Victorian energy companies must automatically switch customers onto their best offer under new consumer protection laws.
Big energy companies are facing a crackdown that will put $258 back into Victorian households each year. The state government has announced changes to the Energy Retail Code of Practice, creating what are now the strongest consumer protections in the country.
Energy retailers will be required to automatically switch customers in payment difficulty onto their best offer. This applies to anyone who has carried debt on their energy bill for more than three months and owes over $1,000. The change will save 75,000 electricity and 60,000 gas customers a combined $27.8 million per year, though customers can opt out if they choose.
Energy companies hit with consumer crackdown
- Retailers must automatically switch eligible customers to best offers, saving $27.8 million per year
- Price limits introduced on plans over four years old
- Minimum debt before disconnection raised from $300 to $1,000
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Victorians on older contracts with energy companies often pay higher rates simply because they haven’t switched plans. A reasonable price limit will now be introduced on energy plans over four years old, targeting the loyalty penalty business model where customers sign up to cheap offers that become more expensive over time. Around five per cent of customers haven’t changed plans in more than five years and are missing out on potential energy bill savings of up to $730.
Protections against disconnection are also being strengthened. The minimum debt amount required before a retailer can attempt to disconnect a customer has been raised from $300 to $1,000.
Additional changes for energy companies include capping fees for things like paying bills at the post office or paying late, and banning direct debit-only offers. This means customers who don’t or can’t pay via direct debit can now access cheaper offers. For some low-income families, direct debit is difficult to manage when payments are taken straight from their account, which can lead to additional bank fees or overdrawn accounts if their balance is low.
Energy retailers will also be required to check their customers are eligible for an energy concession more often, so customers can access savings of up to $260 per year if their circumstances change and they become eligible.
Victorians with an eligible concession card can apply for the $100 Power Saving Bonus now for immediate energy bill relief. More than 141,000 applications have been received so far.
Minister for Energy and Resources Lily D’Ambrosio announced the changes for energy companies, which were introduced at her request and will be enforced by the independent Essential Services Commission. The reforms will take effect in stages from February 2026.
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