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The Federal Government has introduced new rules that will prevent energy retailers from penalising customers who fail to meet strict payment deadlines on gas and electricity bills when they sign up to discount offers after 1 July 2020. 

Minister for Energy and Emissions Reduction, Angus Taylor, submitted the rule change request to the Australian Energy Market Commission (AEMC) in February 2019, following the Australian Competition and Consumer Commission’s (ACCC) Retail Electricity Pricing Inquiry, which identified issues with the pay-on-time discounts offered by electricity retailers.

Mr Taylor said the final rule change determination by the AEMC ensures consumers will not be ripped off.

“We are protecting consumers from dodgy retailing practices, and making sure discount deals are fair and transparent,” Mr Taylor said.

“Our focus is lower electricity prices, making sure Australian consumers get the best possible deals on their energy and ensuring retailers put their customers first.”

The new rule change will better protect consumers by ensuring late payment fees and pay-on-time discount conditions are limited only to a retailer’s reasonable costs.

The new rules will apply to both gas and electricity retail contracts entered into after 1 July 2020.

The Federal Government urges consumers to continue to shop around for the best deals on gas and electricity, and to take note of the terms and conditions that come with special offers.

The government’s introduction of the Default Market Offer (DMO) incentivised retailers to reduce the level of their conditional discounts, meaning that consumers no longer face sneaky late payment fees of up to $1,000 depending on where they live.

But this practice is still having a significant impact on customers.   

Based on the ACCC’s most recent report on electricity prices, it is estimated that average residential customers who fail to meet the conditions to receive discounts could be penalised between up to $185 per year, and small businesses up to $845 per year.

The government has directed the ACCC to continue to monitor electricity and gas prices in Australia to ensure that consumers are benefiting from action to bring prices down.

This rule change builds on the Federal Government’s broader efforts to bring electricity prices down for Australian consumers.

Charlotte Pordage is Editor of Utility magazine, a position she has held since November 2018. She joined the team as an Associate Editor in October 2017, after sharpening her writing and editing skills across a range of print and digital publications. Charlotte graduated from Royal Holloway, University of London, in 2011 with joint honours in English and Latin. When she's not putting together Australia's only dedicated utility magazine, she can usually be found riding her horse or curled up with a good book.

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