The head of Australia’s energy market rule maker says contentious proposed reforms to electricity pricing are “not about protecting networks from disruption” – and says she will respect the interests of consumers who have invested in rooftop solar and battery storage.
Australian Energy Market Commission (AEMC) chair Anna Collyer on Thursday set the scene for next week’s release of the final recommendations of its Pricing Review: Electricity pricing for a consumer-driven future, following consultation on six draft recommendations published in December last year.
The draft included recommendations to axe the “loyalty tax” – the name given to the phenomenon when consumers are unknowingly transferred to a higher-cost version of their retail electricity plan – and to make retailers compete for customers on standing offers.
But the AEMC’s proposal to raise the fixed price component of network tariffs – a move it argues will spread the cost of the grid more fairly among consumers – has dominated debate on the reforms, attracting strong criticism in submissions and on these pages, including here and here.
Critics of the proposal say higher fixed network charges will create a new set of winners and losers, the winners including high-income, high energy-usage households and network companies, with consumers locked in to cover sunk asset costs.
And the losers of the proposed reform, say critics – including IEEFA and the Smart Energy Council – would be households who have invested in energy efficiency upgrades, solar panels or batteries, as well as medium and low-consuming and potentially low-income households.
In an address to the Australian Energy Week 2026 conference in Melbourne on Thursday, Collyer acknowledged that the proposed network tariff changes had been the most hotly contested reform in what she describes as “the most high-profile piece of work I’ve been involved in as [AEMC] chair.”
But Collyer says she hopes that the final report will make clear that the market rule maker has “thought deeply about unintended consequences” of proposed changes to network pricing – and that the final report next week is not the final word on the issue.
“This is an area we have heard a lot about from stakeholders in how it could be done. We’ll unveil where we landed and what it means next week. But I want to make a few things clear about what it won’t mean.
“First, the final recommendations will be just that – recommendations. We will still need to receive rule change requests to consider each of them further, before any actual rules can be changed,” Collyer told the conference.
“So electricity tariffs won’t change next week. And no one will experience large, sudden price increases as a result of these reforms at any stage.
“The best way to think about this package is as a roadmap. If enacted the reforms would be implemented gradually – over the next decade – to suit a future world. Instead of the current arrangements gradually becoming more costly and confusing, and much harder to unwind.
“Second, this is not about protecting networks from disruption. It’s about making better use of CER (consumer energy resources) and other technologies to help avoid unnecessary network overbuilds that get passed onto consumers,” Collyer said.
“And finally, the interests of consumers who have invested in CER under the current arrangements will be respected.
“We have also done a lot of thinking about how to deliver new benefits to reward flexibility, which will be particularly well suited to home battery owners, and we will say more about that in the final report.
“Of course, we need to think deeply about unintended consequences – and the final report will make clear that we have.
But nobody I’ve spoken to believes that the problems we have identified aren’t real. And inaction in dealing with them has a much bigger cost.”
On the subject of “unintended consequences,” the AEMC in April released the findings of a report it commissioned from economists HoustonKemp focused on what consumer protections could be put in place to manage the risks of the network tariff reform.
“We don’t want to discourage people taking up solar and batteries,” Collyer told Renew Economy at the time.
“We think they’re very valuable, and that’s why we’re looking at … the different ways you could achieve the efficiency benefits, which are benefits for everybody without having any adverse impact on the incentives for solar and batteries. So that’s really, I think, an important message.
“[But] … being mindful that you don’t want to leave people behind in the transition is [also] important.
“And so if we can find a way that those customers [who can’t install solar] are not so disadvantaged without negatively impacting the people who are investing in solar and batteries… I think that would be great, and that’s what we’re trying to explore.”
Collyer said, then, that the broad aim of the proposed reform is to set a range of fixed-charge options potentially determined by factors like historical usage patterns or demand profiles. And then the onus would be on retailers to package up a variety of offers to suit different consumers.
“Quite a few different ideas have been put into the mix that mean it wouldn’t be one-size-fits-all, and that means you count those different characteristics of different users,” she told Renew Economy.
“The bit that we’re most interested in is the way the networks charge the retailers. And so one thing that we’d quite like to change is the assumption that retailers may simply pass through the network charge.
“Just because we say something happens at network level doesn’t mean the same thing happens at retail level – and what we’d really like is that, at the retail level, there are options for customers around, what kind of tariff suits me best?”
To this end, Collyer on Thursday said the “most radical recommendation” set to emerge from the AEMC pricing review was a rule change to shift the complexity of electricity pricing from households to retailers.
“Today, I can reveal that one of our final recommendations will be to enact rules that shift the complexity away from households and onto retailers and other energy service providers,” she told the AEW 2026 conference.
“These groups can work in the background to manage customer risk and bundle all the different input costs into simple, clear plans that work for different households.
“As I said earlier, our stakeholders challenged us to be bold. And I personally believe this is our most radical recommendation.
“Because for years we have tried to use network tariffs to send signals through to customers, with the aim of keeping the costs of the network down by avoiding future spending.
“And what we have seen is that sometimes those signals don’t reach customers at all, because they were absorbed or repackaged by retailers.
“And sometimes they do reach customers, but in a form that people find confusing or impossible to respond to.
“So, put simply: this recommendation is still about designing network tariffs to help keep network costs down.
“The difference is that we’re putting the complexity where the capability is and letting retailers and energy service providers translate those costs into simple, usable offers for their customers.”
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