The Australian Energy Market Commission (AEMC) has introduced new rules to protect consumers from unexpected and complex electricity pricing, responding to widespread complaints about 'surge' tariffs imposed on households with smart meters.
Customer switching restricted
Retailers will now be banned from automatically switching customers to these dynamic pricing plans for two years after a smart meter is installed unless they have obtained explicit, informed consent.
The decision, announced today, aims to address concerns about the rollout of smart meters, which has seen households subjected to time-of-use tariffs and demand charges without adequate warning.
These charges often result in higher bills for consumers during peak electricity usage, with pricing determined by their highest 30-minute consumption period in a month.
Flat-rate tariff option
Under the new rules, retailers must provide a flat-rate tariff option for customers who prefer to avoid dynamic pricing or would be disadvantaged by it.
Additionally, they must show consumers historical billing comparisons to help them understand how new tariffs would impact their costs.
States and territories will need to implement supporting regulations to enforce the changes.
The AEMC’s measures come as the rollout of smart meters accelerates, with all Australian homes required to have one by 2030.
While the meters are expected to deliver benefits, such as eliminating estimated bills and enabling more efficient use of clean technologies like solar panels and batteries, consumer advocates have raised concerns about how the transition has been managed.
Ambiguities exploited
The commission acknowledged that retailers had exploited ambiguities in existing rules to impose new tariffs without adequate notice.
The updated framework is being put in place to close these loopholes and ensure a smoother transition to smarter energy systems while safeguarding consumers from sudden price shocks.