A new rule put forward by the Essential Services Commission aims to help Victorians access affordable energy by requiring energy retailers to move customers onto cheaper plans.
The commission estimates these rules would save customers an average of around $225 on electricity and $182 on their gas each year.
The proposed changes to the Energy Retail Code of Practice are designed to ensure customers experiencing financial hardship and those who have been on the same plan for over four years pay a fair price for their power.
Under the updates rules, retailers would be required to move customers that are:
- Receiving assistance under the Payment Difficulty Framework onto their cheapest plan
- In arrears for at least three months and with arrears above $1000 onto their cheapest plan
- On contracts more than four years old onto a reasonable price, considering their circumstances
The commission has proposed a range of other rule changes designed to help customers access affordable electricity plans and stay connected, including:
- Requiring retailers to make it easier for customers to move to their cheapest plan
- Prohibiting retailers from making a payment method like direct debit or a communication channel like e-billing a prerequisite for accessing a particular electricity plan
- Increasing the minimum debt a customer can be disconnected for from $300 to $500
The ESC said it has proposed the rule changes in response to a request from the Victorian Minister for Energy and Resources (alongside recommendations from the Energy and Climate Change Ministerial Council).
Feedback on the proposed changes to the Retail Code of Practice is welcome and can be submitted through Engage Victoria. The consultation period closes on 26 June 2025.
The ESC’s latest research report, Customers on older plans significantly better off on their retailer’s best offer, includes more analysis on the financial benefit of moving onto a retailer’s cheapest plan.
Essential Services Commission Chairperson and Commissioner, Gerard Brody, said that if an energy retailer is supporting someone in financial hardship, moving them onto the cheapest plan is a simple, considerate step they can take to help the customer.
“It’s contradictory to be helping someone in hardship while also charging them unnecessarily high rates,” Mr Brody said.
“We’re also proposing a new rule that aims to end the ‘loyalty tax’, which sees prices stay sharp for customers who compare deals but creep up for those who stay on the same plan. Energy retailers would be required to move customers that have been on the same plan for four years onto a more reasonable rate.
“We know there are barriers that stop people shopping around in the complex energy market, but we don’t want those barriers to result in Victorians paying unnecessarily or unreasonably high rates.
“The ESC promotes the long-term interests of Victorian consumers with respect to price of essential services, and that’s exactly what these proposed changes aim to do.”
