Runaway power prices are making life hard for Australian families. While our politicians argue about the reason prices are rising, people are shivering in winter, sweltering in summer and making grim sacrifices to pay their bills.
This situation is tragic, but there are levers the government can pull to lift the burden. For when it comes to power, Victorians have a lot of choice. About 30 companies are jostling for our business. But it’s a bit like walking around Costco: lots of options, brands you didn’t know existed—and all frightfully overwhelming.
‘Shopping around’ can truly save you money. Research by St Vincent de Paul Society found a household with average energy needs could save hundreds of dollars a year if they switched from the worst deal on offer to the best deal.
But consumers shouldn’t be left to navigate this jungle alone. The Victorian Government should help people get cheaper power by introducing an independent Victorian Energy Broker.
A broker would find better power deals on people’s behalf. As a consumer, you could call the broker and tell them about your household energy needs. They would then suggest the best deal for you. They wouldn’t be paid on commission or by the power companies, meaning you could trust their advice.
Private energy brokers already exist for businesses, helping companies pay less for power. So if it’s good enough for business then why not the rest of us?
Everyday Victorians should be able to benefit from the same type of service.
A Victorian Energy Broker would help people overcome what is sometimes called ‘inertia’—that feeling you get when faced with too many options and confusing jargon, when you just give up and stick with your existing power provider.
The broker could give people the confidence to change, weighing up the pros and cons of pay-on-time discounts, assist with the technicalities of switching and also play a proactive role, helping people before they hit a crisis point.
And a broker could intervene where people are at risk of paying too much for power, by searching for people who have not switched energy companies for a long time and letting them know about better value deals. (At the moment, unfortunately it’s a case of ‘snooze and you lose’ for Victorian households. This should be reversed: if the power companies snooze, they should lose.)
To ensure maximum effectiveness, the Government could also compel energy companies to refer people to the Victorian Energy Broker when their current power deal finishes – whether at the end of the ‘benefit period’ (i.e. when a bill discount runs out) or the end of the contract.
This would ensure every Victorian knows about the service.
Victorians shouldn’t be left to navigate this jungle alone. The government should help people ‘switch and save’.
The Victorian Energy Broker would play another important role. It would give health care workers, financial counsellors, emergency relief services and community caseworkers—who see people struggling with high power bills every day but may not have the time or capacity to help—a place to refer people for assistance.
It should be acknowledged the Victorian Government is already doing some commendable work in this area. This includes running a free energy comparison website – Victorian Energy Compare – and supporting a pilot energy broker service targeted specifically at those people already accessing the power companies’ hardship programs and people from culturally and linguistically diverse backgrounds.
These are positive initiatives, but are limited in their scope and effectiveness. A comparison website is only useful if you have access to the internet and are confident using websites while the pilot program is narrowly targeted.
But energy is no longer a niche issue. All Victorians are suffering under the burden of skyrocketing power prices—and all Victorians deserve help.