The ACCC has released a new Electricity Retail Code which energy retailers in South East Queensland, New South Wales and South Australia will need to comply with after July 1.
The ACCC guide details how retailers in these regions should apply the new code in relation to their customers, including how to advertise electricity plans in a way that makes it easier for consumers to compare prices and offers.
The Code introduces a cap on “standing offer” prices that are often excessively high, to automatically bring down the cost of electricity to customers on these offers, many of whom cannot or do not access alternative market offers. The cap will be set annually by the Australian Energy Regulator (AER).
The Code also mandates that any prices and discounts must be calculated and advertised against an independently set benchmark known as the “reference price”, meaning 20 per cent off with one retailer is also 20 per cent off the same price as another retailer in the same region.
It also bans conditional headline discounting, meaning that conditional discounts must not be the most conspicuous price advertised, and requires all conditions to be clearly stated.
ACCC Commissioner Cristina Cifuentes said, “These new rules, based on recommendations by the ACCC, increase transparency in advertising of electricity offers, and put consumers in a stronger position by enabling them to trust retailers’ advertised discounts and find a better deal.
“Current discounting practices confuse consumers and large discounts off inflated standing offers do not always result in lower electricity prices for consumers.”
The ACCC’s March 2019 report found prices and bills have been increasing, despite a steady rise in advertised discounts.
“I urge consumers to review their electricity deals after 1 July, and to shop around for the best deal,” Ms Cifuentes said.
The ACCC guide explains:
- Which retail electricity offers are covered by the code
- How the cap on standing offer prices works
- How price and discounts must be compared to the benchmark (or ‘reference price’)
- Other regulatory requirements that operate concurrently with the code
- The consequences of non-compliance with the code
- How the ACCC will enforce the code and monitor compliance
As part of its ongoing monitoring of electricity prices, the ACCC will report on the effects of the code on the retail market and whether consumers are generally receiving a better deal.