Switching fail: businesses trapped with energy providers

The Australian Chamber of Commerce and Industry has warned small businesses are struggling to switch between energy providers. 

ACCI has raised its concerns in submissions to a review by the Australian Energy Market Commission of impediments to customers switching their electricity retailer.

In its submission ACCI says switching can take too long, contains unnecessary restrictions, imposes unnecessary costs and is seen as a significant impediment to switching by small business.

“The maximum time allowed to switch retailer in most parts of the National Electricity Market is also excessive, with the NEM allowing the longest time to switch retailer of all those countries compared in the issues paper,” ACCI said in its submission. 

ACCI is pushing for simplified regulation, streamlined jurisdictional differences, a reduction in the maximum switching time from 65 days, limited objections to switching and shorter and more flexible cooling-off periods for new energy agreements. 

ACCI’s acting chief economist, Burchell Wilson, told SmartCompany small businesses can feel particularly trapped by their energy provider.    

“Small businesses tend to have more limited resources to navigate the retail offerings so they have less scope to negotiate their contracts and less time and information when it comes to discerning what is the best offer for them,” he says.

Wilson says there “tends to be more obstacles” to switching for small businesses. 

Kate Elborough, manager consulting at the Victorian Employers Chamber of Commerce and Industry, says changing energy providers can be time-consuming, so VECCI encourages businesses to do their research. 

“It is difficult for small business to compare the different electricity offers, similar to mobile phone offers, products are bundled so they are difficult to compare,” she says. 

“Businesses should also look at other elements such as customer service and not just price alone.”

But the Energy Networks Association suggested in its submission to the AEMC that switching delays are a result of outdated metering equipment and claims more smart meters will improve switching times. 

An options paper on improving the switching process is expected from the AEMC this month. 

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