy Simply Energy General incentive: A dedicated account management team during business hours (Business Premium offers). 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). 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 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. Source: Energy Made Easy. QCA assessment A few retailers offered other incentives and benefits during the 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 , the only new type offered in 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

93 Discounts, savings and benefits Table 44 GreenPower options attached to small business flat rate market offers, Retailer GreenPower options AGL EnergyAustralia 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) PureEnergy options (Basic Business, Flexi Saver (Business) and Everyday Saver (Business) and Basic Saver (Business) offers only) GreenPower charges until 2 January 2018: PureEnergy 10% $ x 10% of total usage PureEnergy 25% $ x 25% of total usage PureEnergy 100% $ per kwh GreenPower charges after 2 January 2018: PureEnergy 10% $ x 10% of total usage PureEnergy 25% $ x 25% of total usage PureEnergy 100% $ per kwh 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: 25% of usage matched with electricity from accredited GreenPower sources for $ per kwh 50% of usage matched with electricity from accredited GreenPower sources for $ per kwh 100% of usage matched with electricity from accredited GreenPower sources for $ per kwh Powershop GreenPower options until 2 November 2017: 100% GreenPower for $ per kwh GreenPower options after 2 November 2017: 100% GreenPower for $0.085 per kwh QEnergy Red Energy QGreen options: 10% of usage matched with GreenPower for $ per kwh 50% of usage matched with GreenPower for $0.033 per kwh 100% of usage matched with GreenPower for $0.066 per kwh 100% GreenPower for $ 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 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 GreenPoweraccredited 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 Prior to 2 January 2018, EnergyAustralia priced GreenPower options at $ per kilowatt hour; after that, the charges dropped to $

94 Discounts, savings and benefits per kilowatt hour. Similarly, prior to 2 November 2017, Powershop priced GreenPower options at $ 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 Complexity of discounting In our 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 timeconsuming, 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 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 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 ACCC 2018b, section

95 Discounts, savings and benefits 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 ($) Bill after conditional discounts and incentives ($) Saving ($) 1st Energy EasySaver 1,767 1, AGL Set and Forget 1,513 1, Alinta Energy Home Saver Plus (Residential Single Rate) 1,559 1, Amaysim Energy Electricity 2 1,703 1, Click Energy Agate 1,703 1, Dodo Power & Gas Energex Res No Term 1,638 1, 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 Next Business Energy 8400 Domestic Supply 1,655 1, Origin Energy Origin Maximiser (Online Only) 1,503 1, Powerdirect Queensland Residential Electricity 1,563 1, Powershop Standard Saver with Bulk Pack 1,595 1, QEnergy Flexi Saver Home Single Rate 1,238 1,238 0 Red Energy Easy Saver 10% & Qantas Red Saver 1,434 1, Simply Energy Simply RACQ Plus 21 Online 1,533 1, 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. Sources: Energy Made Easy; QCA analysis. 88

96 Discounts, savings and benefits 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) $1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 Before conditional discounts & incentives After conditional discounts & incentives Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Sources: Energy Made Easy; QCA analysis. Residential flat rate with controlled load super economy market offers In the June quarter, 15 retailers had market offers for this tariff combination on Energy Made Easy. The table and figure below show the difference between annual bills for a typical customer on each retailer's lowest offer, before and after conditional discounts and incentives. Table 46 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load super economy market offers) Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) 1st Energy EasySaver (Residential Peak + Controlled Load 1) 2,303 1, AGL Set and Forget 1,908 1, Alinta Energy Home Saver Plus (Residential + Controlled Load 1) 1,953 1, Amaysim Energy Electricity 2 (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)) 2,228 1, Click Energy Agate (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)) 2,228 1, Dodo Power & Gas Energex Res & Controlled Load No Term 2,046 1,

97 Discounts, savings and benefits Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) EnergyAustralia Energy Locals Anytime Saver (Home Peak with Controlled Load 1 (No Exit Fees)) Save Me (Residential Anytime with Controlled Load 1) 1,550 1, ,859 1,859 0 Mojo Power Mojo EnergyPass 1,952 1,952 0 Origin Energy Origin Maximiser (Online Only) 1,871 1, Powerdirect Queensland Residential Electricity Market Offer 1,958 1, Powershop Standard Saver with Bulk Pack 2,099 1, 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, Simply Energy RACQ Plus 21 Online 2,012 1, 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. Sources: Energy Made Easy; QCA analysis. 90

