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Are you paying more than other customers for the same energy plan?

The pricing strategies of Momentum, Origin and other energy retailers make it hard to know if you're getting the best deal. 

woman looking at energy bill
Last updated: 19 June 2024


Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Energy retailers often roll out new deals to entice new customers, leaving existing ones paying more
  • When the new energy plan has the same name as the old one, it can really get confusing
  • We profile the cases of a Momentum Energy customer and an Origin Energy customer who fell prey to the pricing confusion

The way energy retailers fiddle with their prices can bring on bewilderment for even the most forensically-minded home economist. 

There are too many plans and too many moving parts. Pinpointing the best deal at any given moment seems impossible. 

"The justification for this huge range of variation in the prices of many energy products is questionable, when they are all essentially selling the same electricity," says Douglas​​​​ McCloskey, program director for energy and water at the Public Interest Advocacy Centre (PIAC), which is currently looking into consumer outcomes in the energy sector. 

"Why should two people in the same circumstances and in the same area be paying two wildly different prices for the exact same thing from the same retailer – and not know it?"

Different deals with the same name

One energy retailer manoeuvre that CHOICE has recently documented goes like this: the retailer offers customers enticingly cheap rates on a newly released plan, then raises those rates a few months after they sign up. 

Why should two people in the same circumstances and in the same area be paying two wildly different prices?

Douglas McCloskey, Public Interest Advocacy Centre

Then the retailer comes up with another new plan with cheaper rates to lure in more new customers, but they give it the same name as the earlier plan. Or is it actually the same plan? Either way, you have to sign up to the new 'new' plan to get out of the one old 'new' plan where your rates have gone up.

The result can mean that the first batch of customers ends up paying higher rates than promised, while a new batch pays lower rates – both on a plan with the same name.

Mark's story: 'I assumed it was a mistake' 

This is what happened to Mark, a customer of Momentum Energy. Having been with the company for over ten years, he switched to Momentum's 'Nothing Fancy' plan in May 2023 with the understanding that it was the cheapest plan on offer. 

Then, in July 2023, he was told the prices for the plan would be going up in August, costing about $600 more annually. But there was a way out – he could switch to a plan with cheaper rates, also called 'Nothing Fancy'. 

The notice from Momentum seemed absurd.  

"I was advised that my current plan was Nothing Fancy but if I switched to the Nothing Fancy plan I could save money. I assumed this had to be a mistake by Momentum," Mark tells CHOICE. 

I assumed this had to be a mistake by Momentum

What Mark didn't realise was that the 'Nothing Fancy' plan with the lower rates that started in August 2023 was a different plan to the 'Nothing Fancy' one he signed up to in May. But somehow it was also the same plan.

Confused? So are we. 

Between August 2023 and May 2024, Mark estimates he paid about $300 more for the original 'Nothing Fancy' plan than he would have if he'd joined the new 'Nothing Fancy' plan in August. His ten-year loyalty to the company had come to this.

solar panels wind farm energy

Trying to find the best energy deal can leave even the most determined bargain hunter scratching their heads.

Reimbursement offer falls short 

In mid-May this year Mark lodged a complaint with the Victorian Energy and Water Ombudsman. In early June Momentum told Mark they would reduce his current electricity bill by $50 and his gas bill by $40 to make amends. 

When Mark said that wouldn't be enough to drop his complaint to the ombudsman, Momentum upped the reimbursement offer to $100 for electricity and $81 for gas.

Mark thought it still fell short for a company that says it prides itself on looking after its loyal customers. 

The wholesale energy market has experienced unprecedented price volatility, which has made it difficult for retailers in setting prices

Momentum Energy spokesperson

In the end Momentum reimbursed Mark $377 for electricity and gas charges, more than what he thought he had overpaid. 

A Momentum Energy spokesperson tells CHOICE that the retailer has acted "fairly and transparently in respect of its pricing", adding that the company "goes above and beyond what is required by regulation in terms of informing customers about whether they are on the best generally available plan". 

"The wholesale energy market has experienced unprecedented price volatility which has made it difficult for retailers in setting prices," the spokesperson added.

Maggie's story: Origin Energy's shapeshifting offer 

Mark is not the only one who's lost trust in their energy provider's commitment to clarity. Another customer we heard from, Maggie (not her real name), had a similar experience with Origin Energy. 

When she received her Origin bill in March 2024, it indicated she could save $260 per year on the Origin Go variable plan. Since she was already on that plan, she assumed there was a mixup. 

"About a week later, I got an email saying they're extending my plan for another year. The email said the extended plan is less than the reference price [also known as the default price or standing offer], but didn't say if Origin had a better plan," Maggie says.

