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 default offer customers: Households on standing offers and default market offers pay substantially more than households on competitive market offers. The gap, as documented in recent monitoring reports, averages $221 per year for a typical residential customer. The ACCC's characterisation of this has been unambiguous: "Loyalty penalties are alive and well in the retail electricity market."

On the scale of the problem: The most recent monitoring identified that approximately 37% of electricity customers (close to 2.5 million households nationally) are paying at or above the default offer price. These customers are, by definition, not on competitive market pricing.

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 figure is calculated against the DMO, the regulatory benchmark, not against the cheapest available market offer. The cheapest competitive market offer is typically 15–25% below the DMO. The real saving available to a household currently on a standing offer, relative to the best competitive market price, can be $400–600 per year for moderate to high usage households.

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 available retailer 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.

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.