Power bills could be cut by up to $730 a year under proposed laws
Electricity and gas companies would be forced to give customers stuck on expensive contracts better deals under new rules which the Essential Services Commission says would save Victorians an average of $225 a year.
The state's water and power regulator has proposed new laws that would require power retailers to put households struggling to pay their bills onto their cheapest plan.
This would apply to any customer who has asked for help with their bills or with unpaid debts more than three months overdue or above $1000.
The commission estimates this would benefit 75,000 electricity and 60,000 gas customers almost immediately, saving them up to $16.8 million. In the most extreme cases, these people could save $730 a year on their bills.
But the rules would also kick in for households stuck on older, expensive contracts who have not shopped around for cheaper offers – a phenomenon the commission calls a 'loyalty tax' by which customers are punished for not moving.
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Victorians on contracts that are four years old would be automatically moved to more affordable plans.
The second reform is estimated to benefit between 27,000 and 53,000 customers, saving between $10.1 million and $12.2 million in total.
In the last financial year, more than 60 per cent of electricity and gas customers were not on their retailer's best offer, the commission calculated.
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