Interview with David Bevan, ABC Radio Adelaide

Transcript

27 September 2018

E&OE

DAVID BEVAN: Angus Taylor, Federal Minister for Energy, welcome to ABC Radio Adelaide.

ANGUS TAYLOR: Thanks for having me.

DAVID BEVAN: Now, this has been a problem for people here in South Australia. We went for the privatised option about 20 years ago now, and ever since then you've had to get an energy retailer, but the cost of your power can go up after you've signed up with a retailer. What can you do to give people fair warning?

ANGUS TAYLOR: Well, we can make sure that they're warned if there's going to be a price change. Most importantly, this gives them the opportunity then to get on the phone to that retailer - and potentially to others - and say: ‘No, I want a better deal’. The truth is, if you do that, and you haven't done it before, the chances are you're going to get a discount. What is crucial here is to have a trigger where people know to do that. You know, not all of us are used to the idea that you've got to jump on the phone to get yourself a discount, but it is very important people understand that it's not hard to do. There's a very good website called Energy Made Easy that allows you to go in and see how you might do that, but it is as simple as just getting on the phone to your retailer and saying: ‘I'm going to switch if you don't give me a better deal’. If you shop around, there is a chance you might be able to get a better deal anyway, but sending that message to your retailer that you're in control, you're the customer, you don't deserve to be ripped off - that's not only allowed, we strongly encourage it, and this will give time, it will give a trigger so that people know when they need to do that.

DAVID BEVAN: And in the past you wouldn't have known that the cost of power had gone up until you got your bill.

ANGUS TAYLOR: That's exactly right, and that’s a completely unacceptable situation. The whole point of what we're trying to do with these reforms and these other accompanying reforms is to put the customers in charge. The best regulator of any industry - the people who know most about what they want - are the customers. This is one of a series of reforms we're putting in place to put the customer back in control, to discipline the retailers, to make sure that the customers actually have the information they need to get the deals that they deserve.

DAVID BEVAN: Okay, so if a retailer wants to put up the rate at which they charge the customer for their power, they will from when have to give how much notice?

ANGUS TAYLOR: They've got to give at least five days', at least five days’ notice, before they're able to do that, and that gives you the time then to jump on and say: ‘No, that's not on, I'm going to go somewhere else’.

DAVID BEVAN: And when does this new rule kick in?

ANGUS TAYLOR: It comes in from the 1st of February next year, the 1st of February 2019.

DAVID BEVAN: Okay, and penalties will apply if they don't-

ANGUS TAYLOR: Absolutely, penalties will apply, and we will be monitoring this very, very closely. I think the big energy retailers know they're on notice on these sorts of issues now. The ACCC, the competition regulator, has done a lot of work on where their behaviour hasn't been what it should have been, and we're watching them like hawks now.

DAVID BEVAN: Now, Ian sent us a text asking: ‘What about fixed 12-month contracts? Are people penalised if they want to pull out of a contract?’ So okay, I'm six months into a contract with a retailer, they then send me five days' notice as required by Angus Taylor, the Federal Minister for Energy, saying David, ‘We're going to put up the cost of your power’. And I say: ‘Oh, well that's no good’, I'll ring them up and say I'm going somewhere else, and they say: ‘Well, try it David, there'll be a penalty’. Does that apply?

ANGUS TAYLOR: Well, it just depends on your contract. I'm not going to give people individual advice on their contracts, but what I would say is if you ring up and say: ‘This is not on and I deserve a better price and I’ll go elsewhere if you don't give it to me’, there is a very good chance you're going to get a better deal. I would say to people, just don't hesitate - pick up the phone and say this is not on. The truth is that if they've locked you in on a price in a contract, then they can't move it anyway, right? So it just depends on the terms and conditions.

DAVID BEVAN: Okay, so if they say, look, you cannot get out of this contract, then the price should be fixed as well?

ANGUS TAYLOR: Well, it depends on the terms of the contract, but if you've got a fixed price contract, they can't.

DAVID BEVAN: Well no, no, if it's fixed price-

ANGUS TAYLOR: They can't raise it obviously so-

DAVID BEVAN: -but you want to be careful what you're signing up to-

ANGUS TAYLOR: Yes, of course.

DAVID BEVAN: -because it might be a fixed contract in which the price can go up, and then you're stuffed.

ANGUS TAYLOR: Exactly right, but you know, the crucial thing here is to go in with your eyes open. Even more important than that, don't hesitate. I'm conservative by nature with these things, and the idea of getting on the phone and saying to someone: ‘Hey I deserve a better price’, is sort of, you know – whilst I’ve been in business many years - with electricity retailers that's not always my first instinct. But the truth is, I know-

DAVID BEVAN: You're not the shy, retiring type are you?