98 Discounts, savings and benefits 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) $2,300 $2,200 $2,100 $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 Before conditional discounts & incentives After conditional discounts & incentives Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value. Sources: Energy Made Easy; QCA analysis. Residential flat rate with controlled load economy market offers In the June quarter, 15 retailers had market offers for this tariff combination on Energy Made Easy. The table and figure below show the difference between annual bills for a typical customer on each retailer's lowest offer, before and after conditional discounts and incentives. Table 47 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (residential flat rate with controlled load economy market offers) Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) 1st Energy EasySaver (Residential Peak + Controlled Load 2) 2,187 1, AGL Set and Forget 1,854 1, Alinta Energy Amaysim Energy Home Saver Plus (Residential Single Rate with Controlled Load 2) Electricity 2 (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)) 1,899 1, ,115 1, Click Energy Agate (Tariff 11 and Tariff 31 (Night Rate) and Tariff 33 (Controlled Supply)) 2,115 1,

99 Discounts, savings and benefits Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) Dodo Power & Gas EnergyAustralia Energy Locals Energex Res & Controlled Load No Term Anytime Saver (Home - Peak with Controlled Load 2 (No Exit Fees)) Save Me (Residential - Anytime with Controlled Load 2) 1,983 1, ,507 1, ,761 1,761 0 Mojo Power Mojo EnergyPass 1,860 1,860 0 Origin Energy Origin Maximiser (Online Only) 1,819 1, Powerdirect Queensland Residential Electricity Market Offer 1,904 1, Powershop Standard Saver with Bulk Pack 1,983 1, QEnergy Flexi Saver Home (Single Rate + Controlled Load) 1,472 1,472 0 Red Energy Easy Saver 10% & Qantas Red Saver 1,760 1, Simply Energy RACQ Plus 21 Online 1,932 1, 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. Sources: Energy Made Easy; QCA analysis. 92

100 Discounts, savings and benefits 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) $2,200 $2,100 $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 $1,400 Before conditional discounts & incentives After conditional discounts & incentives Note: Guaranteed discounts and incentives (where applicable) have been applied to all bill calculations in this figure. The lowest market offer for each retailers has been determined after accounting for all (guaranteed and conditional) discounts and incentives. Some retailers had more than one offer which yielded the same (lowest) bill value. Sources: Energy Made Easy; QCA analysis. Small business flat rate market offers In the June quarter, 16 retailers had small business flat rate market offers on Energy Made Easy. The table and figure below show the difference between annual bills for a typical customer on each retailer's lowest offer, before and after conditional discounts and incentives. Table 48 Annual bills for each retailer's lowest market offers, before and after conditional discounts and incentives, June quarter 2018 (small business flat rate market offers) Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) 1st Energy 1st Saver 2,488 2, AGL Business Everyday 2,191 2,191 0 Alinta Energy Business Saver Plus (Single Rate) 2,469 2, Amaysim Energy Business 1 (Tariff 20 Only) 2,581 2, Click Energy Business Plus 2,581 2, EnergyAustralia Basic Saver (Business) 2,359 2, Energy Locals Save Me (Small Business Anytime Offer) 2,211 2,211 0 ERM Power Business Energy Adjustable (Peak) 2,069 2,

101 Discounts, savings and benefits Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) Saving ($) Lumo Energy Business Premium (No Exit Fee) 2,157 2,157 0 Next Business Energy 8500 Business General Supply (7% Pay on Time Discount) 2,194 2, Origin Energy Business esaver 2,411 2, Powerdirect Queensland Small Business Electricity Offer 2,236 2,236 0 Powershop Standard Saver with Bulk Pack 2,582 2, QEnergy Flexi Saver Biz Single Rate 1,806 1,806 0 Red Energy Easy Saver 10% (Business) 2,394 2, Simply Energy Business Save 10 Online 2,201 2,201 0 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. Sources: Energy Made Easy; QCA analysis. 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) $2,600 $2,500 $2,400 $2,300 $2,200 $2,100 $2,000 $1,900 $1,800 $1,700 Before conditional discounts & incentives After conditional discounts & incentives 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. Sources: Energy Made Easy; QCA analysis. Small business time of use market offers In the June quarter, 16 retailers had small business time of use 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. 94

