Victoria now hottest energy retail market as customer switching increases


Auckland, New Zealand — (METERING.COM) — September 3, 2007 – The Australian state of Victoria has ranked as the hottest energy retail market in the world, with almost one in four Victorian utility customers switching suppliers during 2006, a new survey by First Data Utilities and VaasaETT has found.

Great Britain, long the pre-eminent energy market, is now ranked in second place, followed closely by South Australia. All three “hot” markets, with over 15 percent of customers switching per year, have separately-owned retail and distribution utilities, and support competition for both electricity and gas retail supply. This enables utilities in these markets to offer dual-fuel products and cross-sell both commodities to consumers who previously had to deal with separate electricity and gas suppliers.

Switching activity in Victoria has shown a consistently strong uptrend since full retail competition for electricity and gas was introduced in 2002, which continued into 2006. Factors contributing to this dramatic level of switching activity include strong competition from out-of-state incumbents and new entrant energy retailers contending for market share, the introduction of lifestyle products and affinity programs targeted at niche customer segments, and publicly accessible websites which allow customers to compare suppliers’ prices.

Despite losing the number one spot customer switching in Great Britain has also continued to increase, reaching its highest level in history. In the past year impetus has come from retail price reductions and increasing use of innovative price mechanisms. Great Britain has been at the forefront of utility customer switching for over seven years, proving that high levels of activity can be sustained in the long term.

The survey found the fourth most active market in the world to be Texas, maintaining its ranking from the previous year, despite an increase in switching activity by one-third. Consistently the most active North American energy retail market and the only one to separate incumbent utility retail operations from distribution, switching activity exhibits considerable seasonality increasing during the summer months.

Other “active” markets, with between 5 and 15 percent of customers switching per year, were Norway, New South Wales, New Zealand, Sweden, Finland, Netherlands and Flanders.

In the “slow” category, with switching levels between one and five percent, were New York and Germany – both of which also recorded increased customer switching activity during 2006. Denmark, formerly ranked as a slow market, dropped to the “dormant” category (less than one percent switching), following the merger of six leading Danish utilities and the effective stifling of retail competition.

The survey forms part of the Utility Customer Switching Research Project, which monitors customer switch rates and trends in over 30 competitive energy retail markets worldwide.