New electricity rules seek to reduce power prices

Across south east Queensland, New South Wales and South Australia, new rules apply to electricity providers that the Australian Competition and Consumer Commission (ACCC) hopes will benefit energy consumers.

For manufacturers who have seen electricity prices eat into their cost margins, the new rules seek to standardise the prices that are offered by electricity retailers.

From July 1, electricity retailers must cap their standing offers in line with Australian Energy Regulator’s (AER) independently set default price. Clients on current standing orders will be moved onto the lower price.

In addition, prices and conditions on market offers by electricity retailers must be made in reference to the default price.

These new regulations mean that customers must only be paying the maximum allowable prices set by the AER.

While electricity retailers may charge consumers less than the standing offer set by the AER, the new rules will reduce the range of prices that energy retailers can charge those who may not be on a market offer, or if a customer’s market offer has expired and they may not be automatically on a new offer.

By requiring retailers to include the common reference price and disclose all conditions, the ACCC hopes that customers will have more confidence to shop around for the best offer.

“We know electricity is a big expense for many householders and we encourage all consumers regardless of what offer they are currently on to look around for a better deal, which will now be much easier to do,” said ACCC chair, Rod Sims.

“We will ensure that the standing offer prices come down for all customers on those offers, which includes many who cannot access market offers,” said Sims.

The ACCC will enforce the new rules, along with its powers under the Australian Consumer Law, against energy retailers who do not follow the rules or make false or misleading claims about power prices.