102 Discounts, savings and benefits 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) Retailer Offer name Bill before conditional discounts and incentives ($) Bill after conditional discounts and incentives ($) 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, Click Energy Business Plus 7,412 7, EnergyAustralia Energy Locals ERM Power Basic Saver (Business 5 Day Time of Use) Save Me (Small Business Time of Use Offer) Business Energy Adjustable (Time of Use) 6,392 6, ,236 6, ,961 5,961 0 Lumo Energy Business Premium (No Exit Fee) 6,175 6,175 0 Next Business Energy 8800 Business TOU (7% Pay on Time Discount) 6,119 5, Origin Energy Business esaver 7,044 6, 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, Simply Energy Business Save 10 Online 6,122 6,122 0 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. Sources: Energy Made Easy; QCA analysis. 95

103 Discounts, savings and benefits 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) $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 Before conditional discounts & incentives After conditional discounts & incentives 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. Sources: Energy Made Easy; QCA analysis. QCA assessment As was the case for , the analysis for 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

104 Discounts, savings and benefits Comparison and assessment The most common form of discounts available in 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 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 Nine retailers with market offers provided GreenPower options in 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 afterdiscount bills for customers of other retailers. 97

105 Retail fees 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 As in , 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 Minister's Direction Section 2(d) of the Direction requires the market monitoring report to include a comparison and assessment of retailers' fees and charges, in , 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 QCA monitoring The type and value of retail fees and charges for each retailer did not vary significantly: across the four quarters of , 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 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. 98

106 Retail fees Residential flat rate offers 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 (a) 2.00 (b) Amaysim Energy 0.60 Click Energy 0.60 Dodo Power & Gas (c) EnergyAustralia (d) Energy Locals Next Business Energy (e) 2.00 Origin Energy 0.55 (f) 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. 99

107 Retail fees 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 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). Sources: Energy Made Easy; QCA analysis. 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 AGL (a) Amaysim Energy Click Energy Dodo Power & Gas 9.50 (b) EnergyAustralia (c) Energy Locals (d) Origin Energy (e) Powerdirect QEnergy (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 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). Sources: Energy Made Easy; QCA analysis. 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 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 42 Energy Locals, 'How can I pay my bill?'. 100

108 Retail fees cent 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 , 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 , 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 , 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 were higher than in AGL's and Powerdirect's dishonoured direct debit payment fees of $3.50 (AGL) and $5 (Powerdirect) in were also higher than their fees in 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 See QCA 2017b, section (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 and QCA 2018b, section See QCA 2017b, section (Table 38). 46 The retailers' pay on time discounts are outlined in Chapter 3, section National Energy Retail Rules, rule 49A. 48 The features of the Secure Saver (Home) offer are outlined in Chapter 3, section

109 Retail fees Small business flat rate offers 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 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 (a) 2.00 (b) Amaysim Energy 0.60 Click Energy 0.60 EnergyAustralia (c) Energy Locals ERM Power 0.50 / 0.55 (d) 1.87 / 1.65 (e) Next Business Energy (f) 2.00 (g) Origin Energy 0.55 (h) 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. 102

110 Retail fees 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 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). Sources: Energy Made Easy; QCA analysis. 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 AGL (a) Amaysim Energy Click Energy EnergyAustralia (b) Energy Locals (c) ERM Power Origin Energy (d) (e) Powerdirect (f) QEnergy (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 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). Sources: Energy Made Easy; QCA analysis. 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?'. 103

111 Retail fees 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 , 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 , 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 ($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 , 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 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 (Table 40). 51 See QCA 2017b, section (Table 41). 52 QCA 2017b, section

112 Retail fees 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 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 We again consider, as in , 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 Conclusion The key points of our comparison and assessment of retail fees and charges for are summarised below. 53 QCA 2017b, section 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

113 Retail fees Comparison and assessment 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 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. 106

114 Price trends 5 PRICE TRENDS This chapter reports on the trends in retailers' standing offer and generally available market offer bills from to 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 The largest bill increases usually took place in the September quarter. We note that in the last three quarters of , the average lowest offer bills decreased for each of the three residential customer tariffs and tariff combinations. 5.1 Minister's Direction 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 and 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 QCA methodology In September 2018 the AER advised stakeholders that data submitted by AGL contained what the AER described as 'significant errors', impacting many of the AER's performance reporting metrics over the financial year. Given AGL's share of the retail market and the impact of such errors on aggregate results, the AER removed all retail performance data until further notice. The AER expected to release all quarterly reports for the financial year by December Therefore, this report provides a simple average analysis of bills, consistent with the methodology used in our report. 5.3 QCA monitoring Residential flat rate offers 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 to AER 2018b. 107

