Government Moves To Ban Misleading Energy Discounts


Today, in response to a request by the Turnbull Government, the Australian Energy Market Commission (AEMC) has introduced a new rule that will prevent retailers from offering discounts on an energy deal if the discount is based on higher rates than the retailer’s standard rates.

This decision follows a major electricity pricing report by the Australian Competition and Consumer Commission, which found many of the industry’s discounting processes were problematic and confusing. The Australian Energy Market Commission believes the new rules will stop energy retailers offering “pseudo-discount deals that leave consumers worse off”  – by levying fines of up to $20,000. 

The new rules stop retailers from discounting off-market retail contracts where the base rates – such as usage and daily charges – were well above similar standing offers, leaving consumers worse off than others without discounts. The rules won’t apply in Victoria however, as the state has a separate energy retail code from the rest of the National Electricity Market.

The rule change was flagged by the federal government in late December and will take effect from July 1.

The AEMC has also recommended strengthening the Australian Energy Regulator’s (AER) ability to enforce how retailers present their offers to consumers.

Big discounts on an energy offer can seem very attractive, but if the discount is only available because the price of energy is artificially inflated, the consumer can end up worse off.

The new rule will prevent retailers from attempting to confuse consumers, providing them with the confidence that a discount is exactly that — a discount.

These new rules and restrictions complement actions already in place to deliver more affordable energy for Australian households, including a rule change requiring energy retailers to notify their customers when their discounts are about to finish or change, a rule change proposal requiring retailers to provide their customers with advance notice of price changes, a rule change proposal to allow consumers to submit self-reads of their energy meters; and a rule change proposal to reduce the time it takes to install new meters.

Solar or no solar, this is great news for all of us still connected to the grid!

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