Report shows electricity prices falling and greater retail competition

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The Independent Pricing and Regulatory Tribunal of New South Wales (IPART) has released the draft report for 2020-2021 into the NSW electricity retail market.

In this article, we will guide you through the most important implications involved in the report.

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More electricity retailers in the market?

There has been asignificant increase in the number of retailers entering the market over the past two years, with eight new retailers entering the market in 2020-21.

There are now 40 retailers providing offers in the NSW market, more than three times the number of retailers compared to 2013-14 when the IPART first started monitoring the market (see below)

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Electricity prices are falling

Retailers are competing to offer customers lower prices. In 2020-21, the lowest prices in the market were around 35% lower than the highest prices. Prices have fallen from their peak in 2017-18 and are now lower than in 2013-14 when IPART began monitoring prices.

Prices have fallen by around 5% since June 2020. In the figure below, the change in median offers for residential electricity offers for 2020-21 and 2021-22 by network area and offer type (based on 4,125 kWh of electricity purchased) is shown.

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Increasing variety of innovative offers and non-price incentives

A wide range of offers have been tailored tocustomers interested in purchasing solar panels and batteries. These include planswhere the customers pay little or no upfront costs for their solar panel andbatteries. Instead, customers pay in fixed instalments which cost less thanwhat they are currently paying for their electricity.

There are also incentives available to other customers such as reward programs, flat monthly usage plans and free electricity on particular days. Retailers are also focusing on the customer service experience, making billing information clear and simple to understand,and improving the accessibility of account information.

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Customers continue to switch retailers to get a better deal

More than 20% of customers changed their retailer in 2020-21, which has been between 17% to 21% over the previous two financial years.

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Sentiment and confidence has improved

There has been an increase in reported satisfaction with electricity retail services over 2020-21, and the number of electricity related complaints to the Energy & Water Ombudsman NSW (EWON) were lower compared to previous years.

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Wrap up

-   IPART completes an annual report to monitor and regulate the retail electricity market of NSW

-   The 2020-2021 draft report outlines important findings in terms of retailers’ competitiveness and performance, where many retailers entered the market and are offering innovative solutions for customers to lower the prices they pay for electricity.

-   Customers have shown more confidence by having a participative approach in the market by switching retailers and promoting competitiveness and also reducing complaints in their electricity services

-   The NSW market prices are significantly falling with percentages between 5-25% since IPART started monitoring the market in 2014

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Sources

https://www.ipart.nsw.gov.au/

https://www.ewon.com.au/

https://www.energynetworks.com.au/members/essential-energy/

https://www.ausgrid.com.au/

https://www.endeavourenergy.com.au/

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