115 Price trends Table 54 Bills for a typical residential flat rate customer, to Quarter Average standing offer ($) Average market offer ($) Average lowest market offer ($) Average highest market offer ($) September ,442 1,388 1,329 1,445 December ,442 1,384 1,345 1,424 March ,446 1,366 1,342 1,395 June ,446 1,362 1,333 1,399 September ,565 1,408 1,365 1,453 December ,551 1,406 1,370 1,442 March ,548 1,399 1,364 1,431 June ,548 1,420 1,381 1,453 September ,616 1,468 1,396 1,532 December ,621 1,449 1,381 1,522 March ,617 1,438 1,360 1,524 June ,626 1,420 1,348 1,522 Sources: Energy Made Easy; QCA analysis. Figure 26 Bills for a typical residential flat rate customer, to $1,700 $1,600 $1,500 $1,400 $1,300 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Ave standing offer Ave mkt offer Ave lowest mkt offer Ave highest mkt offer Sources: Energy Made Easy; QCA analysis. QCA assessment Between September 2015 and June 2018, the average residential flat rate standing offer increased by 12.7 per cent ($1,442 to $1,626), and the 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 was: 0.6 per cent (from $1,616 to $1,626) for the average standing offer 3.3 per cent (from $1,468 to $1,420) for the average market offer 108

116 Price trends 3.5 per cent (from $1,396 to $1,348) for the average lowest market offer 0.7 per cent (from $1,532 to $1,522) for the average highest market offer. The analysis of average bills shows that bills have generally increased in the September quarter each year, and that in the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable Residential flat rate with controlled load super economy offers The table and figure below show the average standing offer, the average market offer, and the averages of retailers' lowest and highest market offers for the quarters in each year from to Table 55 Bills for a typical flat rate with controlled load super economy customer, to Quarter Average standing offer ($) Average market offer ($) Average lowest market offer ($) Average highest market offer ($) September ,771 1,670 1,600 1,738 December ,769 1,661 1,614 1,710 March ,772 1,639 1,609 1,674 June ,772 1,640 1,604 1,686 September ,869 1,724 1,670 1,778 December ,863 1,737 1,694 1,781 March ,866 1,733 1,692 1,770 June ,866 1,761 1,719 1,802 September ,021 1,852 1,756 1,943 December ,043 1,822 1,743 1,908 March ,034 1,808 1,706 1,920 June ,046 1,790 1,690 1,918 Sources: Energy Made Easy; QCA analysis. 109

117 Price trends Figure 27 Bills for a typical residential flat rate with controlled load super economy customer, to $2,100 $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Ave standing offer Ave mkt offer Ave lowest mkt offer Ave highest mkt offer Sources: Energy Made Easy; QCA analysis. 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: 1.2 per cent (from $2,021 to $2,046) for the average standing offer 3.4 per cent (from $1,852 to $1,790) for the average market offer 3.8 per cent (from $1,756 to $1,690) for the average lowest market offer 1.3 per cent (from $1,943 to $1,918) for the average highest market offer. The analysis of average bills shows that bills have generally increased in the September quarter each year, and that in the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable Residential flat rate with controlled load economy offers 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 the quarters in each year from to

118 Price trends Table 56 Bills for a typical flat rate with controlled load economy customer, to Quarter Average standing offer ($) Average market offer ($) Average lowest market offer ($) Average highest market offer ($) September ,759 1,658 1,590 1,727 December ,756 1,641 1,582 1,701 March ,760 1,631 1,601 1,666 June ,760 1,629 1,594 1,675 September ,829 1,683 1,632 1,735 December ,822 1,689 1,648 1,731 March ,822 1,684 1,645 1,720 June ,822 1,707 1,666 1,747 September ,957 1,781 1,692 1,863 December ,972 1,754 1,678 1,836 March ,963 1,740 1,642 1,847 June ,975 1,723 1,627 1,845 Sources: Energy Made Easy; QCA analysis. Figure 28 Bills for a typical residential flat rate with controlled load economy customer, to $2,000 $1,900 $1,800 $1,700 $1,600 $1,500 Sept 2015 Dec 2015 March 2016 June 2016 Sept 2016 Dec 2016 March 2017 June 2017 Sept 2017 Dec 2017 March 2018 June 2018 Ave standing offer Ave mkt offer Ave lowest mkt offer Ave highest mkt offer Sources: Energy Made Easy; QCA analysis. 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). 111

