AER Annual Retail Markets Performance Report

Written on the 8 December 2021 by SACOSS

The Australian Energy Regulator has released its Annual Retail Markets Performance Report for the 2020/21 Financial Year. You can see the full report here. 

Thanks to SACOSS for providing this summary: 

• In SA, low-income customers pay (on average) 4.9% of their income on electricity costs.
• Electricity prices are highest per unit in South Australia, where network costs are above the national electricity market average.
  • Wholesale costs have also typically been higher in South Australia.
  • Although wholesale costs in South Australia fell below some other jurisdictions in 2020–21, these cost reductions were unlikely to be immediately reflected in retail prices.
• Electricity was more affordable in Victoria than elsewhere and least affordable in Tasmania and South Australia
  • Tasmania has overtaken South Australia as the least affordable jurisdiction for both average-income and low-income households, despite relatively low electricity costs on a per unit basis.
• Average debt for both electricity and gas customers on hardship programs has increased substantially. The upward trend has been observed over several years but has grown steeper during the pandemic.
• Average electricity debt of SA customers (NOT on a hardship program) was $1,277 (nearly $300 higher than the national average and second only to Tasmania) in 2020/21. This was an increase of around 13% in the last 12 months on 2019/20 levels (of $1131 average non-hardship customer debt).
• In 2020/21 SA had the second highest (after Tas) average hardship debt on entry into hardship programs of $2,084 (up $1000 since 2015-16).
• SA had the highest average hardship customer debt of $2,438 in the national electricity market. Average hardship debt across the jurisdictions was $1,724 in 2020–21.

Concessions 

• Tasmania had the highest proportion of hardship customers receiving concessions at 72%, South Australia had the lowest at 40% 
• Before the COVID moratorium on disconnections, most disconnected customers in South Australia had debt levels of between $500 and $1500, in 2020/21, 41% of customers were disconnected with a debt greater than $1,500.
• South Australia had the highest disconnection rate of any national energy market jurisdiction in Australia, (.49%, nearly double the national average of .26%)
• Of the 3878 customers disconnected in SA during 2020/2; less than a third had been on a payment plan in the previous 12 months.

Payment plan and hardship supports 

• Fewer customers were receiving supports from their retailer than in previous years. Only 1.6% of customers in SA were on payment plans in 2020/21 (down from pre-pandemic levels of 2.2%), and 1.68% of customers were on hardship programs, down from 2.05% in 2018/19 (see hardship customer numbers in Figure 3.18, below).
• In 2020/21, slightly more customers were on payment plans than the previous year (13,149 customers in 2020/21 compared to 11,900 customers in 2019/20), but this is still well down on pre-pandemic numbers in SA (17,312 customers on payment plans in 2018/19) and doesn’t reflect the increasing debt levels.
• Fewer customers in SA were receiving hardship supports in 2020/21 than previous years. 13,425 hardship customers in 2020/21, (compared to 15,933 customers in 2018/19 and 15,218 hardship customers in 2019/20)
• Referral to external credit collection agency in 2020/21 - 5,098 customers were referred to an eternal credit collection agency in SA in 2020/21– this is 4 times more than in 2019/20 – 1180 customers -  (or an increase of 332%)