Electricity bills continue to make up a high proportion of household bills,
but consumers feel they have no control over rising costs

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  • 49% of Australians say that their electricity bill accounts for a high proportion of their total household costs and is increasing.
  • 75% of people examine their bills to see how much electricity they have used, and more than half this group wait until the due date to pay their bill.

Wednesday, 10 April 2013 — Receiving a high bill is the top reason why Australians would consider changing their electricity provider, yet despite rising costs, 45% have never made the switch.

These latest findings follow EY’s initial Customer Experience Series - Utilities (pdf, 431kb) survey conducted in August 2012, which found consumers were apathetic about switching electricity providers because of the perceived time and effort involved.

Almost half of all consumers (49%) now say their electricity bill accounts for a high proportion of their total household costs and is on the rise. And 41% ranked rising energy bills in their top three most stressful issues.

EY Customer Leader, Advisory, John Rolland said of the people who felt their household bills had increased over the past year, the growth in electricity bills was seen as the most significant price hike as compared to water, gas, food, mortgage and mobile phone bills.

“Not only are electricity bills considered to make up a high proportion of household costs, they are felt to be increasing at a rate which is far greater than other household costs,” he said.

On average, three quarters of people say they sometimes worry about paying their electricity bills. This is highest amongst those under 40, with 86% expressing concern about paying their electricity bills, compared to 64% of those aged 40 years and above.

Mr Rolland said the latest survey showed that 76% of people usually look carefully at each bill to assess how much electricity they have used, with more than half of this group waiting until the due date to pay their bill.

“This points to a more sharpened awareness of costs, with consumers looking to control their bills in any way they can,” Mr Rolland said.

Mr Rolland said customers were looking for real strategies to help them keep their electricity costs down, with the most appealing solution the idea of being proactively notified if their bill was going to be higher than usual (23% ranked this first). Other strategies included:

  • Providing a real time online tracking tool to help monitor usage (18%).
  • Offering a price plan where you pay a fixed cost each month allowing you to use a certain amount of electricity (18%).
  • Allowing you to remotely control devices in your home via mobile/tablet/online (17%).
  • Providing room and/or device energy consumption on bills (15%).
  • Advising on the optimal time of day to use appliances to save money (10%).

The survey identified four groups of consumers with different first preferences around what they wanted their provider to do to help them keep costs down:

  1. ‘Price Watchers’: Cost and certainty are the main considerations for this group, so a fixed cap price would be a big draw card.
  2. ‘Info Seekers’: Feel empowered by knowledge, so they would be keen for advice on optimal time of day to use devices.
  3. ‘Bill Managers’: This group takes an active role in bill management so they would be interested in real-time online tracking tool or room/device consumption on their bill
  4. ‘Control Seekers’: want their electricity usage to fit with their lifestyle so they would be interested in remotely controlling devices via their mobile or tablet.

Mr Rolland said while Australians hadn’t been rushing to switch electricity providers to date, there were signs that the landscape was changing.

Less people are dropping out of the switching process before they do anything about it – down from 29% to 22% in 2013. And fewer people are giving up at the information searching phase - down from a 50% drop-out rate since mid 2012 to 36% drop-out rate, which suggests further engagement and commitment to switching.

“While it may seem an outdated concept, of those who had switched providers in the past, about a third were prompted to switch by a door-to-door salesperson,” Mr Rolland added.

EY Oceania Utilities Leader Matthew Rennie said: “Customers are now reacting to rising electricity bills like never before, with rising prices and the increased penetration of solar energy causing energy demand and usage to decline across Australia for the first time in decades.

“We are also seeing Governments take action to reform the energy sector, particularly in the Queensland and NSW networks sectors, to ensure that underlying costs remain under control.

“Electricity retailers can either see this volatility in the energy market as a risk or an opportunity. Intelligent retailers will take positive action to respond to consumers who feel they lack the control to do anything about rising electricity costs and provide them with a solution, whether through retail margin reductions or innovative service offerings, to attract and retain them,” Mr Rennie said.

The Customer Experience Series - Utilities findings are based on both quantitative and qualitative data collected from more than 650 electricity customers, across metropolitan and regional New South Wales, Victoria and Queensland. The Series also draws upon the findings of a 20-year Australian longitudinal study, AustraliaSCAN1 which identifies key social trends and measures culture change.

The State findings from the Customer Experience Series - Utilities, include:

  • Queenslanders were significantly less likely than others to have switched electricity providers before for any reason (48% vs. 70% Australian average).
    • This was linked to a lack of provider options available for many, with 20% of Queenslanders saying that they gave up on any attempt to switch due to ‘having no other providers in my area to choose from’.
  • While about a quarter of NSW (23%) and QLD (27%) residents say that they have never heard of the term ‘Smart Meter’ before, this was significantly lower in Victoria (3%).
    • Additionally around three quarters of those in NSW (79%) and QLD (71%) say that they do not have a Smart Meter installed at their property (compared to 62% of Victorians who say that they do have one installed).

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1AustraliaSCAN conducted by Quantum Market Research has been measuring social values and cultural change by interviewing a random sample of 2000 Australians each year.

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Contact details:

Katherine Rellos
EY Australia
Tel: +61 3 9288 8322 or 0411 245 099