The Minister for Industry,
The Hon. Lily D’Ambrosio MP,
Level 36, 121 Exhibition Street,
Uncompetitive Energy Comparator Code
On October 7, the Consumer Utilities Advocacy Centre (CUAC) released its Energy Comparator Code of Conduct, a voluntary code designed to guide the behaviour of energy comparison sites. CUAC is largely funded by the Victorian Government.
The mission of CUAC is:
“To ensure the interests of Victorian consumers, especially low-income, disadvantaged, rural and regional and indigenous consumers, are effectively represented in the policy and regulatory debate on electricity, gas and water.”
The development of a code is indeed welcome, as the industry has seen some poor behaviour and standards being applied in the past.
Unfortunately the Code has a fatal flaw. It states:
“We will display only products provided to us by a retailer with whom we have a commercial relationship.”
How could this provision possibly be in the interests of consumers? In consulting regarding the draft code, CUAC received responses from 6 organisations. Two of those specifically rejected this proposal on the grounds that it was not in the interests of customers (see attached). CUAC gave no reasons for rejecting these submissions.
We believe that it is not appropriate for CUAC to base its code entirely on how the industry has operated in the past. The current structure has resulted in retailer margins in Victoria being twice those that apply in other States. The new Code does little, if anything beyond what ACCC guidelines already do, except offer marketing kudos to the current players and restrict new models.
It should also be noted that in the UK, the regulator requires all comparison services to compare all retailer offers and the margins there are 9% compared with 22% in Victoria.
Energy Umpire compares all retailer offers and is advocating for all comparison sites to be required to compare all offers and certainly not be precluded from doing so. Energy Umpire acquires its information about all retailer offers from its affiliated retailers and the impeccable source of the Victorian Government website. It updates this information regularly. It is also worth noting that the Victorian Government comparison service is not in compliance with the CUAC code.
There must be questions about the propriety of an industry committee developing a code that so blatantly supports their existing way of doing business.
I respectfully request that you ask the CUAC Board why the Code should not be withdrawn pending a review of this clause and the propriety of the development of the code.