New electricity rules will help make energy bills fairer

Fact Checked

New rules finalised today will help make energy bills fairer, by limiting fees, price hikes and unreasonable conditions. It comes as new Canstar Blue research shows an alarming 67% of Australians don’t fully understand their electricity bill.

The Australian Energy Market Commission (AEMC) governs the sale and supply of energy to customers in New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory.

The new rules require providers to:

1. Limit price hikes to no more than once a year.
2. Make sure customers who sign up to a plan with a temporary benefit do not roll over to one that is higher than the default price.
3. Ban unreasonably high penalties for not paying bills on time.
4. Restrict all fees to reflect the actual costs paid by providers.
5. Ban fees, except for network charges, for vulnerable customers.
6. Require providers to ensure hardship customers are financially no worse off than if they were on the providers’ lowest cost plan, deemed as a “better offer”.

The new rules come into effect from 1 July 2026, with the exception of the last rule relating to helping hardship customers move to cheaper plans, which will come into effect on 30 December 2026.

The AEMC has also today announced a draft determination to help customers better understand when they aren’t on their provider’s most competitively priced plan, with a recommendation to move this information into the body of the email, instead in the attached bill, after research quoted by the AEMC found that up to 40% of customers don’t always open their bills.

The draft determination is now out for further consultation, with a view to finalising this rule change in September this year.

Canstar Blue survey shows just 33% of customers are confident reading their energy bills

A Canstar Blue survey of 2,833 electricity customers found that just 1 in 3 fully understood their electricity bill, with a breakdown as follows:

• 33% said they understand all of their bill,
• 41% said they understand some of their bill,
• 19% said they don’t understand much of their bill; and
• 7% said they did not understand their bill at all.

How many energy customers are in hardship?

The latest Australian Energy Regulator (AER) quarterly retail performance data, for the quarter ending December 2024, revealed there are 111,104 customers reported by retailers in hardship.

Average hardship debt (Dec qtr 2024): $1,947

Rise from previous quarter: 6% ($114)

Rise from previous year: 16% ($262)

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Why energy rule changes are a step in the right direction

Canstar Blue’s data insights director, Sally Tindall, says, “These rule changes are a step in the right direction, however, more needs to be done to lift the clouds of confusion that hang over our electricity bills.”

“Our research shows just 33 per cent of Australians are confident they’re reading and understanding their bills correctly, while AEMC research shows up to 40 per cent of people don’t even read all of their electricity bills.

“In January 2023, the Australian Energy Regulator introduced new rules to help customers better understand their energy bills, yet almost two and a half years on, many customers are still largely in the dark.

“The AEMC is right to look at improving ways to tell customers when they’re on an uncompetitive deal, however, moving the box that says ‘could you save money on another plan’ from the first page of the bill to a summary page is unlikely to be a game changer.

“The new rule to limit price hikes to just once a year is a fantastic measure that will give Australians greater confidence when comparing their options.

“It means that Australians will be more likely to be comparing apples with apples when they do their research, particularly if the majority of retailers opt to implement any price hikes in July in line with the reference price changes.

“Right now, Australians looking for a competitive deal on their electricity plan really need to be checking on their rates at least once every six months. Limiting the number of price hikes to just one a year could reduce the need to check on your bill, freeing up time to focus on other expenses.

“Limiting price hikes will also help prevent bill shock. An unexpected electricity bill can be enough to throw a person’s finances off course for months. With the government’s electricity rebate coming to an end this year, the new price hike rule can’t come fast enough.”