What we’re after
Current laws allow energy retailers to increase the price they charge you for electricity at any time during a contract. We think that’s unfair. If a customer is signed up for a fixed term contract, the price should remain the same for the full contract term.
For this to happen we need the Australian Energy Market Commission to change the National Energy Retail Law to prevent retailers varying prices whenever they like. So Consumer Action Law Centre and Consumer Utilities Advocacy Centre (CUAC) have formally requested that the Australian Energy Market Commission change the rules to make the energy market fairer for Australian households.
Why it’s needed
Australian energy markets are increasingly relying on competition to keep prices down – the idea is that consumers will give their business to the company with the best deals, and the competition will have to offer similar value or lose customers.
For competition to work you need consumers to participate in the market, and to make an informed decision about what’s best for them. At the moment this simply isn’t happening.
That’s because energy retailers can increase the price they charge you for electricity at any time during a contract, so advertised prices can be misleading and shopping around is often a waste of time. You can do all the hard work to find a deal that suits your needs, only to have the price increased after you’ve committed to a multiyear contract.
This weakens competition and means energy retailer can get away with charging more than they otherwise would, because consumers feel disempowered, and have little incentive to participate in the market
Prices need to be fixed for the length of a contract so that Australians can shop around with confidence, so they can easily compare products, and so they have certainty about what they’ll be paying for their electricity from one bill to the next.
The path from here
The Australian Energy Market Commission has completed a public consultation process on the proposed rule change – submissions can be read here.
The AEMC will now undertake further consultation before publishing a draft rule determination in August 2014 and a final determination late in the year.