The Essential Services Commission is changing Victoria's energy rules to make it easier for customers to switch to their retailer's cheapest plan.
Research from the commission indicates that around 360,000 Victorians are on older, more expensive versions of plans that have a cheaper alternative with the same name, with the average customer able to save up to $430 per year if they were to switch.
Retailers will often release new plans with cheaper rates to compete for new customers. This can confuse customers when they look at their retailer's cheapest plan, see it has the same name as theirs and assume they are getting the best deal, when in fact, they are on an older, more expensive version of the plan.
This issue was raised by the consumer organisation CHOICE in its designated complaint to the Australian Competition and Consumer Commission in May 2025.
In Victoria, energy retailers must include information about their best offers on:
- all communications about price changes
- customers' energy bills – every three months for electricity bills and every four months for gas bills.
Having products with the same name can undermine this rule. For some plans, less than 25 per cent of customers are on the newest, cheapest version. Of the ten most popular consumer energy plans, six have cheaper successors with the same name.
From 1 October 2026, new energy rules will require retailers to have processes that are effective in helping customers switch to a cheaper plan. A process will only be effective if it is both simple and accessible. In practice, this means that retailers should clearly distinguish between different plans so customers can easily see when a cheaper offer is available and switch with confidence.
This is part of a broader suite of upcoming changes to Victoria's energy rules, including other rules to help Victorians switch to their retailer's cheapest plan:
- From 1 July 2026, retailers must ensure that all customers on contracts older than four years are paying a reasonable price for their energy.
- From 1 October 2026, retailers must automatically switch customers experiencing payment difficult to their retailer's best plan.
Other changes are designed to ensure customers doing it tough get the best price and stay connected, and to tackle the energy market's 'loyalty tax'.
The commission will monitor how retailers meet their obligations to make switching to the best plan simpler and more accessible for consumers.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
"Same-name plans can be a significant barrier to switching to a retailer's cheapest plan. The recently announced changes should remove this barrier and help customers identify cheaper plans."
"Some customers have been missing out on hundreds of dollars of savings per year by not switching to a cheaper plan with the same name. In the current climate, we know people are looking for ways to reduce costs."
"We expect retailers to design systems and publish new offers that clearly identify different plans, making it easier for customers to switch."
Background
- Potential savings for customers who switch to their retailer's best offer increase the longer they have been on the same plan. This is because customers on older plans tend to pay higher prices than customers who have changed plans or retailer recently. This is also known as the 'loyalty tax'.
- Customers who have not changed plans for 10 years or more could save the most (up to $950 per year). Customers who have not changed plans for two years or more could achieve more modest savings (up to $410 per year).
- In May 2025, the consumer organisation CHOICE made a designated complaint to the Australian Competition and Consumer Commission (ACCC) raising concerns about consumer confusion from retailers' use of identical names for plans with different rates. The ACCC's response said the issue was best dealt with through the processes of both the Essential Services Commission (for Victoria) and the Australian Energy Regulator (for the states and territories it oversees).
- CHOICE also recently gave energy retailers a Shonky Award for pricing tactics designed to confuse consumers.
