A new rule made by the Australian Energy Market Commission (AEMC) to help energy consumers save money starts this month.
The rule was made in response to a request from Federal Energy Minister Josh Frydenberg following the Australian Government’s roundtable discussions with energy retailers last August.
The AEMC is making energy retailers notify electricity and gas customers when benefits in their contract, such as a discount, are about to end or change.
Notices will encourage customers to shop around and look for a better energy deal.
“Households and small businesses often sign up to electricity and gas deals with rewards like price discounts or movie tickets,” the AEMC said in a statement.
“Customers may not be aware when these benefits end or change, and could be left financially worse off as a result.
“From today, retailers must let customers know when benefits they have signed up to are about to end.”
These notices have to include the date on which the customer’s benefits will change and a reference to the energy comparison website www.energymadeeasy.gov.au, which provides information on a range of alternative deals for energy shoppers.
By October 2018, retailers will be required to provide even more detailed information, including how much a customer will pay if they stay on the same deal after the change.
This means customers will know when their benefit is changing, and be able to readily compare their existing deal with other deals and choose a better one if they want to.
The new rule is expected to reduce the number of customers remaining on contracts with expired or reduced benefits, or rolling onto “standing offers” which tend to be higher priced.
It will also increase consumer engagement and improve retail competition.
This rule was made in response to a rule change request from the Honourable Josh Frydenberg MP, Minister for the Environment and Energy on behalf of the Australian Government.
The rule change request was submitted following the Australian Government’s round table discussions with energy retailers in August 2017, and reflects recommendations made in the AEMC’s 2017 retail energy competition review.
The AEMC expedited this rule in recognition of its importance.
“We also extended the rule’s coverage so that it also applies to gas retailers and to all benefits, not just financial benefits,” the AEMC said.
“While the first notices will be issued from February 1, the AER will develop guidelines on how retailers should calculate and present more detailed information, including what customers might pay if they remain on their current contract.”
The guidelines are to be published by July 1 and retailers’ notices must comply with the guidelines by October 1.