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Move to end variable fixed-term energy contracts good for consumers Analysis

Move to end variable fixed-term energy contracts good for consumers

Moves by the Victorian Government to stop energy retailers from being able to vary prices midway through fixed-term contracts or charge termination fees if people leave their contracts after a price rise, are a win for consumers, says the Victorian Council of Social Service.

“A fixed term contract should have a fixed price that shouldn’t be able to be varied at the energy retailers’ discretion,” said Emma King, CEO of VCOSS.

“Too many Victorians are being lured into low-cost energy contracts only to find the price can be varied by the retailer with no advance notice and no recourse to consumers, who often face high termination fees if they break the contract.”

“Under current regulations retailers can increase energy prices at any time, even if a customer has signed up to a ‘fixed-term’ contract.”

“Consumers are often caught unaware and can face significant bill shock if they have budgeted to spend based on the lower price figure they thought they were singing up to.”

“Victoria’s energy market is built upon the principle that consumers can choose the best deal they can find to suit their energy use needs but the current rules make a mockery of that choice.”

“Consumer advocates have long called for prices to remain fixed for the life of the fixed term contracts and for termination fees on contracts with variable pricing to be banned.”

“Today’s announcement by Minister for Energy and Resources Lily D’Ambrosio is a welcome step towards keeping energy retailers accountable for the provision of essential electricity and gas services.”