As of September 2023, energy retailers have been required under the Australian Energy Regulator's (AER) Better Bills Guideline to include a 'better offer' message on energy bills every 100 days. The better offer message means just that – the retailer must show you if it has a better offer than the plan you're on. 

The energy retail market is highly competitive with the best offers available from energy companies changing regularly to reflect market dynamics

Origin Energy spokesperson

But in Mark and Maggie's case, the better offer message suggested they change to plans they were already on. 

A few months later Maggie checked rates on the Origin website and discovered that, apparently, she should have been paying closer attention. 

"The Origin Go variable rate for new or moving customers was cheaper than what I was paying for the same plan. It was pretty quick and easy to switch to the cheaper rate, but the whole same name thing made it pretty confusing." 

An Origin spokesperson tells CHOICE: "The energy retail market is highly competitive with the best offers available from energy companies changing regularly to reflect market dynamics. Customers are encouraged to shop around regularly and compare plans." 

The spokesperson explained that there is only one Origin Go Variable plan available in the market at any one time, even though Maggie, who was on it, was invited to switch to it.

woman looking at energy ratings

Government-regulated energy comparison sites such as Energy Made Easy are helpful, but the number and changeability of plans can still lead to confusion.

'It's not ethical' 

Jacqueline Crawshaw, director of policy, energy services and markets at the consumer advocacy group Energy Consumers Australia (ECA), tells CHOICE that Momentum's and Origin's pricing flip flops aren't illegal, but they should be. 

"We'd like to see better consumer protections to protect people from this kind of behaviour. It's not ethical and we think energy retailers should do better by their customers." 

According to recent ECA research, only 35% of Australians are confident that the energy market is working in their long-term interests. In terms of trust and value for money, we rank them below supermarkets and banks. 

We'd like to see better consumer protections to protect people from this kind of behaviour

Jacqueline Crawshaw, Energy Consumers Australia 

An AER spokesperson acknowledged that "similarly labelled plans could be offered with different pricing to different customers at different points in time." The regulator recommends customers call their retailer if they have questions.

CHOICE campaigns and policy adviser Yelena Nam says such pricing confusion has all the hallmarks of unfair trading. 

"While it's unfair for energy providers to charge existing customers at a higher rate than new customers for the same plan, it's not illegal. Businesses are penalising their customers for staying loyal and this needs to change."

CHOICE is calling on the government to introduce new fairness laws to ban such practices.

When energy retailers get caught 

The Momentum and Origin price changes we documented are no different than what many other retailers are doing. But there have been cases where increasing prices shortly after a customer signs up has been found to be in violation of consumer law. 

In 2021, for instance, Sumo Power copped a $1.2 million fine in a case brought by the ACCC, which found it had offered cheap rates to lure in customers in Victoria with the premeditated intent of substantially raising them. 

Consumer consent isn't genuine if they can change the price and the terms of a contract during the course of that contract simply by notifying you

Douglas McCloskey, Public Interest Advocacy Centre

When we inquired with the ACCC about the issues with Momentum and Origin, a spokesperson told us energy providers "may be engaging in misleading conduct if they entice consumers to sign up to energy plans, when in fact the provider intends to materially increase the rates soon after the consumers sign up".

Changing the deal mid-contract 

Douglas McCloskey from PIAC tells CHOICE that pricing in the energy sector is highly confusing for consumers and regulatory oversight can only go so far.  

Perhaps the biggest issue is that Energy retailers can essentially raise prices whenever they like in the middle of your contract, a unilateral prerogative that McCloskey says is "at the heart of a total failure of the retail market at the moment". 

At issue is the matter of consent. When you sign up to an energy deal you give your consent to accept the terms on offer. But after this brief moment of agency your consent is no longer required. The retailer can change the deal, or they can keep you on a bad deal indefinitely, without your approval. All they have to do is tell you. 

Energy retailers can essentially raise prices whenever they like in the middle of your contract

"Consumer consent isn't genuine if they can change the price and the terms of a contract during the course of that contract simply by notifying you," McCloskey says. "Instead of just being on a flat offer, you might be changed to a time of use or even a demand offer. It's not a violation of the letter of the law regarding choice and consent, but it certainly goes against the spirit and intent of it and is not what anyone should reasonably expect." 

For McCloskey and the PIAC, it is one of many symptoms of an overarching problem: "We have a consumer choice and consent framework that really just isn't fit for purpose."

Jacqueline Crawshaw says the ECA "has heard anecdotal evidence through our research that consumers have signed up to offers only to find the price has increased within weeks or months", but establishing the extent of the practice is difficult. 

"It's really hard to show this stuff. It's really hard to see it, even though it's so widespread," McCloskey says. He adds that the cases we cite in this article are likely not isolated. 

"If you find two people it's happened to, it's affecting many, many more. That's kind of the cold reality of it." 

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

Stock images: Getty, unless otherwise stated.