Households and businesses could save thousands of dollars a year off their power bills under a plan to give consumers greater ability to compare and switch energy providers.
From February 2020, for the first time consumers will have greater access to information that banks hold on them and will be able to use it to shop around and get a better deal.
Now the Morrison government is looking at extending what is known as the "consumer data right" to energy providers.
Studies have found almost a third of electricity consumers do not switch due to the effort required and one-in-five don't act due to a lack of information.
However, if they shopped around they would find a $1000 difference between the best and worst plans in the market in NSW and South Australia, and small businesses could find better deals of up to $7000 depending on their state.
The consumer data right enables a consumer to access their personal information and authorise a business to provide safe and secure access of their data to trusted third parties.
It is hoped the new system would enable easier energy retail product comparison, switching of retailers, and make better use of technology such as smart metering, batteries and solar panels.
"Trying to find a deal that best suits your needs can be challenging," Treasurer Josh Frydenberg told AAP.
"Australians should be given more power over their own data, instead of being left in the dark by banks and energy providers."
The consumer watchdog has recommended a "gateway" model to ensure secure data access.
Under the model, the Australian Energy Market Operator provides data on a consumer's current electricity arrangements, from their current provider, to trusted third parties on the authorisation of the consumer.
"Sharing information such as a household's current energy deal and consumption pattern with other energy service providers will enable a consumer to find the best deal for them," the Australian Competition and Consumer Commission's Sarah Court said.
"This will enhance transparency and put consumers into the driving seat when it comes to comparing confusing deals, so they can find new and innovative offers that best suit them."
Australian Energy Council chief Sarah McNamara said the key to the plan's success will be to ensure adequate protections for consumers, at the lowest cost for industry.
She said it would complement work already being done to help consumers, including the new reference price, the Business Energy Advice Program and the online price comparator EnergyMadeEasy.
Australian Associated Press