119 Price trends The change in the average bills between September 2017 and June 2018 quarters was: 0.9 per cent (from $1,957 to $1,975) for the average standing offer 3.3 per cent (from $1,781 to $1,723) for the average market offer 3.9 per cent (from $1,692 to $1,627) for the average lowest market offer 1.0 per cent (from $1,863 to $1,845) for the average highest market offer. The analysis of average bills shows that bills have generally increased in the September quarter each year, and that in the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable Small business flat rate offers The table and figure below show the average standing offer, the average market offer, and the averages of retailers' lowest and highest market offers for the quarters in each year from to Table 57 Bills for a typical small business flat rate customer, to Quarter Average standing offer ($) Average market offer ($) Average lowest market offer ($) Average highest market offer ($) September ,141 2,034 1,951 2,118 December ,141 2,021 1,964 2,084 March ,142 2,022 1,977 2,074 June ,142 2,033 2,000 2,078 September ,478 2,219 2,197 2,247 December ,468 2,228 2,210 2,248 March ,475 2,233 2,215 2,255 June ,500 2,271 2,247 2,295 September ,529 2,236 2,160 2,305 December ,545 2,256 2,201 2,318 March ,539 2,246 2,188 2,312 June ,555 2,223 2,172 2,302 Sources: Energy Made Easy; QCA analysis. 112

120 Price trends Figure 29 Bills for a typical small business flat rate customer, to $2,700 $2,500 $2,300 $2,100 $1,900 Sept 2015 Dec 2015 March 2016 June 2016 Sept 2016 Dec 2016 March 2017 June 2017 Sept 2017 Dec 2017 March 2018 June 2018 Ave standing offer Ave mkt offer Ave lowest mkt offer Ave highest mkt offer Sources: Energy Made Easy; QCA analysis. QCA assessment Between September 2015 and June 2018, the average small business flat rate standing offer increased by 19.4 per cent ($2,141 to $2,555), and the 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 was: 1 per cent (from $2,529 to $2,555) for the average standing offer 0.6 per cent (from $2,236 to $2,223) for the average market offer 0.4 per cent (from $2,160 to $2,172) for the average lowest market offer 0.1 per cent (from $2,305 to $2,302) for the average highest market offer. The analysis of average bills shows that bills increased significantly in the September quarter of 2016 but have generally remained stable since then Small business time of use offers 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 the quarters in each year from to

121 Price trends Table 58 Bills for a typical small business time of use customer, to Quarter Average standing offer ($) Average market offer ($) Average lowest market offer ($) Average highest market offer ($) September ,700 5,405 5,173 5,631 December ,701 5,338 5,175 5,576 March ,703 5,366 5,269 5,491 June ,703 5,416 5,347 5,518 September ,895 6,042 5,940 6,146 December ,853 6,086 6,010 6,161 March ,779 6,094 6,039 6,165 June ,856 6,243 6,182 6,316 September ,305 6,397 6,179 6,626 December ,326 6,408 6,247 6,647 March ,499 6,473 6,291 6,673 June ,545 6,391 6,215 6,644 Sources: Energy Made Easy; QCA analysis. Figure 30 Bills for a typical small business time of use customer, to $7,800 $7,400 $7,000 $6,600 $6,200 $5,800 $5,400 $5,000 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sources: Energy Made Easy; QCA analysis. QCA assessment Ave standing offer Ave mkt offer Ave low mkt offer Ave high mkt offer 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). The change in the average bills between September 2017 and June 2018 quarters was: 3.3 per cent (from $7,305 to $7,545) for the average standing offer 114

122 Price trends 0.1 per cent (from $6,397 to $6,391) for the average market offer 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. 5.4 Conclusion The key points of our comparison and assessment of trends in prices over to are summarised below. Comparison and assessment The bill analysis shows that: residential flat rate bills have generally increased in the September quarter each year; in 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 the lowest market offers decreased after Alinta Energy entered the market, but standing offers remained stable residential flat rate with controlled load economy bills have generally increased in the September quarter each year; in 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. 115

