Embedded customers left paying the price

About 200,000 Australian power customers are trapped on deals they have to pay hundreds of dollars to get out of as energy prices skyrocket.

electricity power poles

Electricity monopolies are trapping people into long term power supply agreements. (AAP)

Australians struggling with skyrocketing power bills are constantly told to shop around, but that's not an option for 200,000 customers trapped in embedded networks.

Apartment developers are increasingly signing up buyers to embedded networks, originally designed for caravan parks, locking residents into deals they can't switch from unless they pay hundreds of dollars to get a new meter.

The networks involve one company controlling the power supply to a building, and residents have no option but to pay them for electricity.

Melbourne's Ed Giles bought off the plan in Collingwood only to find the meter he paid for was now owned by an energy company he was required to buy power from.

"The developer of our building chose to have an embedded network installed so we are stuck on it," he told AAP.

"These uncompetitive electricity monopolies are trapping regular people like us into power supply agreements that don't give us access to the open market."

Australian Energy Regulator chair Paula Conboy agreed it can be "difficult" for customers on embedded networks to get better deals as prices rise.

"There's around 200,000 Australians in embedded networks and that number is growing," she told AAP.

"Customers in embedded networks have the same right to choose their energy retailer as any other Australian household or business.

"But we recognise that changing retailers when you are in an embedded network, like an apartment building or a caravan park, can be difficult."

Rules were changed in December to make sure customers on the networks can get access to competitive energy markets, but residents say the process is unclear and expensive.

Melbourne's Jason Bond was told it would cost as much as $500 to get a new meter installed, and he would still have to pay network charges to the original company he was forced to go with.

"I am being told that if I pursue this option, I will wear the extra additional cost to switch over," he told AAP.

"We're meant to be in a competitive market but this seems anything but."

The regulator now requires power companies to employ a manager to help customers switch over, but it's understood some retailers often consider the process more trouble than it's worth.

Energy Minister Josh Frydenberg was asked what the government was doing to help customers stuck on the networks as prices shoot up, but his office directed questions to the regulator.


Share
3 min read

Published

Source: AAP


Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world