Electricity tariffs

Retailers started installing smart meters in NSW in 2017, and since then EWON has been receiving complaints from customers about being moved from flat tariffs to cost-reflective tariffs.

Cost-reflective tariffs are structured with different prices for electricity used at different times of day, usually related to peak demand periods. This is designed to reflect the cost of supplying energy at the time it is used. This encourages customers to use energy when the grid is less busy potentially leading to lower electricity bills. Types of cost-reflective tariffs include:

• Time of use tariff, which has different prices for electricity based on the time of day and/or year or a demand tariff.

• Demand tariff where the demand price is often combined with another price, such as time of use. Demand is calculated by taking the total amount of energy used during a specified time, then this figure is used to calculate an additional fixed charge.

Flat tariffs include a single rate for electricity usage at all times of the day.  

Want to know more about electricity tariffs? Find out more here: What is my electricity tariff? 
 

Common issues arising from tariff changes 2017-2025

From 2017, the Australian Energy Market Commission’s (AMEC) Power of Choice reforms gave retailers the responsibility for the smart meter rollout. These new rules enabled customers to opt-in or ask their retailers to install a smart meter. Retailers could vary a customer’s tariff structure if they gave five business days' notice and were not required to seek explicit informed consent (EIC) from customers. Additionally, there were no requirements for retailers to give customers information about what their future bills could look like on a new tariff structure.

EWON complaints data, since 2017, consistently shows that many customers who moved across to smart meters experienced higher bills than they expected. In some cases, this was because their tariffs were changed from flat tariffs to new demand tariffs, particularly when the smart meter was installed at the same time as rooftop solar. Customers, however, were not fully informed about the difference between their old tariffs and the new cost reflective tariffs. See more information our 2024 EWON Insights article.

Common complaints to EWON include:

• customers called EWON confused about why they were switched from a flat tariff to a cost-reflective tariff without their consent.

• customers noticed their bills had increased at the same time their tariff had changed and were frustrated that they had not been consulted by their retailer before the switch.

• customers saw the new tariff on their bill and questioned what it was and what it would mean for their electricity usage. In many cases, after noticing the change in tariff, customers requested their retailer to return them to a flat tariff.
   

Flat tariff phase-out

As the rollout of smart meters has introduced new cost reflective tariff options, some retailers are phasing out flat tariffs all together. This doesn't automatically benefit customers. Data on electricity usage in households can be limited, so it can be difficult for both retailers and customers to work out which tariff will be better for them.

Customers who would like to stay on a flat tariff need to change retailers and request to be placed on another similar flat tariff.
 

Complexity of demand tariffs

Demand tariffs are particularly complicated because the pricing structure is usually based on a customer's highest 30-minute power usage during peak-times, rather than total energy consumed. This is difficult for customers to understand and to optimise their total energy consumption. EWON has consistently seen customers experience bill shock after a demand tariff is applied to their account.

For a consumer to benefit from a demand tariff, customers need to know how much electricity their appliances use and when, have access to near real-time energy usage data, and be aware of one-off events that could significantly increase their energy consumption.
 

Case studies

The following case studies illustrate the types of tariff related complaints we received over the past year before the smart meter rule changes came into effect on 1 December 2025. They highlight the need for clearer information to help customers understand their different tariff structures and why flat tariffs are no longer available or offered to customers.
 

Case study one

 Customer unable to move back to a flat tariff

Kamal had a traditional meter and was on a flat tariff. His retailer encouraged him to install a smart meter and move to a time of use tariff, advising that he could save money. However, the retailer was unable to estimate how much Kamal could save. Kamal’s bills increased after his tariff changed, so he requested to return to a flat tariff. The retailer said this was not possible and directed him to contact his distributor, but the distributor advised the retailers were responsible for billing and tariff setting. Frustrated by the conflicting advice, Kamal contacted EWON.

We provided Kamal with general information and referred his matter to a senior complaint resolution team at the retailer.

As a goodwill gesture, the retailer offered Kamal a $270 credit to address the difference in price between the time of use and flat tariff rates.

Case study two

 Customer doesn't understand demand tariffs

Heather signed up with a new retailer and discussed demand tariffs during the sign-up process. When she received her first bill, it included a $50 demand charge. Confused by the charge, she contacted her retailer for clarification. Feeling misled by her retailer, Heather rang EWON to complain about the lack of information provided during her initial call and how demand tariffs were presented on the retailer's website. We provided Heather with general information and referred her to a senior complaint resolution team at the retailer.

The retailer explained to Heather how a demand tariff worked and offered to waive the $170 account balance as a goodwill gesture. Heather later advised EWON that she had switched energy retailers.

Recommendations raised by EWON

Based on our experience with tariff complaints to date, we have consistently raised our concerns to the AEMC about consumer protections during the smart meter rollout, specifically:

• Recommended the need for retailers to provide customers with the right information at the right time to enable customers to maximise the benefits of smart meters, including information about tariff changes.

• Supported giving customers at least 30 business days' notice about changes to their tariff structures.

• Recommended giving customers the option to request an estimate of what their historical bill would have been under the changed tariff structure.

Read more about our concerns and recommendations here: EWO Joint Submission.
 

Accelerated smart meter rollout

In 2025, the AEMC introduced a suite of new rules to fast-track the replacement of traditional meters with smart meters across the National Electricity Market (New South Wales, South Australia and South-East Queensland).

The new rules require retailers to gain a customer’s explicit informed consent before changing the customer’s retail tariff structure following a smart meter upgrade. This requirement lasts for two years from the smart meter installation date and aims to prevent bill shock, allow customers to adjust to a new pricing structure, and ensure that customers have time to review their energy usage data before deciding what tariff is suitable for them. Customers can’t be moved to new tariffs without their consent.

NSW Government review of tariffs

The NSW Consumer Energy Strategy (2024) committed to:

• Advocate for national reforms requiring retailers to collect and provide advice to customers on the potential bill impacts of new tariffs before any changes are made (Action 27).

• Prohibiting retailers from automatically assigning customers to demand tariffs without their explicit and informed consent (Action 28).

The NSW Government is currently consulting on NSW Electricity Tariff Reforms to consider if it should be mandatory for certain retailers to offer a flat tariff standing offer to customers with smart meters. The NSW Government is also considering if retailers should provide an estimate of what the customer's historical bill would have been under the cost-reflective tariff, compared to the bill they received under their existing tariff. You can read more about it here: NSW retail electricity tariff reforms.

In our submission, EWON recommended that the NSW Government explore additional measures to support the effectiveness of explicit informed consent to reduce bill shock for customers switching to demand tariffs. We suggested this should include clear, easy to read information. You can read our submission here: NSW Tariff Reform.