Energy giants will be forced to tell Victorian customers how much money they could save under other deals.
The Andrews government announced the changes on Sunday as its interim response to a review into the state’s electricity and gas markets.
Energy retailers would need to publish how much customers could save by switching deals on their household bills under the changes.
The report, released in August last year, found Victorians were paying an average of 21 per cent more than the cheapest price on offer.
The Essential Service Commission (ESC) will also monitor and report on the competitiveness of the market under the proposal.
“These changes will boost transparency and support hard working families and business,” Energy Minister Lily D’Ambrosio said in a statement on Sunday.
“We know Victorian families are struggling with increasing energy prices – that’s why we’re helping more Victorians switch to a better offer.”
The government accepted nine of the report’s 11 recommendations and said it would continue to analyse whether it should mandate a no-frills basic service offer and abolish standing offers.
(‘Standing offer’ contracts operate as an industry benchmark. Their price cannot change more than once every six months, and it is harder to disconnect a household on a standing offer if they do not pay on time. In contrast, market offers can change at any time – and are generally cheaper.)
The Australian Energy Council, which represents the industry, welcomed the government’s announcement.
“The nine accepted recommendations have many positive aspects, particularly around delivering clearer messaging to customers on deals available and supporting vulnerable customers,” general manager of corporate affairs Sarah McNamara said.
“The industry is committed to implementing measures which make it easier for consumers to engage with the retail market and find great deals. Much of this work is already underway.”
Ms McNamara said the two recommendations still under consideration could stifle competition.
“The remaining two recommendations were the most contentious and radical recommendations of the Thwaites Review which would, if introduced, kill competition and push out smaller retailers.”
Responding to its findings last year, Ms McNamara said increases in power prices was not because of deregulation, but “the result of sustained national policy uncertainty, government interferences and the resulting closure of old, large power stations”.
Gerard Brody, CEO of advocacy group Consumer Action, said the government was beginning to address the failure of retail competition.
“This is a very good start, but community still needs basic offer,” he wrote on Twitter.
The independent review encouraged re-regulating the market.
“The findings of the independent panel highlight that Victorian consumers are not gaining the benefits of a competitive market.”
It found power prices had grown 200 per cent since 2000.
In response, the state’s three largest energy retailers have been giving more than 280,000 customers rebates of up to $720.
The government’s final response is due to be released later this year.