Limits on energy retailer discounting and pricing practices from July 1, 2020

• Introduction
• Simplicity versus flexibility
• Additional changes in Victoria

Introduction

Both the AEMC and the Victorian ESC have introduced new rules constraining pricing and discounting practices able to be undertaken by retailers from 1 July 2020.

These changes will form a further part of a complex web of new and existing prescriptions across the National Electricity Market, connected to offering the default market offer (DMO or VDO depending on the jurisdiction) and marketing and pricing by reference to those prices.

The common change relates to limiting the size of conditional discounts offered by retailers in new market retail contracts on the basis that consumers should be protected from paying a disproportionate fee if they fail to comply with payment conditions (especially paying their bill on time). However, the way that each rule maker has approached it differs meaningfully, as summarised below.