The Australian Electricity Market Commission (AEMC) has published new rules that require electricity retailers to give customers at least five days notice before increasing prices.
Currently, energy companies are not required to inform customers of price rises until their next bill, which can be up to three months after the price changes take effect, meaning customers could be charged at higher rates without realising until their next bill rolls around.
The new rules are designed to improve transparency and reduce the risk of ‘bill shock’. By giving households advance notice of price changes, consumers are able to shop around for a better deal before any changes take effect.
Fines and infringement notices may apply to electricity retailers that fail to comply with their new obligations.
Federal Energy Minister Angus Taylor said these new rules will help further reduce power bills.
“With this change, consumers will be able to switch providers before a price increase – not when they first see their bill, which can be months after their energy company has increased the price.”
According to Canstar Blue research, 45% of Aussie electricity customers don’t believe they receive a good deal on electricity, yet 77% of respondents have not compared providers in the past two years. It is hoped that the new rule changes will encourage customers to shop around and help customers make better-informed decisions.
“We know that there are large discounts available for consumers that make a switch on their retail electricity provider. I encourage all consumers to vote with their feet if they see power prices they don’t like.” Mr Taylor said.
#AusEnergy retailers must give electricity & gas customers at least 5 days notice before their energy prices change – which means more time to shop around for better deal: https://t.co/OPq73AlAij pic.twitter.com/pH5mMQvegz
— AEMC (@the_AEMC) September 27, 2018
The AEMC says that retailers must provide clear and concise notices for both increases and decreases in electricity prices. The notices must be sent using the consumer’s preferred form of communication and must include information on the date of the price change, as well as the energy tariffs and charges to apply both before and after the change. Consumers will also be notified that they can access historical usage and billing data in order to assess the impact of the changes on their bill.
Who do these new rules impact?
The changes are part of the National Energy Customer Framework (NECF) which applies to states on the National Energy Market. This means it only affects residential customers in NSW, SA, South-east Qld and the ACT. It does not apply to Vic, WA or the NT as these states have their own regulations. The changes also do not apply to customers on government regulated electricity prices in rural Qld, Tas and the ACT. Queensland electricity customers are already required to receive at least 10 days notice of price changes, which will continue to apply.
The rules will take effect from 1 February 2019.