123 Switching to market offers 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 , and provides information on the characteristics of those customers. Our analysis reveals that the number of switching customers has increased significantly since , 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 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 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 NERR 57 ) 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 National Energy Retail Rules, rule 12 and schedule National Energy Retail Rules, rule QCA 2018a, section ACCC 2018b, section 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

124 Switching to market offers QCA market monitoring In our market monitoring report for , 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 , 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 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 will commence 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 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 Minister's Direction 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 , and information on the following characteristics of those customers: their location 62 QCA 2017b, section QCA 2017b, section AER 2018c. For more information on the AER's retail performance reporting framework, see the AER website. 65 AER 2018d, section AER 2018d, section 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). 117

125 Switching to market offers 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 with an information notice (under section 89C of the Electricity Act) to inform our analysis 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 The Direction does not define 'location' or the level of detail the QCA should include on location in its report. In the 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 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 In the 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 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 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 (Table 49) and Appendix F. 70 QCA 2017b, section (Figures 32 34). 71 See the National Energy Retail Law, section 43 and the AER's customer hardship policies webpage. 118

126 Switching to market offers 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 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 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 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 QCA monitoring The table below summarises the switching data for residential and small business customers. Table 59 Customers switching from standing to market offers, Small customer type Number of switching customers Total customers Proportion of customers switching (%) Residential 64,204 1,473, Small business 4, , Total 68,638 1,600, 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 switching rate (1.8 per cent). In its 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 More information can be found on the Queensland government's electricity and gas rebates website. 73 Queensland government HEEAS website. 74 QCA 2017b, section (Table 50). 75 QCA 2017b, section (Table 51). 76 AER 2017b, Key Findings (page 9). 77 QCA 2017b, section

127 Switching to market offers Switching customers' location The postcodes with the highest proportion of customers switching in are presented below. A full list of postcodes and number of switching customers are presented in Appendix C. Table 60 Top SEQ postcodes for customer switching from standing to market offers, Postcode Postcode location(s) Local Government Area Proportion of switching customers (%) 4155 Chandler Brisbane Tamborine Logan, Scenic Rim 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 Flagstone Creek, Carpendale, Egypt, Iredale, Lilydle, Helidon, Seventeen Mile, Stockyard, Lockyer, Rockmount Lockyer Valley Marburg Ipswich, Somerset Beerburrum Sunshine Coast 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 ( Electoral Commission Queensland,

128 Switching to market offers Figure 31 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 , the bulk of switching customers were reported by Origin Energy and AGL ( : 97 per cent; : 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 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. 121

129 Switching to market offers consultation on the proposal, however if the proposal is implemented we may see relatively high rates of engagement and switching continue in future 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 Figure 32 Residential switching by consumption level, ,500 4,000 3,500 3,000 Number of customers Number of customers 2,500 2,000 1,500 1, Consumption level (annualised kwh) Residential flat rate Residential flat rate - controlled load super economy Residential flat rate - controlled load economy Source: Retailers' responses to the QCA's information notice (unpublished). 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 Figure 33 Small business flat rate switching by consumption level, Consumption level (annualised kwh) Source: Retailers' responses to the QCA's information notice (unpublished). 79 For more information on the proposed rule change, see the AEMC website. 122

130 Switching to market offers Figure 34 Small business time of use switching by consumption level, Number of customers Source: Retailers' responses to the QCA's information notice (unpublished). QCA assessment Consumption level (annualised kwh) The distribution of residential switching customers in is skewed more to lower levels of consumption compared to In , 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 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 , 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 to 69 per cent in 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 , 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

131 Switching to market offers 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 Therefore, the numbers may be slightly over- or under-stated based on the precise data definition. Table 61 Switching customers in a hardship program, and/or receiving the rebate and/or receiving HEEAS support, Category of switching customers Number of switching customers Proportion of total switching residential customers (%) Customers in a hardship program only 1, Customers receiving the rebate only 26, Customers receiving HEEAS support only Customers in a hardship program and receiving the rebate Customers in a hardship program and receiving HEEAS support Customers receiving the rebate and HEEAS support Customers in a hardship program, receiving the rebate and HEEAS support 1, Source: Retailers' responses to the QCA's information notice (unpublished). 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 However, this is a significant reduction compared to 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 cent 82, 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 (page 10). 82 AER 2017b, section

