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Work begins towards default energy prices

Forcing power bills down will start with the energy regulator wanting to know what the default price should be.

From Friday, the Australian Energy Regulator is hearing the details of a default offer price, which will be brought in if electricity giants don’t abolish standing offers by the start of next year.

Federal Energy Minister Angus Taylor says he wants them to be reduced by January 1 and for “loyalty taxes” – where customers end up paying more after cheaper prices to lure them in expire – to be gone by July 1.

“In the meantime it is crucial the AER continue its work,” Mr Taylor said.

The minister also expects retailers to take the lead in making it easier for customers to compare deals with a voluntary comparison rate.

A default market offer was a recommendation of the Australian Competition and Consumer Commission’s inquiry into electricity prices.

AER chair Paula Conboy wants Australians to have cheaper bills, while the sector remains competitive.

“Standing offer prices are generally applied to inactive consumers who don’t, or can’t, shop around,” Ms Conboy said.

“They are set by electricity retailers and as pointed out in the ACCC report, are unjustifiably too high.”

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