Energy Commission to crack down on pay on time penalties

Energy providers penalising customers for failing to pay on time by forcing them to forfeit promised discounts may soon get a rap over the knuckles from the Australian Energy Market Commission (AEMC).

The commission has announced it plans to crack down on unfair discounting practices by energy retailers. The announcement comes in response to a government proposal that energy companies need to put customers first in their pricing strategies.

Currently, some energy retailers offer big discounts to encourage consumers to sign up to a new energy plan but these discounts are only available if certain conditions are met, such as paying on time.

Angus Taylor, the Minister for Energy and Emissions Reduction has requested a change to guidelines that will limit the penalty fee a customer failing to pay on time will have to pay to no more than the retailer’s reasonable costs.

“This rule change builds on the work we’ve already done to help ensure a fair playing field for customers when negotiating their energy bill.,” said Minister Taylor.

“The current rules are for the most part impacting customers who are already doing it tough, experiencing financial hardship. Some of the most vulnerable customers have been missing out on discounts and forced to pay more on their energy bill, we want to see an end to this practice.”

The Australian Competition and Consumer Commission (ACCC) has found that many energy customers fail to pay on time and as a result, can suffer significant bill shock.

Those experiencing financial hardship, are most affected by these conditional discounting practices. Currently, 59 per cent of customers in this category aren’t able to meet these conditions and miss out on discounts.

The Government is seeking a change to the rules, through a request to the AEMC, to ensure penalties for not meeting the conditions of a discounted energy plan are fair.

The AEMC is inviting public submissions on the draft determination until 16 January 2020. Small businesses and individuals are encouraged to make a submission to the draft.

For more information on the Government’s framework on energy and emissions reduction visit energy.gov.au/energy-policy-blueprint-fair-deal-energy.