Will new rules keep energy retailers in line?
FROM 1 July 2019, the Australian Competition and Consumer Commission (ACCC) is enforcing a new Code of Practice for electricity retailers, designed to save consumers money.
The creation of the new Code follows the ACCC’s monitoring of the electricity market, which revealed that prices increased during 2017-2018 despite a rise in advertised electricity discounts.
Under the Code, energy retailers must set prices in line with the Australian Energy Regulator’s (AER) Default Market Offer (DMO). The DMO is not a cap but rather a benchmark to compare prices in the market.
Energy retailers must calculate all discounts on the basis of the DMO. The DMO is a standard price that energy retailers must use when advertising energy deals. So if you are offered a 20 per cent discount from one service provider and a 30 per cent discount from another provider, both these discounts are off the DMO, ending dodgy discount offers.
What the introduction of the DMO also means is an end to consumers paying the so-called loyalty tax when retailers quietly repriced electricity plans to their most expensive option once an initial, cheaper contract ended.
Although these changes seem to indicate a hard stance is being taken, some commentators have said that the new Code of Practice will not impact on electricity retailers very much at all. Time will tell if this reform will reduce energy prices for Australians.
In the meantime there are ways you can find the best energy prices that suit you.
As was mentioned in the July VOICE, Energy Switch is an electricity comparison tool for NSW consumers. Energy Switch can be accessed online at: https://energyswitch.service.nsw.gov.au/ and can be used to compare the prices of other energy retailers in NSW.
There is also a similar energy comparison service called ‘Energy Made Easy’ that is available for Queensland, Victoria, NSW, Tasmania, the ACT and South Australia.
Energy Made Easy compares electricity deals and also provides tips as to how you can save on energy costs. It can be accessed online .
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