ANGUS TAYLOR: No, it's just that we're not used to the idea that we have to do that. I've got in front of me, the difference between the prices I would get from different retailers for my own bill - right in front of me here. There is $250 difference between the highest one and the lowest one. These are big numbers. This is on the Energy Made Easy website. This is my own situation. So there's a big difference in the prices that are being offered. You just need to get on the phone and ask for that difference.

DAVID BEVAN: You would be in a unique position, wouldn't you, if you thought you were being ripped off by an energy retailer and you ring up and say-

ANGUS TAYLOR: You're telling me.

DAVID BEVAN: And they say: ‘Oh I'm sorry mate, there's nothing we can do for you’, and you say: ‘Well, you better watch the papers tomorrow because my name's Angus Taylor, I'm the Federal Minister for Energy. Brian has called from Morphett Vale, hello Brian.

CALLER: Yeah, one of the questions was is the notice in writing?

DAVID BEVAN: Well, that's a good question because they could send you a text, couldn't they? Does it have to be in writing?

ANGUS TAYLOR: Yes they need to notify you properly in writing – that’s clear.

DAVID BEVAN: As in a letter, a piece of paper?

ANGUS TAYLOR: Yes. Well, look, some customers like to get things by email - I actually happen to be one of those - but everyone has different preferences on these things.

DAVID BEVAN: Okay but whatever agreement you have with your retailer to be notified-

ANGUS TAYLOR: You must be notified. It must be clear that through your preferred means of being notified, you've been notified.

DAVID BEVAN: So, it says that in the regulations does it, bringing in these new laws?

ANGUS TAYLOR: Well, the regulations are coming into place now, but it will be very clear that they've got be notified - if someone doesn't have a mobile phone and they try to send a texts, that's not going to work.

DAVID BEVAN: So if your correspondence with your retailer is through the old snail mail, through a physical letter, then that's how they'll have to notify you?

ANGUS TAYLOR: Of course. If that's how they communicate with you, that's how they're going to have notify you.

DAVID BEVAN: Minister, before you leave us, the State Government here in South Australia are still very keen on the interconnector. It's not too clear how it's going to be paid for but the state opposition raised real concerns about this. Labor used to be in favour of an interconnector but they got second thoughts about it and they say this is policy, it's not being driven by ideology. This is Labor's Tom Koutsantonis, and he says: ‘I used to support it, I don't any longer, and the reason is if you put an interconnector in, we might get cheap power initially but eventually that will kill off any investment in new generation in South Australia and then we will be at the mercy of generators interstate and in the long run we're screwed’. What do you say to that?

ANGUS TAYLOR: Well, he needs to explain what he wants to do as an alternative. I'd take a step back from this and I'd say we have a problem in South Australia - it's not news to your listeners - prices are too high, we have reliability issues and we need to solve it. The reason that's happened is we don't have enough reliable baseload power that is available when it's needed for the South Australia market. That means we either need to get access to that from other states or we need more generation in South Australia. Frankly, I don't really care about the way we get to an answer, but we must get to an answer, because this is an unsustainable position in South Australia. It means we've got a great deal of generation - about 600 megawatts of wind generation - that's typically unused. So, to get to that situation, which is a huge waste of money being paid for by all of us, is completely unacceptable, we do need to have more generation available when needed for the South Australian market. As I say, it's either got to be in South Australia or in other states. I'm less concerned about the best way to do it - although an interconnector would be a very good way to do it - than I am to make sure it happens. It must happen as quickly as possible.

DAVID BEVAN: Before you leave us, Chris has called from Strathalbyn. Hello, Chris.

CALLER: Yes, thanks for taking my call. A month ago we were told that the NEG was going to save us $550 a year-

DAVID BEVAN: Yes, that's gone.

CALLER: That's gone. The Prime Minister's gone. They won't tell us why. All they can tell us is what to do when our power prices are going up.

DAVID BEVAN: Angus Taylor, what do you say to Chris?

ANGUS TAYLOR: Thanks for question, Chris. That is not right. We are doing a whole series of things to get power prices down. Our energy policy is absolutely squarely focussed on lower power prices while we keep the lights on - reliability as well, of course - helping customers to make sure they are not getting ripped off, and saying to the energy retailers that we will come after you if you try to rip off customers, is a crucial part of policy - of course it should be. So too is making sure we've got enough generation in the market to keep prices down and to keep the lights on, like we've just been discussing. As well as making sure that the retailers set a fair price for people who haven't got time to negotiate, and as we call it, the default market offer is something that will be coming in next year, which will ensure that those who for one reason or another just haven't had time to negotiate are still getting a fair deal. That will be driven by the Federal Government to ensure that people are getting a fair price. So there's a whole series of initiatives here, they interrelate and they are squarely focussed on getting prices down while we keep the lights on.

DAVID BEVAN: Minister, thank you for your time. Next time you're in Adelaide, we'd love to have you in the studio. Lots of questions and texts coming in.

ANGUS TAYLOR: Cheers.

Minister for Energy