Victorian households could save hundreds of dollars a year on their power bills under sweeping new reforms announced on Tuesday.
Energy retailers will be forced to tell their customers if they have a cheaper deal that suits them better from July 1 next year.
The changes come after an independent review of the state’s electricity and gas markets, commissioned by the Essential Services Commission.
Commission chairperson Ron Ben-David said the “once-in-a-decade reform” could save Victorian homes “maybe hundreds of dollars”.
How it works
Energy providers will need to inform customers of a better plan on their bill, using the words: “Could you save money on another plan? Based on your past usage, our [plan name] may cost you up to $X less per year than your current plan.”
The bill would need to provide estimated savings.
The best offer is calculated using the customer’s previous year of metering data, or the retailer’s best estimate if that’s not available.
If the customer is on the best deal, the bill will confirm this.
The advice needs to be given at least quarterly for electricity bills and at least every four months for gas bills.
The bill must also refer the customer to the Victorian government’s price comparison website, and of any exit fees under their contract.
Premier Daniel Andrews has previously estimated that Victorian homes can save up to $330 in the first year by finding the best deal.
Seven in 10 homes can find a better deal, the government said in July announcing its $50 rebates for residents that use its energy comparison website.
The offer is still available until December 31.
Most major retailers do not charge an exit fee from their customers, while Powershop covers exit fees for new customers up to $75 if charged by their old provider.
The New Daily confirmed Origin, AGL, Alinta, Amaysim, Powershop and Blue NRG charge no exit fees for residential customers. 1st Energy price match better deals, or release customers with no exit fees if they cannot match the competitor’s price.
Under the new rules, retailers will also need to tell customers at least five days before price changes come into effect along with a best offer message with better deals.
All prices will need to include GST to make it easier to compare between retailers, and the advice would include the implications of all terms and conditions.
The new obligations apply to residential and small businesses, electricity and gas bills, but not multi-site customers.
“Our reforms are about making retailers responsible,” Dr Ben-Davis, chairperson of the commission, said on Tuesday.
“When people can’t work out how to compare offers; when someone on a 30 per cent discount is paying the same as someone else on a 5 per cent discount; or if you only get a better deal if you threaten to leave your retailer – it’s pretty obvious we aren’t being well served by the energy companies.”
Average annual residential bills in Victoria were the cheapest of all the states in 2017-18, according to a report released in July by the Australian Competition and Consumer Commission.
Average residential electricity bills in Victoria were $1457 for the year, compared with $1697 in New South Wales and $1703 in south-east Queensland. Average bills were $1727 in South Australia or $1979 in Tasmania.