The Victorian Labor Government has unveiled a set of reforms aimed at tackling rising energy costs and holding large retailers to account.
Minister for Energy and Resources Lily D’Ambrosio said the changes to the Energy Retail Code of Practice would be the strongest in the country and could deliver up to $258 in savings each year for Victorian households.
“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,” Ms D’Ambrosio said.
The reforms will require retailers to automatically switch customers in payment difficulty to their best offer if they have carried more than $1,000 in debt for three months. The government estimates this will deliver $27.8 million in savings across 75,000 electricity and 60,000 gas accounts annually. Customers can still opt out of the change.
Victorians on older contracts are set to benefit from a new rule that caps prices on energy plans more than four years old. Around five per cent of customers have not switched plans in over five years, leaving some paying up to $730 more than they would on a current deal.
The government is also lifting the threshold before retailers can disconnect a customer from $300 to $1,000, in a move designed to give struggling households more breathing space. Other measures include capping late payment and post office fees, and banning direct debit-only deals so that families without reliable access to direct debit options are not shut out from cheaper plans.
“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,” Ms D’Ambrosio said.
Retailers will also be required to check more regularly if their customers qualify for energy concessions. Households that become eligible could save up to $260 each year.
More immediate relief is available through the Power Saving Bonus, with concession card holders able to apply for a $100 payment. More than 141,000 applications have already been made.
Member for Mulgrave Eden Foster said the measures reflected the government’s determination to ease pressure on families. “We are backing families who are doing it tough with better cost of living support and cheaper energy bills,” Ms Foster said.
The Essential Services Commission will oversee the reforms, which will be introduced from February 2026. Chairperson Gerard Brody said the changes would make switching easier and fairer 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.
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