Electricity bills made worse by network costs and confusing fees, report shows

Consumers are being slugged with rising electricity bills boosted by big network costs and confusing fees from energy retailers, according to a new report.

The analysis, from St Vincent de Paul Society and Alviss Consulting, showed network costs charged for poles and wires made up as much as 60 per cent of some electricity bills.

The report considered most states in Australia but did not take into account Western Australia or the Northern Territory, which are not part of the national energy market.

Gavin Dufty, the manager of policy and research at the St Vincent de Paul Society in Victoria, said the most expensive charges were in country New South Wales and country Victoria.

"We don't think people are really aware of what makes up their bill and what they can do about that," Mr Dufty said.

"So for example, the cheapest network costs we found are in the city of Melbourne, which are only paying about 24 per cent of their bill in network prices, whereas 58 per cent of people's bills in country NSW is due to poles and wires.

"The reason why those poles and wires costs vary so much is because in country NSW there's lots of poles and lots of wires and not a lot of people to pay for those wires."

Consumers can get informed to pay less

Network charges are overseen by the Australian Energy Regulator, limiting what consumers can do about costs.

But Mr Dufty said there were other ways consumers could pay less for their electricity, starting with getting informed.

"Wholesale costs (of electricity) vary from around 13 to 22 per cent in each bill, depending on which state you're in," he said.

"Then what's left on the bill is the retailing component, the cost to get the bill to you, to answer the phone, and to do the other things that retailers do.

"What we're seeing is the Victorian retailer costs in particular go up over time, so we think there is less competitive pressure in Victoria."

Mr Dufty said it was a message for states like Queensland and New South Wales - which were deregulating their prices - to learn from the Victorian experience.

Report addresses consumer confusion over bills

The report, funded by the St Vincent de Paul Society and the National Consumer Advocacy Panel, recommended standardising the presentation of costs and charges on bills and offers to make it easier for consumers to compare retailers.

"A number of companies call the same thing different things as well - some are a supply charge, some are an availability charge, some are a service charge and some are a fixed charge - and in doing that we think that is just creating customer confusion," Mr Dufty said.

"What we're suggesting is - like you have a tin of baked beans in a supermarket, you turn over the back and every tin of baked beans has the same description of what's in the beans.

"We think a similar template on the back of all bills which allows easy comparison and no confusion for customers so it doesn't matter which company they're with, each bill looks the same."

Energy Retailers Association of Australia (ERAA) spokeswoman Alex Fraser said retailers understood the electricity system and markets were not well understood by most customers.

"Consumers need to be aware that more than 85 per cent of retail electricity bills are determined by the wholesale cost of electricity and network charges as well as green schemes - all of which retailers have to pass through to end consumers," Ms Fraser said.

"As retailers are the billing agent for the entire electricity industry value chain, we bear much of the consumer backlash over rising electricity prices while the retail component of the price rises are very low.

"As the energy spot market is highly volatile and changes in 30-minute increments, retailers absorb this volatility and provide consumers with products and packages.

"Retailers also provide a range of customer service functions while complying with comprehensive regulatory obligations, including the provision of hardship programs to customers struggling with payment difficulties."

SA hit with biggest increase in bills, ACT the least

Since 2009, South Australians have been hit with the biggest increase in electricity bills.

According to the report, which tracked gas and electricity prices for the past five years, the average annual bill in South Australia was almost $2,500, compared with $1,400 in 2009.

"There has been significant price increases everywhere since 2009, and in some places that's been over a $1,000 a year difference from what they were paying in 2009 to what they are paying in 2014," Mr Dufty said.

ACT households paid the least for electricity, with an average bill of just over $1,500 a year.

Ms Fraser said the ERAA encouraged people to research the best offers available to them.

"Speak to your current retailer and see if you can get a deal which could suit your requirements better than the plan you are currently on," she said.

"You can also look at other offers from other energy companies by visiting the independent website www.energymadeeasy.gov.au to compare offers and get the best deal for your household."