It’s the kind of expense that creeps up quietly. One month the bill seems normal, the next it’s somehow higher — and many Australians don’t even realise they’re paying more than they should. A quick phone call could change that, but most people never make it.
Millions Paying More Than They Should
A new ACCC report has found that millions of Australian households are paying more for their electricity than necessary, simply because they haven’t switched or reviewed their plan in years. The finding reveals a deep problem in the energy market — one that punishes loyalty instead of rewarding it.
The Australian Competition and Consumer Commission says customers who stay on the same plan for too long often get charged rates that are far higher than those available to new sign-ups. These plans tend to roll over each year with quiet increases hidden in the fine print, a tactic critics have dubbed the “loyalty penalty.”
ACCC commissioner Anna Brakey said the best way for consumers to take control is to compare plans regularly and switch if needed. “The very best thing people can do to save money is to switch plans – either moving to a cheaper plan offered by their existing retailer or changing retailers,” she said to Brisbane Times.
Why Staying Put Costs So Much
The watchdog’s research shows that many households are paying rates above what’s known as the default market offer — a benchmark price set by the government. The reason? Most customers never opt in to that default plan or bother to check what else is available. Retailers, meanwhile, have built business models around customer inertia.
Attractive introductory rates are used to bring new customers in, but once the contract expires, prices quietly climb. For years, this cycle has gone largely unnoticed.
New Rules to Rein In the Energy Market
In response, state and federal energy ministers have agreed on a set of reforms that will come into force in July next year. The new rules will limit how often retailers can raise prices — no more than once a year — and will ban the practice of quietly increasing rates during fixed contracts. They’ll also outlaw loyalty penalties, ensuring customers who stay with their provider don’t end up paying more than the default offer.
Energy Minister Chris Bowen said the aim is to make the system fairer. “Australians deserve a fairer go when it comes to their energy bills,” he said, promising the reforms will make it harder for energy companies to exploit long-term customers.
A Shift Away from Short-Term Relief
The federal government, meanwhile, is ending its power bill subsidy scheme, which has cost billions of dollars since it began. Treasurer Jim Chalmers said it was time to move away from direct cash relief and instead focus on long-term structural reform. Future initiatives, such as the Solar Sharer program launching in 2026, will offer households three hours of free power each day to encourage smarter energy use.
Small Steps, Big Savings
For now, the ACCC’s advice is simple: check your plan. Australians could save hundreds each year just by switching or updating their deal. It might not sound like much, but in an economy where every dollar counts, those savings can make a real difference — especially when the power bill arrives and there’s one less surprise waiting in the envelope.
