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Australians are being asked their opinion on a proposal to stop energy retailers increasing prices mid contract. Consumer advocates have been frustrated that current market rules allow retailers to increase prices at any time during a fixed term contract, meaning a family can sign a multi-year deal only to have the price increase before receiving the first bill.

The Australian Energy Market Commission (AEMC) is now holding a public consultation process before deliberating on whether it will make the proposed change to the National Energy Retail Rules. Australians can find out more about the proposal at www.fixit.org.au, and can have their say through the AEMC’s consultation program.

‘Australians think a contract actually stands for something – that both parties are making a binding commitment. But energy retailers play by their own rules. The price they advertise can be increased before you receive your first bill,’ said Gerard Brody of Consumer Action Law Centre, which made the rule change application in conjunction with Consumer Utilities Advocacy Centre.

Mr Brody said this is a common sense step towards fixing a broken and unfair energy market. ‘What other industry can increase prices mid contract? Our Australian Consumer Law which applies to other industries says unilateral changing of prices is likely unfair and illegal. Why should energy retailers get a free ride?

Consumer Action encourages Australians to support the rule change to:

Make shopping around worthwhile; in the face of high prices, consumers are urged to shop around for the best deal. But what’s the point of shopping around when the retailer can increase the price after they’ve signed you up to a long term contract?

End unfair sales tactics; a retailer can deliberately set prices below market level to attract customers, then increase its price once a consumer has signed a contract that they then have to pay penalty fees to get out of.

Give families certainty; utility costs are the leading cause of consumer anxiety among Australians.[1]  The proposed rule change would give families certainty and help them budget for their energy bills.

Stop energy retailers playing by their own rules; your phone company can’t increase the cost of your plan mid contract, and insurers can’t increase premiums mid contract. It’s time energy retailers played by the same rules as everyone else.

Mr Brody said the AEMC’s consultation process was a great chance for consumers to have a say on the energy market. ‘Many Australians watch their energy bills go up and up and feel powerless to do anything about it. This process will give them a voice.’

‘It’s time energy policy stopped being the domain of government, industry and advocacy groups. It’s time for those paying the bills to have their say. It’s time to Fix It!’

END

Media contact: Dan Simpson, 0413 299 567

Notes:
The rule change submission relates to residential energy market offers. A full copy of Consumer Action and CUAC’s rule change proposal is available here.

The rule change is not applicable to Western Australia or Northern Territory which have not adopted the National Energy Retail Law. Victoria and Queensland are also yet to adopt the National Energy Retail Law, however the Queensland Government has stated that it will transfer to the national regime during 2014. The Victorian Government is presently aligning its Energy Retail Code with the rules under the National Energy Retail Law.