132 Switching to market offers 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 and had an outstanding debt of 90 days as at the end of August The table below shows the number of customers with an outstanding electricity debt at the time of switching. Table 62 Residential customers with an outstanding electricity debt at the time of switching, 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. Source: Retailers' responses to the QCA's information notice (unpublished). There has been a significant increase in the number of customers with an outstanding electricity debt at the time of switching since , 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 125

133 Switching to market offers in 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 Conclusion The box below summarises our commentary on customers switching from standing offers to market offers with their retailer in Comment Whilst the number of switching customers have increased significantly, the location with the largest proportion of switching customers in was similar to that , 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 The number of customers switching from standing offers to market offers with their retailer in has increased significantly since Both residential and small business customers with lower levels of consumption have switched in higher proportions compared to 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 to 12.3 per cent in 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. 126

134 Hardship, rebate and HEEAS customers 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 , but the overall share decreased slightly compared to Background 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 NERR 84 ) 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 QCA market monitoring In our market monitoring report for , 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 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) National Energy Retail Rules, rule 12 and schedule National Energy Retail Rules, rule QCA 2018a, section QCA 2017b, sections and 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). 127

135 Hardship, rebate and HEEAS customers 7.2 Minister's Direction 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 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 , 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 QCA methodology In May 2018, we issued all retailers with offers in SEQ in with an information notice (under section 89C of the Electricity Act) to inform our analysis 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 In the 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 , with the addition of a new category of customers those receiving HEEAS support 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 In the 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 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 QCA 2017b, section QCA 2017b, section (Table 53). 92 QCA 2017b, section (Tables 54 57; Figures 35 46). 128

136 Hardship, rebate and HEEAS customers 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 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 63 Hardship, rebate and HEEAS customers, by contract type, Number of customers on standing offers Number of customers on market offers Proportion of customers on market offers (%) Number of customers hardship only Number of customers rebate only Number of customers HEEAS only Number of customers hardship and rebate Number of customers hardship and HEEAS Number of customers rebate and HEEAS Number of customers hardship, rebate and HEEAS 1,411 10, , , ,171 13, , , , Total 116, , Source: Retailers' responses to the QCA's information notice (unpublished). 93 Momentum Energy 2018, Next Business Energy 2018 and Powershop 2018, responses to the QCA's information notice (unpublished). 129

137 Hardship, rebate and HEEAS customers In , 75 per cent of hardship, rebate and HEEAS customers were on market offers. This is similar to , when the proportion of hardship and rebate customers on market offers was 77 per cent. 94 Further, in , 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 , 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 to 75 per cent in 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 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 , 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 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 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 report. 95 AER 2018b. 96 ACCC 2018b, section (recommendation 3) and section (recommendation 32). 130

138 Hardship, rebate and HEEAS customers 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 2). 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 64 Weighted average annual bill by residential tariff / tariff combination and offer type, 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, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,990 1, , ,932 1, , Electricity rebate customers only Flat rate 1,564 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,962 1, , ,906 1, , HEEAS support customers only Flat rate 1,562 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,963 1, , ,902 1, , Thwaites, Faulkner and Mulder 2017 (recommendations 1 and 2). 98 AER 2018e. 131

139 Hardship, rebate and HEEAS customers Standing offer ($) (A) Market offer incl guaranteed discounts ($) (B) Difference ($) (A) (B) Market offer incl guaranteed and conditional discounts ($) (C) Difference ($) (A) (C) Hardship and rebate customers Flat rate 1,570 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,978 1, , ,912 1, , Hardship and HEEAS support customers Flat rate 1,592 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 2,013 1, , ,961 1, , Electricity rebate and HEEAS support customers Flat rate 1,564 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,957 1, , ,905 1, , Hardship, electricity rebate and HEEAS support customers Flat rate 1,567 1, , Flat rate with controlled load super economy Flat rate with controlled load economy 1,979 1, , ,928 1, , 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. 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 132

