“To everything Churn, Churn, Churn
There is a season Churn, Churn, Churn”
–Ecclesiastes 3:1, Pete Seeger and Australian energy markets
For quite some time the responses of the energy market and decision-makers to the continued, rapidly rising price of electricity has been that all customers need to do is ‘engage’ with the market and choose the best deal for themselves. The promise has always been that there are considerable savings to be made from switching retailer and choosing the best market offer at the time. Indeed the measure of retail market ‘churn’ is regularly used as a measure to indicate that energy markets are ‘effectively competitive’, because of the numbers of consumers choosing to change retailer or at least change their contract. Indeed, customers in general are sometimes blamed for their high energy prices because they don’t adequately engage in the market.
Energy industry analyst Bruce Mountain from Carbon Market Economics has been saying on Adelaide radio today that in order to make a fully informed decision, he estimates that a customer would need to spend two hours a day gathering and analysing their data about their energy use, market offers etc, in order to make a fully informed decision
Seems to me to be a very inefficient use of time and effort.
Surely, effective markets are the ones where the ‘invisible hand’ moves to give customers the best possible prices, rather than churning the screws on household budgets so that people go without fresh food and medical care in order to pay their electricity bill.