Power failure: why Victorian households are not plugging into electricity competition

In January 2002 the competitive electricity market was opened to include Victorian and New South Wales domestic electricity customers. This research surveyed Victoria households to obtain an understanding of their initial experience of the new market (full retail competition). It was anticipated that corporate strategies to acquire attractive customers whilst shedding unattractive ones would be apparent. Of more immediate interest was the finding that households are pessimistic about the purported benefits of this market. The survey revealed extensive customer inertia and argues that customers’ attitudes underlay this inertia. While policy makers had reason to investigate customer attitudes before implementing full competition, they failed to do so, despite the need for active consumer participation to make the market work. The Victorian government faces the spectre of a costly market and policy failure that has its roots in elite policy making that overlooks the importance of popular support if competition policy is to succeed.