Families lose out as energy providers exploit reforms

spokesman Simon Downes.

“It is especially important that families or any large households put some time aside to review their electricity plan.”

It was Canstar that identified usage charge increases of up to 57 per cent on “market offers” — the type of deal four out of every five households are on. Mr Downes would not say which retailer had hiked its usage charge to this extent.

Canstar found there had been falls in the other charge that makes up bills — the daily connection fee.

However this has a relatively small impact on all but low-use households.

The bill banditry has emerged as new data from the Australian Energy Market Operator shows the number of households changing provider slumped by 24 per cent in July compared to a year earlier.

The market operator refused to comment, but analysts at investment bank Macquarie said the decline was due to the recent reforms, which have had the effect of reducing headline discounts.

Macquarie has estimated the fall in “churn” would deliver AGL a saving of up to $80 million. AGL has just 12 per cent of the market, meaning collectively, power retailers could benefit by hundreds of millions of dollars.

“It costs money to retain customers,” Macquarie’s Ian Myles said. “So you can have fewer people in the call centre.”

Canstar’s Mr Downes and others said a public information campaign was desperately needed to help households understand the key elements of the reforms, such as the reference price.

The reference price is the regulated rate from which all discounts must now be calculated. For each area it is based on a set amount of usage — typically about 4000 kilowatt hours annually — which is less than most families use.

A retailer advertising a deal is 10 per cent cheaper than the reference price only needs to ensure this is true for that set amount of usage.

Many have structured their plans, including existing tariffs, to have lower connection fees and higher usage charges.

A larger household on such a plan could end up paying more than the reference price, which is supposed to act as a price cap plus make it easier to compare offers.

“There has been very little education on how the reference price works and what it