Plans aired to help energy customers pay less

Changes to make energy contracts fairer could force Victorian retailers to fix prices for at least 12 months for customers signing up to new deals.

Electricity and gas retailers could be forced to fix prices for at least 12 months for customers signing up to new deals from July 2020.

Electricity and gas retailers could be forced to fix prices for at least 12 months for customers signing up to new deals from July 2020.

The proposed change being considered would stop Victorians being stung with sneaky cost increases soon after switching to an offer they thought would save them money.

The state’s energy regulator is also examining how to make energy companies advertise discounts in dollar terms, instead of percentages.

This would stamp out confusing tactics that make it hard for consumers to compare offers, and can leave them worse off.

The latest planned reforms follow an independent inquiry that found Victorians were paying “unusually high” power prices.

An Essential Services Commission issues paper, to be released on Wednesday for consultation, outlines potential ways to adopt the review’s recommendations to make contracts clearer and fairer.

The Andrews Government last year supported a swag of recommendations from the review.

ESC energy director Sarah McDowell said proposed changes aimed to ensure customers were aware of what they were getting with a new offer.

Victoria’s Essential Services Commission is examining ways to make energy contracts fairer.

“Prices going up shortly after signing a new energy deal is just one of the issues we will address,” Ms McDowell said.

She also noted: “One of the biggest challenges for customers is comparing energy offers when a large discount from one retailer and a small discount from another retailer can result in the same price”.

The paper canvasses options such as requiring retailers to fix market offer prices for at least the first 12 months after a customer signs up; or giving customers a fixed price choice with any retailer.

Other options being explored include rolling customers who don’t look for deals when contracts expire on to Victoria’s new regulated electricity default offer, or a best generally available offer.

And customers could only be hit with “reasonable” costs if they failed to meet discount conditions, such as paying on time.

MORE: MORRISON FLIES INTO POLITICAL STORM

ADULT VICE CAUSING KIDS’ INJURIES

Feedback on the issues paper will be taken until July 2. A draft decision on rule changes is due in September.

The latest bid to help customers deal with the energy market comes as other reforms take effect from next month. These include an electricity default deal; “best offer” declarations on energy bills; and GST-inclusive price references.

[e-mail]

@KarenCollierHS