The Australian Energy Market Commission (AEMC) aims to inform, empower and protect energy consumers with two new draft determinations.
AEMC Chair, Anna Collyer, said the changes would create a fairer retail energy market for all households, with special consideration for those experiencing vulnerability or hardship.
“The proposed changes will help ensure that Australian households can have greater confidence in their energy plans and that those experiencing financial difficulty receive appropriate support,’’ she said.
The AEMC said the determinations align with its consumer strategic priorities to inform, empower, and protect consumers individually and as a collective.
Support for hardship customers
The first draft determination responds to a rule change request from energy ministers to increase support for people experiencing hardship.
The draft rule would ensure that hardship customers are no worse off if they do not take up a better offer from their retailer due to existing barriers they face, while also preventing them from incurring unnecessary debt.
The draft rule places a stronger onus on retailers to assist hardship customers with better offers while giving retailers flexibility in delivering these protections.
It also improves the reporting and transparency of hardship offers to assist the Australian Energy Regulator with monitoring and compliance.
Ms Collyer said customers experiencing hardship face unique barriers when engaging with the energy market, including lack of time, stress from ongoing financial pressure, or literacy and language barriers.
“Our draft rule acknowledges these challenges and shifts more responsibility to retailers to ensure these customers receive appropriate support.”
Improving consumer confidence
The second draft determination consolidates four rule change requests into one rule change process focused on improving confidence in retail energy plans.
The draft rule addresses systemic issues affecting consumers’ trust in the energy market.
The draft rule would:
- Protect customers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price when their energy plan’s benefits expire
- Remove unreasonably high penalties for not paying bills on time
- Restrict retailers from increasing prices in market retail contracts more than once every 12 months
- Prohibit fees and charges for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers
“These changes will provide greater certainty and transparency around what consumers will pay for their energy and when those prices can change,” Ms Collyer said.
“By limiting retail energy price increases to once per year, which for most customers would fall in July to align with regular industry updates, we’re ensuring Australian households can better predict their energy costs and avoid unexpected price rises throughout the year.”
The AEMC said it has carefully assessed the rule changes against its statutory objectives, leading it to make more preferable solutions in several areas. The commission also said its draft rules reflect an independent, evidence-based approach that balances consumer protections with market efficiency to deliver outcomes that best serve Australian energy consumers in the long term.
The consolidated rule changes respond to findings from the ACCC that customers who do not regularly engage in the retail energy market often pay higher prices, particularly those on legacy plans with large conditional discounts or expired benefit periods.
Applying an equity lens to energy rules
The AEMC has applied its updated decision-making guidance across all four rule change requests, explicitly considering equity and how contract terms, benefits and fees may disproportionately impact vulnerable consumers.
“Our equity guidance proposes that energy equity exists where all consumers can fairly access and benefit from the energy system,” Ms Collyer said.
“In practice, this means addressing structural barriers that prevent consumers from accessing benefits and ensuring our decisions don’t create or exacerbate vulnerability.
“For example, we found that unreasonable conditional discounts disproportionately affect vulnerable consumers who may struggle to meet payment conditions due to financial constraints. By requiring retailers to apply discounts regardless of whether conditions are met, we’re ensuring these customers aren’t unfairly penalised.”
The AEMC said the updated guidance reflects its evolved considerations in relation to equity and will make how the AEMC considers equity in its decision-making process more transparent.
The AEMC is seeking stakeholder feedback on both draft determinations by 8 May 2025.
If made, the new rules would take effect from 1 July 2026 – giving retailers just over 12 months to implement the changes.
