The Victorian government is tightening the rules on major energy companies in a move to strengthen consumer protections and help Victorian families save on their power bills.
Minister for Energy and Resources Lily D’Ambrosio today announced sweeping changes to the Energy Retail Code of Practice, describing them as the strongest consumer protection measures in the country — expected to return $258 a year to Victorian households.
Under the new reforms, energy retailers will be required to automatically place customers experiencing payment difficulty — those with more than three months of arrears and debts exceeding $1,000 — onto their best available offer.
The change is set to benefit 75,000 electricity and 60,000 gas customers, collectively saving $27.8 million a year. Customers will still have the option to opt out.
Victorians on outdated energy plans often pay higher rates for not switching.
To tackle this, the government will also cap prices on contracts older than four years to combat the so-called “loyalty penalty”, where longstanding customers end up paying more for the same service.
Around 5 per cent of customers have remained on the same plan for over five years, missing potential savings of up to $730 annually.
Additional protections will make it harder for retailers to disconnect customers, with the minimum debt threshold rising from $300 to $1,000 before disconnection can occur.
Retailers will also face new limits on fees for payments made at the post office or after due dates, and direct debit-only offers will be banned to ensure equitable access to lower-cost deals.
“For some low-income families, direct debit is hard to manage when payments are taken straight from their account, which can lead to additional bank fees or overdrawn accounts if their balance is low, adding financial stress,” the government said in a statement.
Energy companies will also need to check more regularly that customers are eligible for concessions, enabling households to access up to $260 in yearly savings if their circumstances change.
Meanwhile, eligible concession cardholders can apply for the current $100 Power Saving Bonus, with more than 141,000 applications already submitted.
The Essential Services Commission (ESC) will enforce the new rules in stages starting in February 2026, following a direction from the Minister.
“We’re putting an end to business tactics that have been ripping Victorians off – because we’re on your side, not the side of big energy companies,” Minister D’Ambrosio said.
“We’re giving the ESC more powers to force retailers to offer lower bills to vulnerable households, putting money back in their pockets.”
Member for Mulgrave Eden Foster said the reforms reflect the government’s focus on cost-of-living relief.
“We are backing families who are doing it tough with better cost-of-living support and cheaper energy bills,” she said.
Essential Services Commission Chairperson and Commissioner Gerard Brody said the changes would ensure tangible savings for households.
“For customers facing significant debt or payment difficulties, retailers will now be required to take the basic step of moving them onto the cheapest plan.
“For others, the process of switching to the best offer must be simple and effective.
“The savings are substantial and can make a real difference to people struggling with the cost of living,” he said.
