Separate figures also released last week by the National Electricity Market Management Company (NEMMCO), indicate that customer competition is continuing unabated, with a monthly record of 66,105 customer transfers achieved in July 2007. If repeated over a twelve month period, this would amount to an annual customer churn rate of over 30 per cent.
The world rankings are based on a benchmarking study of customer switching behaviour in retail energy markets across the world that have been “˜fully liberalised’, or in technical terms, opened to Full Retail Competition (FRC).
FRC allows individual households and businesses to choose their supplier of retail electricity and gas from a range of competing suppliers and offers. This allows them to obtain retail energy terms and conditions that are best suited to their needs.
While Victoria was assessed as the number one market for customer switching in 2006 with nearly one in four customers switching supplier, South Australia also ranked highly at number three and New South Wales came in at number six.
Executive Director of the Energy Retailers Association of Australia (ERAA), Cameron O’Reilly said “As far as the experience of retail competition is concerned these figures indicate Australia has done it as well as anywhere and that our consumers are taking advantage of the right to choose supplier which FRC provides them.”?
The release of the First Data/VaasaETT rankings comes at a time when the Australian Energy Markets Commission (AEMC) is reviewing the effectiveness of competition in Victoria, with a view to ascertaining whether there is a need for ongoing retail price regulation or “˜caps’.
Mr O’Reilly said “While we would never seek to pre-judge the findings of the AEMC, these separate customer switching milestones are a timely reminder that competition is thriving out there in Australia’s retail energy markets – nowhere more so than in Victoria.”?
“These types of results would only be enhanced by the introduction of market-based pricing, under which even more new entrants would be attracted and retailers would be able to offer a broader range of market products.
“Ultimately, it is the vigorous competition for customers apparent in places such as Victoria and South Australia, combined with transparent Community Service Obligations (CSO’s) for vulnerable customers, that will lead to the best outcomes for consumers,”? said Mr O’Reilly.