The jury is in – power companies languish on the bottom rung on the trust ladder. In a recent survey, conduced by Essential Research, electricity retailers were found to be less trusted than the media — ouch!
Let’s cut to the chase and present the data upfront, with commentary to follow.
|Total||A lot of trust||Some trust||Not much trust||No trust||Don’t know|
Even banks were “more trusted” to act in the public interest. We find this surprising given the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It begs the question: Who funded this survey? …was it the banks?
Who footed the bill?
Global smart meter manufacturer Landis+Gyr commissioned this survey. They appear to be concerned that a deep seated lack of trust in Australia’s power companies on the part of consumers, is creating a barrier to the uptake of their technology.
Landis+Gyr point to the survey findings as evidence of consumer cynicism with respect to the benefits of smart meters.
Consumers are correct to be wary. The estimated annual turnover of the data broking industry is $270 billion (US$200b). That revenue is shared between more than 4,000 data broking companies globally. Acxiom is a major player – they own data for more than 500 million consumers – and have an office in Australia.
It’s believed Acxiom collect up to 1,500 “data points” per person; from your income, to spending habits, and everything in-between. That’s more information than many of us know about our significant other! There’s a chance a data broker may be purchasing your personal information whenever you hand it over. Both online and offline. We recommend you read the fine print.
Many consumers have connected the dots and concluded that the goal of modern marketing is not simply to appeal to our desires, but to change our behaviours. Yet we seem to continue to welcome new technology into our homes without necessarily understanding the implications.
Take “smart speakers”. What does Amazon’s Alexa, Google’s Assistant, and Apple’s HomePod do with our data? (Hint: they use it to sell you more stuff!) We can rightly ask the same question of smart meters. Despite being less glamorous than the average “home assistant”, smart meters have already found their way into many Australian homes.
Data collected from these meters will be essential with respect to both managing existing energy infrastructure, and planning ahead. As well as influencing our behaviour as consumers.
Smart meters and the “Education State”
Victoria was the first Australian state to adopt smart meters.
The Victorian Government made the decision to mandate the rollout of smart meters in 2006. At the time, the average spot price of electricity on the NEM (National Energy Market) in Victoria was $32.47/MWh. In 2018, that price has increased 285% to $92.39/MWh.
While there has been a correlation between the rollout of smart meters and rising electricity prices, this doesn’t necessarily imply causation. But add bad policy into the mix. Victorian households had smart meters forced upon them, along with the bill. Every household had the same type of meter installed, in many cases the incorrect meter for the property.
George Maltabarow was Managing Director of Ausgrid for almost eight years, to June 2012. He’s an ambassador for Landis+Gyr and an energy industry commentator. (FYI, Ausgrid is an electricity distributor, supplying some 1.7 million sites across Sydney and surrounds.)
In a recent interview with Renew Economy, Maltabarow is quoted as saying, “The Victorians had the very worst of every possible world.”
“They devised a system that had all the wrong incentives. Retailers weren’t equipped to make the most of it… (and the networks) continued to over-build infrastructure. Even then, the Victorian Government in their wisdom made sure the cost was put on people’s bills. And when the consumer asked, ‘what am I getting for this? The answer was: a donut. Nothing.”
All things considered, it’s easy to see how the Victorian smart meters debacle has undermined consumer trust. Maltabarow sums it up, “There’s this suspicion that smart meters are a plot by power companies.” He says, “You’ve got to get products out there that win the trust of customers.”
Silver linings and second chances
Monique Spanbrook is General Manager of Marketing and Communications at Landis+Gyr Australia. Monique says consumers require education with respect to the upside of smart meters.
“If you’re going to put it in their home, but not offer any incentives or upsides, then of course [customers] won’t feel inclined to engage,” she told Renew Economy.
“But if you inform the customer that you could, one day, know how much each of your appliances are using, and make decisions around that, then you will get a different response.”
So, what are the upsides of smart electricity meters for consumers? It took some digging, but here’s what we came up with:
- Retailers can potentially give customers better insights into their energy consumption habits. So far, only a few retailers offer this information, via web portals.
- If your retailer doesn’t offer a portal, you can connect a device such as the Efergy Elite IR Smart Meter Energy Monitor to your smart meter and get a detailed snapshot of your energy consumption.
- With the help of smart meters, energy companies could show customers how much energy specific appliances were using in their homes. They could even send alerts if they detected a faulty appliance.
- Manual readings were a requirement of the old accumulation meters. This added cost as an army of workers walked from meter-to-meter, reading them. It’s possible to read smart meters remotely; theoretically, this reduces the cost of providing consumers with electricity.
Will these upsides be enough for energy companies to win back consumer trust?
Can power companies get back in favour?
More than two-thirds of Essentail Research respondents said they had either “no trust” or “not much trust” in energy companies. So it’s going to be a difficult climb off the bottom rung of the table.
Ultimately, however, the power companies do have several tools at their disposal to win back consumers. Smart meters are a good example. These devices should be a win for consumers. If used correctly, they can help all of us get a handle on how efficient our appliances are, ultimately help us save money. If used well, they should also reduce the need for future upgrades to the power grid, and even help manage peak loads.
The policy adopted by the states (other than Victoria) on the National Energy Market seems fair. From 1 December 2017, whenever an electricity meter is newly installed or needs to be replaced, it will be with a smart meter.
In the meantime, while trust in energy retailers is low, why not consider involving an independent third party in your next transaction? Bulk Energy are here to help consumers find the best energy deals, and advocate for you in the event of a dispute with your retailer. Sadly, the Essential Research survey reference here didn’t score “trust in electricity brokers”. But if our case studies are anything to go by, we’d be top of the list!
You can contact us here.