Consumer advocates have slammed the Australian Energy Market commission after they recently rejected a proposal banning energy retailers from increasing energy prices at will. There are currently no price guarantees protecting customers who sign on to a fixed-term or benefit contract. Effectively customers are signing up for an agreed upon term but at a completely unregulated price.

The Australian Energy Market Commission rejected the proposal from the Consumer Action Law Centre for transparency and pricing standards across the energy sector. ‘Your telco can’t change your fees midway through a contract, so why should energy retailers be allowed to?’ they asked.

But the AEMC ruled that energy retailers need only disclose the possibility of price changes to customers as they entered a contract (and you can be sure this will be buried in the fine print).

“The AEMC has accepted the industry’s assertions that there’s too much risk for them in giving a fixed-price contract – even though some of them do, strangely enough” said Consumer action Law Council Chief executive Gerard Brody.

“It’s particularly a concern for people who have bought a contract based on marketing that advertises a 5 or 10 per cent discount, and then months later the base rate is pushed up, so the discount is meaningless.”

Consumer Action Law Center. Image: www.news.com.au

Consumer Action Law Center. Image: www.news.com.au

This decision makes shopping around for energy deals pointless, as any deal you get can be changed on a whim. Worse – retailers are now rewarded for offering ridiculous offers to entice customers to sign with them before quite legally price gouging them to their hearts’ content.

The AEMC say that research suggests consumers are more concerned about clearer information than about fixed prices for fixed contracts.  A spokeswoman for AEMC told the waiting media: “If people want a fixed price that never changes during the life of their energy contract, they can look for it in the market, If they want the cheapest prices or contracts with no exit fees, the can choose that too.

“People want a range of contracts to suit their needs with both fixed and variable options. Obligations on retailers to provide clearer information will empower consumers to make confident choices between competitive energy deals.”

But with today’s ruling energy retailers are more likely to build disincentives into fixed price contracts. They would do this by needlessly padding the price per unit in case of any price rise. Where’s the competition in that?

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