If you have noticed your electricity bill creeping up recently, you are not imagining things. After a period of relief in 2024, the latest data shows that electricity prices have started to climb again for many Australian households.
The Australian Competition and Consumer Commission (ACCC) has released its December 2025 inquiry into the National Electricity Market (NEM). This report acts as a thorough health check on the electricity sector, specifically looking at pricing and competition in New South Wales, Victoria, South Australia, and South East Queensland.
The report reveals a market that is becoming increasingly complicated to navigate. While there are protections in place, many households are paying significantly more than they need to—simply because they haven't switched plans in a few years.
We have analysed the 50+ page report to bring you the essential facts. Here is what is happening with prices, why loyal customers are being penalised, and the practical steps you can take to ensure you aren't paying too much.
The big headline from the ACCC is that electricity prices are on the way back up. Across all regions combined, calculated annual prices increased in 2025 compared to the previous year.
For residential customers without a 'controlled load' (a separate tariff often used for hot water systems), prices rose by an average of 6.0%. For those with a controlled load, the increase was 4.7%.
It is important to note that these figures are calculated based on typical usage assumptions and exclude government rebates or solar feed-in tariffs. This means your actual bill might look different, especially if you received energy relief payments. However, the underlying cost of the electricity plans has increased.
While the trend is upward, the impact varies depending on where you live. The ACCC broke down the price hikes by region for residential customers (without controlled load):
These increases are broadly consistent with changes to the "Default Market Offer" (DMO) and "Victorian Default Offer" (VDO)—the price caps set by regulators to protect consumers from unreasonable costs.
One of the most crucial findings in the report is the persistence of the "loyalty penalty." This term refers to the pricing gap between older plans (usually held by long-term customers) and newer plans (offered to attract new customers).
If you have been with your current electricity provider on the same plan for several years, you are likely paying a premium for that loyalty.
The ACCC found that older plans generally cost more than newer plans across all plan types. The difference becomes stark when looking at plans that are more than 3 years old. On average, customers on these older plans were paying about $221 more per year than customers on new plans.
The Default Market Offer (or VDO in Victoria) is intended to act as a safety net. It is a price cap for standing offers, designed to prevent customers who don't engage with the market from being charged excessive rates. It is generally not meant to be the best deal available.
However, the report found that 36.5% of customers on market offers—nearly 2.5 million households—are paying prices at or above these default offer levels. Even more concerning, around 434,000 customers are paying more than 10% above the default offer benchmarks.
The data shows a clear link between the age of your plan and the price you pay:
You might wonder why more people don't switch if savings are available. The ACCC acknowledges that the retail electricity market is becoming harder for everyday households to navigate.
The sheer volume of options is overwhelming. The report estimates that plan counts across the regions rose to 145,500 in 2025. A single customer with a smart meter could theoretically be offered more than 120 different plans.
The report highlights several "friction points" that discourage people from finding a better deal:
The report specifically flagged "demand-charge" plans as an area of concern. Unlike standard flat-rate plans, these plans charge you based on the maximum amount of electricity you use at a single point in time (your peak demand), in addition to your usage.
The ACCC found that plans with demand charges tend to be priced higher and saw larger price increases than other plan types.
Even more worryingly, customers on demand plans were significantly more likely to be paying high prices. 57.1% of customers on demand plans were paying prices at or above the default offer level.
There is some good news here: the number of customers on these plans has dropped by nearly 28% in 2025. However, if you are unsure if you have a demand charge on your bill, it is worth checking.
Despite the complexity, there are signs that consumers are getting savvier and regulations are helping.
Retailers are required to place a "Better Offer" or "Best Offer" message on your bill. This tells you if the retailer has a cheaper plan available for you and how much you could save.
The ACCC sees signs that these nudges are working:
However, many people are still missing out. The report notes that residential customers who were not on the best plan were quoted average potential savings of $291 per year simply by switching to their retailer’s better offer.
The ACCC expects reforms to roll out over the next few years to improve protections and reduce "gotcha" pricing.
The December 2025 report makes one thing very clear: set-and-forget is an expensive strategy in the electricity market.
Here is how you can use this information to your advantage:
Navigating 145,000 plans sounds impossible, but you don't have to do it alone. By staying informed and periodically checking your options, you can ensure you aren't paying more than you need to for your power.