Wednesday, October 24, 2012

Do energy consumers benefit from competition? It’s hard to see

Is competition good for retail electricity bills? Are the tens of thousands of households who change retail energy service provider each year actually getting a better deal? In the energy industry, it seems that loyalty doesn’t count for much, because nearly one-quarter of customers move each year. But many of them could be wasting their time.

The energy consulting group Exigency has crunched some numbers gathered by the charity group St Vincent de Paul Society, and it concludes that, on average,China CC Composite Heat Insulation Bar Manufacturers people don’t get a better deal when they move. Indeed, in New South Wales, as the first graph below reveals, they are probably worse off.

Some explanation is needed. The “off patch” component added to the top of the NSW graph shows the average price paid by customers who have moved energy service providers. It is a slight premium to those that have stayed. (Take note of the high network component).

In Victoria, as the second graph shows, those that do move are better off, on average, even if the margin of difference is not huge. What is interesting about the Victorian graph is the fact that the network component of the electricity bill has not moved much (perhaps that is a benefit of the privatised transmission groups), but the energy component of the bill (the cost of generation and retail margins) has jumped sharply.

That appears to be counter-intuitive to the sharp fall in wholesale prices experienced in the NEM, a subject of considerable complaint of the major generators, if not of the retailers. Although, once again, under the “gentailer” model, some play on both sides of the street.China Kevlar Fabric 415g/㎡, Unidirectional Manufacturers And Bruce Macfarlane of Exigency says because the energy component of a customer’s bill in Victoria is much higher than in NSW,China CC Composite Cover Plate Manufacturers that gives the retailers head room to have some competition.

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