Energy retailers have agreed to make sure all customers are on the best deal possible.
Last week, Prime Minister called a meeting with the heads of Australia’s energy companies to address the issue of high electricity prices.
In a press conference held after today’s meeting, Prime Minister Malcolm Turnbull said Australian families would now be getting a better deal.
“We know that millions of Australian families are paying more than they need for their electricity,” he said.
“They are on plans that have run out, discounted plans that have run out and they are now on a standard offer and paying too much for their electricity.
“They have got people that are on the wrong plans.
“But the complexity of the various offers makes it very difficult for many families and businesses to understand what is the right deal for them.”
According to the Australian Energy Regulator (AER), Australian households could save $1000 a year by changing contracts or retailers.
Meanwhile, the Australian Energy Market Commission (AEMC) has revealed 50 per cent of households have not changed retailers or contracts in the past five years.
Mr Turnbull said retailers have agreed to write to their customers who have reached the end of a discounted plan and outline in “plain English” alternative offers that are available.
They are going to outline to the government and to the ACCC the steps they are taking as individual companies to help customers to better offers.
“They have committed to producing clear user-friendly fact sheets on terms, late payment penalties, early termination payments and to work with us and the Australian Energy Regulator on key components of this including comparator rates,” the PM said.
“Very importantly, they have supported us expediting a rule change – and this can be done within around six weeks – under the national electricity law which will require a clear disclosure at the end of a discount period or a benefit period of the dollar impact of not doing anything based on past consumption.”
The new law will require retailers to contact customers as they near the end of a discounted plan to let them know, and offer alternatives.
The companies are required to report back to the PM by August 18 with progress.
Australian Energy Council chief executive Matthew Warren said the industry was acutely aware of the impact of higher energy costs on consumers.
“Recent increases in energy costs are driven by a shortage of supply. This can only be fixed by solving the climate-energy policy impasse which has blocked new baseload generation investment for the past decade,” Mr Warren said.
“Rising energy bills make it all the more important to help consumers find the best deal for them.
“We will work with the federal government to improve the way we notify customers about the deals they are on and to help them find more competitive offers.”
Origin CEO Frank Calabria said he agreed energy needs to become clearer for customers, but noted Origin already notifies customers when their discount period comes to an end.
“We commit to continue doing this, and to making our communication even clearer in terms of what will happen if customers do nothing,” he said.
“Energy prices are a whole of industry issue including networks, generators and retailers.”
Mr Calabria said there isn’t a “magic wand to fix everything alone”, but retailers are on a path to provide cheaper power to customers.
“But let’s be clear, to deliver a genuine reduction in prices for Australians we must also find a way through on energy policy, including a clean energy target,” he said.
“This is necessary to unlock investment in much needed new supply to replace our ageing coal-fired power stations, and transition us to a cleaner, more modern energy system.”