The Loyalty Penalty Is Real. Upload Your Bill to See How Much Yours Is

The loyalty penalty in Australian electricity isn't a theory. It's been confirmed, quantified, and repeatedly documented by the Australian Competition and Consumer Commission.

Here's the number, and here's what it actually measures. Customers on plans more than three years old pay on average $221 a year more, 10.5% more, than customers on new plans. That figure is about how old your plan is. It is not about whether you are on a default offer, and the two get confused constantly. 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.

Default offers are a separate measure in the same report. It found 36.5% of 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 media release rounds the first figure to 37%. Source: Inquiry into the National Electricity Market, December 2025 report, ACCC, page 3.

Two and a half million households priced at or above the safety net that was supposed to be the ceiling. And a $221 average gap for nothing more than letting a plan quietly get old.

ACCC Commissioner Anna Brakey put it directly: "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.

How the Loyalty Penalty Works

Energy retailers compete aggressively for new customers. They offer discounts, credits, and competitive introductory rates to attract sign-ups. Once you're with them, the competitive pressure largely disappears. The discount expires. The introductory rate gives way to the standard rate. The standard rate gets reviewed upward. And you, as an existing customer who isn't looking around, don't get offered the new deal they're running to attract the next wave of sign-ups.

This isn't accidental. It's the rational economic behaviour of a business that knows its existing customers are less likely to leave than a new customer is to be won. The acquisition cost of a new customer is high. The cost of marginally increasing an existing customer's rate is low. The spread between the two is the loyalty penalty.

The mechanism plays out in stages:

Stage 1, the honeymoon: You sign up with a competitive offer. Maybe there's a conditional discount (pay on time and get 15% off). Maybe there's a credit on your first bill. The plan looks good.

Stage 2, the drift: The conditional discount expires or the conditions become harder to meet. The base rate gets adjusted. These changes are disclosed, and they're legally required to be, but they arrive as footnotes in dense documents that most people don't read.

Stage 3, the penalty: You're now on a rate that's materially above what a new customer signing up with this same retailer would get today. Or above what a competing retailer would offer you if you asked. The loyalty penalty is fully operational.

Stage 4, the compounding: Every year you don't look, the gap typically widens. New competitive offers enter the market. The CDR data shows regular movement in plan pricing. The gap between what the market's best offers cost and what you're paying grows.

The Problem With Checking Whether You're Affected

Most people who suspect they're paying a loyalty penalty try to check by going to a comparison site. They enter their postcode. They see a list of plans. They try to compare the cheapest plan on the list to what they think they're paying.

This process fails for most people because:

They don't know their actual current rate. They know their last bill total. They don't know the cents-per-kWh figure on their current plan.

The comparison uses generic usage assumptions. The comparison site assumes a typical household uses 3,900 kWh per year. If you use more than that, the penalty is proportionally larger. If you use less, it's smaller. The average assumption produces a saving figure that may have no relation to your actual household.

The comparison doesn't account for your tariff structure. If you're on time-of-use tariffs with peak, shoulder, and off-peak rates, a flat-rate comparison produces a meaningless result.

The only comparison that actually answers the loyalty penalty question for your household is one that starts with your actual plan data, which is on your bill.

What Your Bill Actually Shows

Your electricity bill contains everything needed to calculate your loyalty penalty precisely:

• Usage rate (cents/kWh): What you currently pay per unit of electricity
• Supply charge (cents/day): What you currently pay just to be connected
• Tariff structure: Whether you're on flat, TOU, or demand tariffs
• Annual consumption pattern: Estimable from the billing period and usage figures

When we read your bill, we extract all of these. We then find every plan available in your area through the CDR feed and calculate what you'd pay on each plan given your actual usage and tariff situation.

The difference between what you're currently paying and the cheapest competitive option for your usage profile is your loyalty penalty. Not the average loyalty penalty. Your loyalty penalty.

What the Penalty Looks Like in Practice

The figures below are illustrative arithmetic rather than ACCC findings. They show what a gap of 5 cents/kWh to the market best is worth at three different levels of consumption, because the same gap costs a big household far more than a small one:

A low-usage household (2,500 kWh/year) with a usage rate 5 cents/kWh above the market best pays approximately $125 more per year. Not life-changing, but real money.

A medium household (5,000 kWh/year) with the same rate gap pays $250 more per year plus any supply charge differential.

A high-usage household (8,000+ kWh/year) with ducted air conditioning, electric hot water and a larger home can see penalty figures of $400 or more annually.

None of these households did anything wrong. They stayed with their provider. They paid their bills on time. In some cases they may have even called to get a better rate and been offered a modest discount that still left them well above market.

The Fix

The loyalty penalty is fixable. The process of switching energy providers in Australia is consumer-protected: you cannot be charged an exit fee for leaving a market offer plan. The switch itself is administered between the old and new retailer. Your supply is not interrupted.

The first step is knowing your penalty. Upload your bill. We'll read the actual rates from your bill, run them against live market data, and show you the number. What you're paying now, what the best available alternative would cost, and what you'd save in a year by switching.

If you're on a competitive plan already, the comparison will confirm it. If you're not, and for a significant share of people who've been with the same provider for more than 12 months you won't be, you'll have a clear number and a clear path.

Three places to take this next. The four figures on your own bill that settle the question are set out in am I overpaying for electricity. If you have never actively chosen a plan, is my electricity plan too expensive covers what a first-or-default plan tends to cost. And for the regulator's findings in full, with the caveats on what they do and do not measure, see what the ACCC found on electricity loyalty penalties.

The ACCC regularly monitors the retail electricity market under the Electricity Retail Code. The loyalty penalty figures cited reflect published ACCC retail electricity market monitoring reports. Fix Your Bill uses live CDR data for plan comparison.