The Australian Energy Market Commission (AEMC) has published a draft report proposing a comprehensive package of reforms to build a pricing framework that is smarter, fairer and delivers the lowest overall cost for all Australian electricity consumers.
The Pricing Review draft report outlines recommendations that could be implemented over an approximately 10-year period beginning in 2026, designed to ensure all consumers benefit from competition, have meaningful choice in products and services, and share system costs equitably as consumer energy resources (CER) adoption accelerates.
The context for reform
Harnessing competition for all consumers
The draft report recommends requiring energy service providers to charge all customers on the same plan the same price, addressing the loyalty tax so all customers continue to receive the best price over time.
Under current arrangements, customers who don't regularly shop around for a better deal could end up paying more than new customers for the same service, with some long-standing customers paying significantly more simply because they haven't switched.
The draft report also proposes a model where energy retailers would compete to serve customers who haven't actively chosen a plan, bringing them competitive prices without requiring them to shop around.
"We want to move beyond discount wars where customers need to constantly shop around.
We want retailers offering products that genuinely suit different customers, for example, a simple monthly subscription for people who want certainty or flexible plans for people who want to actively manage their energy use. We want to see real differentiation based on customer needs," Ms Collyer said.
Improving consumer ability to compare offers
Electricity products are becoming increasingly diverse with new offerings like virtual power plants, solar soak plans, and flexible pricing that responds to how and when energy is used, making it harder for consumers to compare their options and find the best deal.
The draft report recommends providing the Australian Energy Regulator with additional funding to upgrade the website Energy Made Easy so consumers can easily compare different electricity offers, including these new and emerging types.
"Consumers tell us they can't find the products they want, and when new products do emerge, it's very difficult to compare them. Whether you're interested in a virtual power plant or a simple subscription plan, you should be able to compare your options and find what suits you best," Ms Collyer said.
Targeting rewards and ensuring equitable cost-sharing
The draft report recommends amending the rules to focus network tariff design on efficiency, supporting a lowest-cost grid and a fairer way of sharing costs among consumers.
The draft report also recommends that network tariffs be designed for energy retailers to translate into diverse customer offerings, rather than being passed directly to consumers as complex charges.
"Where electricity once flowed in one direction, it now flows in two. Our reforms would ensure everyone who relies on the grid contributes fairly to maintaining it, while creating strong rewards for behaviours that genuinely help the system, for example, storing solar in batteries and using it during evening peaks.
“This also enables retailers to create the innovative products consumers want," Ms Collyer said.
Before finalising recommendations, the AEMC will conduct a detailed customer impact analysis using real customer data from network businesses.
This analysis will examine how different transition pathways affect different types of households to ensure any changes are implemented fairly and potential impacts are carefully managed.
Implementation and transition
Implementation commences in 2026, with full implementation extending to the mid-2030s.
"We envisage an approximately 10-year pathway. Stakeholders have emphasised that getting the transition pathway right is potentially the most significant element of the reform programme,” Ms Collyer said.
“A well-designed transition will help ensure benefits are realised while minimising disruption.”
The AEMC is seeking written submissions on the draft recommendations by 13 February 2026, will hold a public forum on 15 December 2025, and will publish a final report in early 2026.
Complementary reforms
The Pricing Review is one element of a coordinated reform program across the energy sector designed to support consumers and deliver value for CER owners through the energy transition.
The AEMC's pricing reforms complement other critical initiatives including the National CER Roadmap and Implementation Plan, reforms to the Default Market Offer and introduction of solar sharer arrangements, Better Energy Customer Experiences reforms, and the AEMC's upcoming network regulation review.
"Pricing is only part of the picture. These reforms must work together with other initiatives already underway to ensure consumers benefit from the energy transformation," Ms Collyer said.
Visit project page for more information and contact details.
Media: Jessica Rich, 0459 918 964, media@aemc.gov.au