140 Hardship, rebate and HEEAS customers 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 64. Table 65 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate offers), Retailer Standing offer ($) Market offer incl guaranteed discounts only ($) Market offer incl guaranteed and conditional discounts ($) Proportion of customers receiving all guaranteed and conditional discounts (%) 1st Energy 1,670 1, AGL 1,571 1,568 1, Alinta Energy 1, Click Energy 1,881 1, Diamond Energy 1,681 Dodo Power & Gas 1, EnergyAustralia 1,655 1,621 1, Energy Locals 1,423 Lumo Energy 1,554 1,510 1, Mojo Power 1,510 Origin Energy 1,563 1,323 1, People Energy 1,461 QEnergy 2,033 Red Energy 1,520 1,506 1, Sanctuary Energy 1,607 1,607 Simply Energy 133

141 Hardship, rebate and HEEAS customers 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 Source: Retailers' responses to the QCA's information notice (unpublished); QCA analysis. Chapter 2 presented a comparison of retailers' standing offer and market offer bills that were generally available in the market in , 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 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 35). As explained after Table 64, this is due to the proportions of customers on each type of market contract. 99 See QCA 2017b, section for information on Origin Energy's Predictable Plan. 134

142 Hardship, rebate and HEEAS customers Figure 35 Weighted average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate offers), 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 66 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), Retailer Standing offer ($) Market offer incl guaranteed discounts only ($) Market offer incl all guaranteed and conditional discounts ($) Proportion of customers receiving all discounts (%) 1st Energy 2,166 1, AGL 1,968 1,967 1, Alinta Energy 1, Click Energy 2,454 2, Diamond Energy 2,091 Dodo Power & Gas 1, EnergyAustralia 2,035 2,009 1, Energy Locals 1,855 Lumo Energy 1,940 1,864 1,

143 Hardship, rebate and HEEAS customers Retailer Standing offer ($) Market offer incl guaranteed discounts only ($) Market offer incl all guaranteed and conditional discounts ($) Proportion of customers receiving all discounts (%) Mojo Power 1,863 Origin Energy 1,958 1,667 1, People Energy 1,746 QEnergy 2,654 1,630 Red Energy 1,896 1,876 1, Sanctuary Energy 1,933 1,933 Simply Energy 2,043 2,078 2, 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. 100 Source: Retailers' responses to the QCA's information notice (unpublished); QCA analysis. 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. The weighted average market offer bill including all discounts for hardship, rebate and 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 (5 per cent lower and 2 per cent higher than the average market offer bill). 100 See QCA 2017b, section for information on Origin Energy's Predictable Plan. 136

144 Hardship, rebate and HEEAS customers Figure 36 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), Sources: Retailers' responses to the QCA's information notice (unpublished); QCA analysis. 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 67 Weighted average annual bills for hardship, rebate and HEEAS customers on retailers' standing and market offers (residential flat rate with controlled load economy offers), Retailer Standing offer ($) Market offer incl guaranteed discounts only ($) Market offer incl all guaranteed and conditional discounts ($) Proportion of customers receiving all discounts (%) 1st Energy 2,043 1, AGL 1,911 1,909 1, Alinta Energy 1, Click Energy 2,336 2, Diamond Energy 2,034 Dodo Power & Gas 1, EnergyAustralia 1,976 1,949 1, Energy Locals 1,759 Lumo Energy 1,841 1,833 1,

145 Hardship, rebate and HEEAS customers Retailer Standing offer ($) Market offer incl guaranteed discounts only ($) Market offer incl all guaranteed and conditional discounts ($) Proportion of customers receiving all discounts (%) Mojo Power 1,842 Origin Energy 1,904 1,635 1, People Energy 1,743 QEnergy 2,516 1,591 Red Energy 1,841 1,831 1, Sanctuary Energy 1,929 1,929 Simply Energy 1,758 1,837 1, 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. 101 Source: Retailers' responses to the QCA's information notice (unpublished); QCA analysis. 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. The weighted average market offer bill including all discounts for hardship, rebate and 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 (3 per cent lower and 3 per cent higher than the average market offer bill). 101 See QCA 2017b, section for information on Origin Energy's Predictable Plan. 138

146 Hardship, rebate and HEEAS customers Figure 37 Average annual bills for hardship, rebate and HEEAS support customers on retailers' standing and market offers (residential flat rate with controlled load economy offers), Sources: Retailers' responses to the QCA's information notice (unpublished); QCA analysis. 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 when comparing to June As noted in Chapter 2, market offer bills generally reduced between and , 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 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. 139