AEMC proposed rule change on fixed charges not in consumers’ interests

Renew has made a submission to the Australian Energy Market Commission’s review of electricity pricing, supporting efforts to make energy bills fairer, simpler and more predictable for households. The submission backs proposals to end the “loyalty tax” on disengaged customers and to use competitive processes to reduce bills for people who have never switched plans. However, it raises strong concerns about proposals to shift network costs toward predominantly fixed charges, arguing this would undermine affordability, consumer choice and the clean energy transition.

The submission warns that higher fixed charges would reduce incentives for households to invest in solar, batteries and energy efficiency upgrades, while increasing costs for low-consumption and lower-income households. This would weaken investment in distributed energy, slow the uptake of clean technologies and leave more Australians living in inefficient, unhealthy homes. Any pricing reforms must account for the system-wide benefits of household energy resources, including reduced demand for new generation, transmission and storage.

Our submission also cautions against complex demand and locational tariffs for households, which could lead to confusion and unexpected bills. Instead, the we recommend keeping pricing structures that preserve bill control and incentives for flexibility, while using smarter tools such as dynamic export limits, smart technologies and virtual power plants to manage network constraints.

Overall, the Commission is urged to prioritise equity, consumer agency and clean energy investment as Australia’s energy system continues to evolve.