Power bosses need to get on board with fairer pricing. Analysis

Power bosses need to get on board with fairer pricing.

There are two ways you know Victoria is on the right track with its plan to introduce some price controls for power bills.

One is that consumer groups and independent energy experts say it is. The other is that the big power companies are squealing like cats caught in a drainpipe.

And the more they stomp, spit, squeal and hiss, the more confidence you can have.

The flashpoint for outrage has been the State Government’s decision to act on the recommendations of an independent review and introduce a Default Offer. This is a government regulated, fairly-priced energy deal that every Victorian will have the right to access.

The Default Offer is recognition that many people are stuck on expensive and intentionally confusing energy plans, and lack either the time, the skills or the knowledge to broker a better deal.

Have you tried changing on to a better deal lately? It requires a PhD, a tonne of patience and a day off work.

The Victorian Default Offer means less profit creamed off by the retailers and a crackdown on confusing discount advertising. And that’s exactly why the energy companies fear this shift to put power back into the hands of consumers.

Industry predictions of energy retailers closing or firing workers because of the new regime have already begun.  But this breathless outrage ignores two facts.

Firstly, that good businesses adjust to changing market conditions all the time. That’s their job. And secondly, that Australia’s big power companies made billions of dollars in profit last year and have some of the fattest energy profit margins in the world, according to the ACCC. All this for companies delivering an essential service.

Cry me a river.

In truth, the status quo is completely untenable. Wild market deregulation hasn’t worked.

The ACCC tells us the poorest households are paying some of the highest prices for power.

More than 50,000 Victorians had their power cut off last year because they couldn’t afford to pay the bill, while countless others are making heartbreaking sacrifices like skipping meals or cutting out heating, just to stay connected.

Change is necessary, and it can’t come soon enough. If the power companies want to rebuild their tattered relationship with Victorians they could start by getting on board with this important and worthy reform.