This message first appeared in our July 2026 newsletter. To stay up to date with the latest news and research on energy issues that impact consumers, sign up to receive our monthly newsletter below.
The current regulatory approach to energy sometimes feels a bit like dodgeball. Rules are launched and ducked; occasionally they hit, but usually not. At my school, the biggest kids invariably won the game (they got really good at working together to block), the injuries and grievances grew each match, and yet nobody was ever quite sure what the prize was they were playing for - other than to avoid being hit.
If the regulatory dynamic in a sector is invariably action/reaction, it can be no surprise that it will feel like – and often be treated like – a game. So, if you’re a firm with a barrage of rules speeding your way, the first instinct is to dodge, regardless of whether the rules will hurt or help. Over time the sense of pointlessness grows but the rules of the game don’t allow for it to stop. Certainly, nobody can remember how it started.
It’s also no surprise that what everyone is left with is an enormous catalogue of rules that were often designed to respond to a particular moment in time but are now on the books forever. Compliance becomes an industry in itself.
Perhaps I’m naïve but I do wonder if there’s a different way to do much of this, where firms are encouraged to catch the ball, rather than dodge it.
What I’m talking about here is adopting an outcomes-based duty to consumers. As you’ve heard me say before, many other sectors already do this - and it’s past time that energy does the same.
A culturally and ethically secure sector wouldn’t wait to be told what to do, and then paint as close to the lines as it can get away with. Firms would recognise their duty to consumers as providers of an essential service - and actively design their products, distribution strategies, target markets, customer segmentation and pricing accordingly. They wouldn’t want to, or need to, put their sole focus on navigating myriad, often outdated rules.
Instead, they would interrogate every part of their business model with simple, first principles questions in mind: is this fair, is this reasonable, is this equitable? I think it’s accurate to say that so long as your preoccupation is following externally imposed rules, rather than asking what game it is you want to play and for whose benefit, you’ll feel like you’re still in primary school.
In this new world, regulators could free themselves from the lower order work which seems to me to dominate their time. Rather than prescribing rules at a level of eye-watering minutiae (or releasing guidelines which the firms don’t follow precisely because they’re not rules), they could do what they’re best at - holding firms to account by testing that what is promised is delivered.
To be clear, this doesn’t mean we chuck out all the rules - far from it. Rather, we keep (and where necessary firm up) the rules where they are demonstrably the best way to protect consumers. But where they provide no demonstrable benefit or only add cost, then it’s reasonable for them to come off the books (this is what the Treasurer would call “right-sized regulation”).
Some have asked me how I could possibly trust energy firms and my response is always the same: trust is earned, not bestowed, and how can they possibly earn our trust unless given the chance to show their colours? And when they are tested - which must be often - and fail, regulators need to have powerful sanctions and penalties.
Some might be concerned that an outcomes-based duty would result in some kind of ‘kumbaya’ arrangement - all principles, no performance. Not so. The beauty of such a duty is that there’s nowhere to hide. A retailer, for example, would be required to demonstrate that products are suitable, prices are fair, there is a decent exchange of value, and that consumers genuinely understand the information put before them.
Underpinning these specific outcomes would be cross-cutting principles to act in good faith, avoid foreseeable harm, and enable customers to pursue their reasonable objectives. The key word here is ‘demonstrate’. This requires foresight, design, reporting and analysis - all attributes of mature retail performance.
An outcomes-based duty for banks (‘to operate efficiently, honestly and fairly’) was introduced in 2002 but only really took hold after 2019 when it became enforceable and punishable by penalties. Since then, the change has been remarkable. Where once banks didn’t pick up rocks for fear of spiders crawling out, they now have to actively design their rocks, place them properly, and monitor what lives underneath. Banking is a different world now than it was then. The same is needed for energy.
We have been very pleased that in a recent report the ACCC recommended that the model of a consumer duty we have developed is worthy of real consideration. If you want to read some further detail on what we’re proposing, I’d highly recommend you look at the reports and, in particular, the model on our website. Our thanks to Prof Jeannie Paterson and Evgenia Bourova (Melbourne Law School) and Prof Lauren Willis (Loyola University, LA) for their great help.
