Rule Change: Open
Overview
The Australian Energy Market Commission (AEMC) released a consultation paper on 6 February 2025 that seeks stakeholder feedback on Improving the ability to switch to a better offer. This rule change request seeks to reduce the transaction costs associated with switching offers by requiring retailers to provide a streamlined process for consumers to switch to the deemed better offer, as presented on the customer’s bill.
This rule change request seeks to reduce the transaction costs associated with switching
The proponent considers that the transaction costs that customers face when switching to another offer with their retailer are inefficient and represent a market failure. Transaction costs here refer to the time and effort associated with switching offers. These include time spent phoning a retailer, navigating a retailer’s website, or comparing detailed plans.
In reducing these costs faced by consumers, the rule change request also seeks to remove barriers to switching, encourage engagement with the market, and increase switching rates more generally.
We are seeking stakeholder feedback on:
- the extent and magnitude of the issues identified in the rule change request
- the potential benefits of providing a streamlined switching process
- the potential costs associated with this requirement on retailers
- implementation considerations, including whether a more prescriptive or ‘principles-based’ approach is appropriate.
This rule change is part of a broader package
We have initiated this rule change with a consultation paper concurrently with the Improving the application of concessions to bills rule change below. These are the final two rule change requests in a package of consumer-focused requests submitted by the Hon. Chris Bowen MP, Minister for Climate Change and Energy (the proponent) on 12 August 2024. This package includes:
- Ensuring energy plan benefits last the length of the contract
- Preventing price increases for a fixed period under market retail contracts
- Improving the ability to switch to a better offer
- Assisting hardship customers
- Removing fees and charges
- Improving the application of concessions to bills
- Removing unreasonable conditional discounts
On 15 May 2025, the Commission extended the period of time for making the draft determination to 19 June under section 266 of the NERL.