If competition is the answer, what is the problem?
Can switching electricity retailer save you money, or is it simply shuffling deck chairs on the Titanic?
Right before Christmas, on 18 December, the Australian Competition and Consumer Commission, better known at the ACCC, released a report as part of its Inquiry into the National Electricity Market.
The report is one of a long line beginning from 2018 when the then Treasurer, Scott Morrison, directed the ACCC to hold a public inquiry into the “prices, profits and margins in the supply of electricity in the national electricity market”. The inquiry was expected to finish in August 2025, but the current Treasurer, Jim Chalmers, decided to extend it.
The latest report makes for interesting reading because it points out that retail prices have increased considerably for most consumers in 2025 – “by 6% overall for residential customers that do not have a controlled load”.
Customers in New South Wales will be especially unhappy, with that state recording the biggest annual price increase of 8.8%.
But all things are not equal. The ACCC also found that prices also vary between plan types.
In no surprise to National Seniors Australia (NSA), the ACCC found that customers on demand tariffs (without controlled load) pay significantly higher prices than other customers.
A demand tariff is a tariff that charges a customer an additional charge across an entire billing period based on the highest electricity usage (demand) recorded on a single day during a specific peak period (such as the evening). If you have one evening where your usage was particularly high in a 30-minute period, you’ll pay a demand charge for every day of your bill, even if your usage was much less every other day!
Seniors and other households in NSW within the Ausgrid network (Sydney, Central Coast, Hunter Region and Newcastle) should be particularly wary if they have a new smart meter installed. They will be placed on a default demand tariff, which could result in significant bill shock.
NSA has, for some time, called for these tariffs to be banned – something the NSW Minister for Energy, Penny Sharpe, should be listening to.
The report also found that there has been a proliferation of energy plans across the National Energy Market. Across all regions, the number of plans available increased to 145,500 in 2025 – varying from about 7,200 (Jemena) to 26,700 (Ausgrid) in a single region!
The ACCC, in its summary, states that customers “face complexity from the number and variety of plans in the market and confusing plan naming practices”. Given the proliferation of plans this appears to be the understatement of 2025.
While it is admirable the ACCC has pointed out problems with demand tariffs and the proliferation of plans, its solutions appear to reinforce the status quo.
The answer, my friends, is not less but more.
True to its name the ACCC has lauded the entry of new retailers, lack of retailer exits, and decline in market concentration as positives because they increase competition. Part of the solution, it states, is to reduce barriers to switching.
Is this really the answer?
Sure. Some savvy customers are switching and may be getting a better deal but this “winners and losers” approach to a sector offering an essential service that is pretty much the same regardless of who sells it to you, is fraught when comparing between energy plans is nigh impossible.
One might argue that shopping around is an exercise in avoiding being stung rather than finding the best deal.
On the Energy Made Easy website, you can go on and compare offers, but they are riddled with conditional discounts and different tariff structures that are impossible to compare.
Even if you enter your National Metering Identifier (NMI) into the website, this doesn’t access your usage data held by the retailer to allow you to compare plans based on your past usage. You can only compare plans based on average usage data across all households, which may look nothing like your household’s specific circumstance.
This is problematic, for example, if you are trying to understand if you’d be better off with a time-of-use plan than a flat rate tariff (you would only do this if you consumed most of your energy away from the evening peak because you generally pay higher prices in peak times with time-of-use plans).
Some plans offer you a large discount if you switch but, in the fine print, they say you lose that discount after a certain time. So, while you might get a temporary saving, you had better be on your toes and be prepared to shop around again when it expires or you might end up worse off.
In reality, you’d be better off closing your eyes and throwing an axe at a dartboard than trying to compare energy plans on the Energy Made Easy website. But this is what the ACCC and the energy sector believes you should do to get a better deal.
The “retail competition” narrative is so ingrained that no one is questioning whether competition is in fact part of the problem.
What we need are less plans and stronger protections.
If you agree, join our essential services campaign and tick the box for energy. National Seniors is currently formulating a number of submissions to government on energy, and will keep you updated on developments via our campaign and the Connect e-newsletter.
