In the news: energy rebates
You may have seen the news this week that the Victorian Government has struck a deal with the 'Big Three' power companies to give rebates to customers on standing offers.
From 1 January, EnergyAustralia, Origin and AGL will start returning at least $71 million on set-and-forget contracts that have left some customers paying much higher than average prices.
I love a win for the customer, and it's definitely a good start.
But let's be honest, it should have started well before the Government took action.
When talking about how the rebate was brokered, Victorian Premier Daniel Andrews said, "We made it clear to these energy companies that this was their last chance to do the right thing."
Last chance? Is that as good as it gets?
Surely all energy companies should start by doing the right thing instead. Things like:
1. Start by not hiding the real price behind discounts.
I've spoken out about the discounting war before. It can muddy the water for energy users. It makes it harder to work out what your energy will cost you and almost impossible to compare prices.
It's not just me who's questioning this practice.
The ACCC has concerns about discounting. They've described it as a barrier to consumers engaging with the market successfully. And the recent Thwaites Review says that discounts 'hide the ever-increasing base rates from which they are provided'. I'm not hearing any of these groups say that current discounting practices are good for customers.
Like any company, we make mistakes from time to time. But we're also genuinely trying to do the right thing. We used to offer discounts. But we decided customers needed pricing that's simpler and more transparent. That's why Momentum Energy now offers 0% off. No confusing discounts – instead, we focus on providing great rates customers can understand.
2. Start by treating customers fairly in the first place.
At some energy companies, you can be signed up to a discount rate that ends before your contract does. When the benefit period runs out, you can end up on a more expensive 'standing offer' where you start paying much more than you need to.
It's perfectly legal. But it doesn't feel very fair, does it?
No wonder the government has finally stepped in and asked the big energy companies to rebate customers who've been disadvantaged by this practice.
Now, Momentum Energy does have a handful of customers who've signed up to standing offers. And we've contacted them all and invited them to shift to lower market rates.
Seems fair, right?
3. Start by putting yourself in your customer's shoes.
When we do this, we don't have to wait for the 'last chance to do the right thing'. We'll already be doing the right and fair thing:
- Making pricing transparent so it's easier for customers to figure out if they're making the right move.
- Not using discounts that make it harder to compare prices.
- Not switching customers to the highest rate when there's a better alternative.
That's how I'd like to be treated.
I imagine it's how you'd like to be treated.
Managing Director, Momentum Energy