Some people are going hungry and suffering immense psychological stress as they try to pay their power bills, an inquiry into Australia's electricity system has been told.
The Australian Competition and Consumer Commission is investigating electricity pricing and supply at the request of federal Treasurer Scott Morrison.
Electricity pricing and industry profits are under the consumer watchdog's microscope, as well as the level of competition in the market and factors that make it hard for householders and business owners to swap providers and understand their bills.
The Victorian Council of Social Service (VCOSS) has told the inquiry that electricity prices soared 119 per cent in the state in the decade to 2016.
"People are being pushed to the edge by electricity price rises," the council said in its submission.
A forthcoming VCOSS report will show people are making trade-offs on food and other essentials, and sometimes experiencing great psychological stress, in order to pay their bills.
In NSW, electricity retailers are announcing price rises of around 20 per cent for the next financial year due to surging wholesale prices.
NSW Energy & Water Ombudsman Janine Young said contracts offering the lowest prices often have discounts dependent upon paying on time via direct debit and in full.
She said this can prove difficult for people struggling financially, lumping them with late payment penalties and fees for failed bank direct debits.
Ms Young said discount contracts were confusing for customers because some discounts are on the total bill and others are on the consumption charges only.
The Consumer Action Law Centre said the complexity of the electricity market has stopped many people from engaging with it and reaping the benefits of competition.
"A particular concern for Consumer Action is that retailers are maximising their profits from disengaged customers in order to subsidise discounts and special offers for more engaged customers," chief executive Gerard Brody said in the centre's submission.
EnergyAustralia, which has more than 2.6 million electricity and gas accounts in NSW, Victoria, Queensland, South Australia, and the ACT, said it supported the introduction of an energy comparison rate similar to what customers see with home loans or petrol consumption metrics for cars.
"This would enable customers to make an adequate comparison by providing a consistent measurement," it said.
It said all of its customer material was written in plain language that is as easy to understand as possible.
"Pricing and discounting is inherently complex and there is no easy way to simplify this in a way that will result in lower overall energy bills for customers," it said in its submission.
A preliminary report is expected to delivered to the Treasurer by September 27, and a final report completed by June 30, 2018.
