AEMC delivers enhanced consumer protections to help customers find better energy deals

The Australian Energy Market Commission (AEMC) announced major new reforms on June 19, 2025. These reforms will deliver stronger protections for energy consumers and help more households access better energy deals. This rule change package responds to findings from the ACCC, which indicate that customers who do not regularly engage in the retail energy market often pay higher prices, especially those on legacy plans with large conditional discounts or expired benefit periods.

ACCC's June 2024 report, the eleventh in its inquiry into the prices, profits, and margins of electricity supply in the National Electricity Market (NEM), examines electricity bills, usage, and effective prices for residential and small business customers in 2023. This report was based on a collection of 15 million electricity bills from Victoria, New South Wales, South Australia, and Southeast Queensland. For the first time, the inquiry also collected an additional three million electricity bills from authorised retailers serving customers in embedded networks. Embedded networks are private electricity networks connected to a local distributor’s network and are used to supply multiple customers at a single site. Some common examples of embedded networks include caravan parks, apartment buildings, retirement villages and shopping centres.

Background

The rule change request forms part of the broader Energy and Climate Change Ministerial Council (ECMC) consumer rule change package submitted in August 2024. The package involves seven rule change requests that together seek to help households access cheaper energy deals, increase support for people experiencing hardship and deliver more protections for consumers.

The package of consumer-related rule changes includes: 

• Ensuring energy plan benefits last the length of the contract
• Preventing price increases for a fixed period under market retail contracts
• Removing fees and charges
• Removing unreasonable conditional discounts
• Assisting hardship customers
• Improving the ability to switch to a better offer
• Improving the application of concessions to bills

The ECMC proposed to amend the National Energy Retail Rules (NERR) to require retailers to provide hardship customers with a credit on their billing no explicit informed consent was obtained and there is a deemed better offer for that customer, as referred in the Australian Energy Regulator’s (AER’s) Better Bills Guideline. They may also indicate future regulatory directions,particularly concerning pricing transparency and certainty. Even if not directly governed by the NERR, market pressure and consumer expectations often push embedded networks toward similar standards.

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Final Determinations

1. Improving consumer confidence in retail energy plans

The new rules on improving consumer confidence in retail energy plans will take effect on 1 July 2026, giving retailers just over 12 months to implement them.

The first four consumer-related rule changes are consolidated into a single rule change called Improving consumer confidence in retail energy plans. ‍

• The rule seeks to address the ‘loyalty penalty’, which refers to price discrepancies where long-standing customers on older offers that increase over time, pay more than those on new offers designed to attract new customers. Embedded network operators and owners should be mindful of similar practices within their networks, as this issue is a key driver for consumer protection reforms.‍
• The final rule prevents retailers from charging new and existing customers more than the standing offer price after their energy plan’s benefits change or expire. This provision does not include exemptions for specific plans or benefits.
  
  • For embedded network operators and owners who provide offers with time-limited benefits or discounts, this rule establishes a clear benchmark. Operators in this position should review their existing customer agreements to identify any practices that could lead to consumer detriment, especially vulnerable ones, post-benefit, and consider aligning their practices with these new requirements.
  • A Tier 2 civil penalty is planned for retailers who charge small customers an energy rate higher than the standing offer price when contract benefits expire or change.

• Bills Certainty and Price Stability
  
  • Proposed within the final rule are changes that will improve certainty for customers by restricting price rises, allowing retailers to increase prices once every 12 months. However, it does not restrict network tariff reassignments and associated price changes (noting the existing restrictions on tariff reassignment relating to the roll out of smart meters will remain).
  • Consequently, retailers are prohibited from charging any fees (excluding network charges) to hardship customers, non-hardship customers experiencing payment difficulty, and customers experiencing family violence. These customers will primarily pay only the energy rates associated with their retail offer.

2. Assisting hardship customers

The new rules on assisting hardship customers will come into effect from 30 December 2026. Key impacts are:

• Retailer Obligations: Retailers must ensure hardship customers are financially no worse off than the deemed better offer by either obtaining Explicit Informed Consent (EIC) to move them to the deemed better offer, or by providing a financial benefit (such as a downward price adjustment, enduring discount, or credit) under their current plan.
• Transparency and Reporting:The rule will improve reporting and transparency on the types of offers hardship customers are on. The AER will be required to define a 'deemed better offer', aligning with the Better Bills Guideline, considering factors like the lowest-priced plan, a customer's energy usage history, and whether non-financial benefits are included.
• Reduced Burden:The rule aims to reduce the onus and burden for hardship customers to move to abetter offer. It also shifts the risk and direct financial consequences of hardship customers not being on the best offer towards retailers.

The figure below gives an overview of the three components of the final rule.

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Draft Determination

Improving the ability to switch to a better offer

The draft rule, as part of a consumer-focused package from the ECMC, aims to enhance customers' awareness of potential savings when switching energy plans.

This rule will require energy retailers to include a"better offer message" in communications sent alongside customers 'bills, such as in cover emails or letters. This message will highlight opportunities for savings by switching plans or by visiting the Energy Made Easy website, a free and independent Australian Government energy price comparison service.

The ESC in Victoria has published a Regulatory Impact Statement (RIS) that assesses potential amendments to the Energy Retail Code of Practice, one of which also seeks to improve the ability for customers to switch to the best offer

The Australian Energy Regulator (AER) is also required to update its Better Bills Guideline by September 30, 2026

The AEMC anticipates minimal implementation costs for retailers, as they already generate the "deemed better offer"message for inclusion on bills. Notably, the draft rule does not compel retailers to automatically switch customers or to streamline switching processes; it upholds the existing Explicit Informed Consent (EIC) framework and acknowledges that the time and effort involved in switching are not the primary barriers. Extending the provision of comparative information to other communication documents, the draft rule increases regulatory alignment with Victoria's "Best Offer Guideline," aiming to reduce the regulatory burden for retailers operating across multiple jurisdictions.

This initiative is expected to boost customer engagement in the retail energy market, leading to increased use of the Energy Made Easy website and fostering greater competition among retailers, which could place downward pressure on prices.

The draft rule promotes the National Energy Retail Objective and fair outcomes for consumers by maintaining a consistent focus on diverse customer needs and experiences, eliminating structural barriers to retail market participation, and inhibiting the creation or worsening of vulnerability.

If you are an owner or operator looking for an in-depth discussion on the rule changes, and its impacts – give our expert team a call.

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References

AEMC Website

ACCC Inquiry into the National Electricity Market report - June 2024