Consumer watchdog shows the way on electricity pricing

If the Australian Government adopts the recommendations of a recent report by the Australian Competition and Consumer Commission (ACCC), electricity prices might finally come down.

The report is a result of last year's electricity supply and prices inquiry that aimed to identify the root causes of high electricity prices across the entire electricity supply chain. The report concludes that the current high electricity prices are "unacceptable and unsustainable".

The report makes 56 recommendations that aim to improve electricity affordability.

Some of these recommendations could make a tangible difference to the lives of people struggling to keep up with their electricity bills.

The ACCC recommends that pay-on-time discounts should be abolished. They argue that these discounts are, in effect, very large late payment penalties that unfairly punish people who are already struggling with high electricity prices.

The ACCC also recommends that a new benchmark price should be set by the Australian Energy Regulator that would provide a clear reference point for people looking for the best energy deal.

A default offer would be set at or below the benchmark price which would contain simple pricing, minimum payment periods and paper bills.

The ACCC says that moving people over to a new 'default' offer could result in savings of $500 to $750 a year.

If these recommendations are put in place, it would be a great start to making the energy market both fairer and easier to understand.