What the ACCC Found on Electricity Loyalty Penalties, and How to Check Yours

The Australian Competition and Consumer Commission monitors the retail electricity market and publishes detailed findings annually. Their conclusions, reported consistently across multiple monitoring cycles, form the most authoritative public record of what loyalty penalties cost Australian households.

Here's the summary of their findings, and then a guide to running the check on your own bill.

What the ACCC Found

The ACCC's retail electricity market monitoring began with the Retail Electricity Pricing Inquiry in 2018 and has continued through annual monitoring reports. The findings have been consistent.

On the loyalty penalty: The $221 figure is about how old your plan is, not about whether you are on a default offer. The ACCC found that customers on plans more than three years old pay on average $221 more per year, 10.5% more, than customers on new plans. The gap varies by region: $303 in New South Wales, $408 in South Australia, $269 in Victoria and $213 in south-east Queensland. Source: Inquiry into the National Electricity Market, December 2025 report, ACCC, pages 5 and 32 (section 3.3.2).

ACCC Commissioner Anna Brakey put it this way: "Loyalty penalties are alive and well in the retail electricity market, so the very best thing people can do to save money is to switch plans, either moving to a cheaper plan offered by their existing retailer or changing retailers." Source: ACCC media release, 22 December 2025.

On the scale of the problem: The same report found 36.5% of residential customers on market offers, nearly 2.5 million, are paying prices at or above the default offers, and roughly 434,000 of them are paying more than 10% above. The ACCC's own media release rounds the first figure to 37%.

On how the penalty operates: The ACCC identified the mechanism clearly. Retailers compete aggressively for new customers with market offers priced below the default offer. Existing customers who don't actively shop around are progressively moved to less competitive pricing as introductory discounts expire, plan terms change, or they simply remain on a standing offer that hasn't been reviewed.

On what "loyalty" actually means: The ACCC's monitoring found no evidence that long-term customers receive better pricing in exchange for their loyalty. The opposite tends to be true. Long tenure is associated with higher prices, not lower ones. The longer you've been with the same provider without actively shopping, the more likely you are to be paying above market rates.

On conditional discounts: The ACCC examined how pay-on-time and conditional discounts operate and noted that these discounts, while real when conditions are met, can create confusion about effective pricing. A plan advertised as "25% off usage charges" with a pay-on-time condition is only that price for customers who never miss a payment. Customers who miss direct debits or have payment difficulties (typically those under financial stress) lose the discount in the periods when they most need savings.

What the AER Reference Price Tells You

Alongside the ACCC's market monitoring, the Australian Energy Regulator (AER) sets a reference price, the Default Market Offer (DMO), for each distributor network area. The DMO is not a recommended price or a fair price. It is a price cap and benchmark.

Plans priced above the DMO are, by regulatory definition, more expensive than the government considers appropriate as a starting point. Plans priced at the DMO are at the ceiling of what regulators consider acceptable for a default offer. Competitive market offers are typically priced below the DMO.

The DMO figure for your distributor network is expressed as an annual cost in dollars for a reference consumption level. To compare your current plan to the DMO, you'd need to know your annual usage in kWh and apply your current rates. Most households don't track this, which is why most households don't know where their plan sits relative to the regulatory benchmark.

When we read your bill, we can place your current plan relative to the DMO for your network area, giving you a regulatory reference point, not just a market comparison.

Why the ACCC Findings Understate the Real Problem

The $221 average is measured against new plans, not against the cheapest offer available anywhere in the market. It is also an average across every customer on an old plan, which flattens the range: the same report puts the gap at $408 in South Australia and $213 in south-east Queensland.

The ACCC's own switching figures are similarly bounded. Its finding that residential customers could have saved an average of $291 covers switching to their existing retailer's best offer, not to the best plan on the market. Source: Inquiry into the National Electricity Market, December 2025 report, ACCC, Table 3.3, page 37. What a full-market comparison is worth on top of that is not something the ACCC measures, and we are not going to put a number on it that no regulator publishes.

The ACCC's monitoring is also a snapshot. It captures the gap at a point in time. In practice, as more time passes without a plan review, the gap typically widens, because the market continues to evolve while a static plan doesn't.

Three Things the ACCC Cannot Do That We Can

1. Tell you your specific penalty The ACCC's figures are averages across the customer population. They cannot tell you whether your specific household is in the $50/year overpayment category or the $800/year category. That requires knowing your actual usage and your actual current rates, which requires reading your bill.

2. Show you the alternative The ACCC documents that cheaper plans exist. They do not show you which specific plan is the best available option for your usage profile in your postcode right now. The CDR does. We query the CDR.

3. Run the comparison from your bill The ACCC's findings confirm the loyalty penalty is real and widespread. What they can't do is close the gap between confirming the problem exists and showing you precisely how it applies to your household. That gap closes when a comparison starts from the bill itself: we read your actual bill, show every retailer publishing plans in your state, always, and compute your saving against what you actually pay, with any feed-in credit netted honestly.

How to Check Your Penalty Right Now

Your bill has the data needed to calculate your penalty. Upload it. We read your actual tariff rates (usage rate in cents/kWh, supply charge in cents/day, tariff structure) and run those figures against the full CDR dataset for your area.

The result shows you:

• What you're currently paying (annualised from your bill)
• What the best available alternative would cost for your usage
• The annual saving, your actual loyalty penalty expressed as a dollar figure

This is the check the ACCC recommends but cannot run for you. It takes 40 seconds.

After You Check

If the comparison shows you're on a competitive plan, you're one of the minority of Australian households in that position. The comparison will confirm it and you can stop wondering.

If the comparison shows a material saving, and statistically it will for a significant share of people reading this, you have a decision to make. Switching is straightforward, legally protected from exit fees, and doesn't interrupt your supply. The saving starts from the date the new plan takes effect.

The ACCC has spent years documenting that this problem exists at scale. The fix, for individual households, is a 40-second bill upload and a ten-minute switch process.

Three companion guides cover the rest of it. The loyalty penalty on Australian electricity bills sets out how the penalty accrues, stage by stage. Am I overpaying for electricity turns the regulator's averages into four figures you can read off your own bill. And if you have never actively chosen a plan, is my electricity plan too expensive is written for exactly that position.

The ACCC's retail electricity market monitoring reports are publicly available at accc.gov.au. Fix Your Bill is independent of the ACCC and AER. We use the government's CDR data feed for plan comparisons.