Retailers will have to give electricity and gas customers advanced notice of price changes under a new final rule published by the Australian Energy Market Commission (AEMC).
Under the new rule, retailers must notify customers at least five business days before their energy prices change.
Currently, price change notifications are provided up to three months after the change has taken effect.
AEMC chief executive Anne Pearson said the changes will help customers take control of their energy bills before price changes happen.
“Advance notice gives people more time to take action – like shopping around for a better deal, or accessing their usage data to work out how they can best manage the change in price,” Mrs Pearson said.
The rule requires retailers to provide clear and concise price change notices, delivered at least five business days before price changes come into effect.
Notices must be sent by the customer’s preferred form of communication and include information on the energy tariffs and charges to apply both before and after the change.
“A notice period of at least five business days gives customers time to change their budgeting plans or electricity usage ahead of the next billing period if they want,” Mrs Pearson said.
“They can also contact their existing retailer and negotiate a new retail plan to start right away.
“Knowing a price change is coming soon can prompt customers to engage more confidently in the market, for example by contacting their retailer to secure the best offer available – or take their business elsewhere.”
The AEMC and AER are jointly recommending the COAG Energy Council approve a civil penalty provision to protect customers if retailers do not deliver the notices in time.
Failure to meet the new obligations would result in fines of up to $100,000 for each incident.
Retailers will be exempt from sending a notice in a limited number of scenarios such as when a customer has already received notice of the price change due to the end of a benefit period, or where prices vary as a result of a change to a government-funded rebate or concession scheme.
In a joint statement, Federal Energy Minister Angus Taylor and NSW Energy Minister Don Harwin said the new rule would reduce bill shock.
“This important rule change will reduce the financial shock of higher than expected bills and ensure customers have time to shop around for a better and fairer deal,” the ministers said.
“Currently, gas and electricity retailers are not obliged to inform customers of price changes until their next bill, which can be months after the price change has occurred and can result in customers paying much more than they expected or have budgeted for.”
The rule starts on February 1, 2019, to give retailers time to make changes to their systems.