CopowerPtyLtd

POBox53CliftonHill,306826October2015

The Minister for Industry, The Hon. Lily D'Ambrosio MP, Level 36, 121 Exhibition Street, Melbourne, 3000 By email Dear Minister, UncompetitiveEnergyComparatorCode

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. ThenewCodedoeslittle,ifanythingbeyondwhatACCCguidelinesalreadydo,exceptoffermarketingkudostothecurrentplayersandrestrictnewmodels.

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.

Yourssincerely,

(signed)

Alan Rattray, Founder Energy Umpire

alan@energyumpire.com.au Phone: 0418 190 783

Attachment–CommentsbyPowershopandEnergyUmpireonCUACcode

The CUAC Energy Comparator Code of Conduct states:

“We will display only products provided to us by a retailer with whom we have a commercial relationship.”

Powershop commented:

“That seems counter to consumers’ best interests. Provided that the comparator: • is indicating when they collected data (and from what source unless it’s from a Government

comparison site or the retailer’s own website); • agrees in the Code to promptly update offers that are identified by a retailer as being

inaccurate; and • agrees in the Code to notify any retailer whose offers are being shown, in advance of

showing or updating that retailer’s offer,

consumers would be better served by a list of results that is as complete as possible.

It will then be commercial sensible for retailers to provide accurate information to the comparators. Ultimately it should be up to the comparator to either: only show results from “partner” retailers; or to show results for all retailers of whom the comparator is aware and for whom pricing data can be obtained.”

Energy Umpire commented:

“This point, if left unchanged would unreasonably discriminate against our service which relies on comparing offers from all retailers. We update our offers regularly and also when we become aware of new plans. We consider that our service offers major benefits to customers when compared with a selective comparison of a subset of retailers.

A code of conduct that requires selective comparison of retailer offers would be unacceptable to us. It would unfairly favour existing selective comparison models while discouraging exhaustive comparisons for customers.

Rewording proposal: “When showing plans of retailers online with whom we do not have a commercial relationship we will display the date that the plan has been updated””