Energy retailers will be forced to provide households and businesses with clearer information about possible jumps in electricity prices before consumers enter a contract.
The Australian Energy Market Commission has introduced a new industry regulation forcing companies to clearly disclose details about future price variations and when they will notify customers about changes.
It change also provides customers with a 10 business day cooling off period in case they choose to withdraw.
The new rule will apply to customers entering new energy contracts from May 1 next year in the ACT, as well as NSW, South Australia and Tasmania.
The change comes after the commission found some consumers were entering contracts without realising the prices under their contract could vary over time.
The rule was created in response to a request by two consumer action groups to force energy retailers to fix their prices for contracts that have a defined period of time or a benefit, such as a discount to standard energy rates for a specific period.
Chairman John Pierce said the commission had considered the request and conducted extensive market research into consumer experiences and contract preferences.
He said the change enabled households and businesses to still have a range of fixed and variable price options depending on their specific needs.
The survey results showed a mix of preferences with almost half of residential (45 per cent) and small business (47 per cent) consumers preferring a variable price, while a third (31 per cent) of residential consumers and a quarter (25 per cent) of small business consumers preferred a fixed rate.
But the Consumer Action Law Centre and the Consumer Utilities Advocacy Centre, the two advocacy groups who submitted the initial request, said the change wasn't enough and have lamented a "lost opportunity".
Law Centre spokesman Gerard Brody said energy prices should be fixed for the length of a contract.
"Energy companies think it's OK to change the terms of the contract as they wish and it seems the national rule maker agrees with them," he said.
Consumer Utilities Advocacy Centre executive officer Jo Benvenuti said consumers would continue to push for a fairer energy market.
