Electricity like milk? The plan to simplify complex power bills

The spread of smart meters has opened the door to complex, and sometimes punishing, power prices. (ABC News: Brant Cumming)

The Australian Energy Market Commission has called for an end to complicated power bills, saying they have become too unwieldy for consumers.

A major review of electricity prices by the commission has also recommended a system to identify power retailers who are charging punters loyalty taxes.

The AEMC will soon release a final report into a contentious part of power pricing — how customers pay for poles-and-wires networks.

Power companies would be prevented from charging households complicated electricity bills under a proposed shake-up that would also shame providers slugging consumers with 'loyalty taxes'.

While delivering a comprehensive power pricing review, the Australian Energy Market Commission has called for an overhaul of how people pay for the service.

The AEMC is a key regulator that sets the rules in the national electricity market, the grid spanning Australia's eastern seaboard.

It said electricity bills had become "too complex, too hard to compare, and too often unfair" in a system it warned was leaving poorer and less advantaged Australians further behind all the time.

The commission says buying power should be no more complex than paying for milk. (ABC News: Erin Parke)

The commission said there needed to be a dramatic simplification of bills, arguing that paying for electricity should be no more complicated than buying a carton of milk.

"Think of how milk is priced at the supermarket," the commission noted.

"You do not get separate bills for the cow, the carton and the transport. You get one simple shelf price.

"This recommendation applies the same principle to electricity."

Also in the commission's sights are so-called loyalty taxes, or the practice by retailers of charging long-term or loyal customers more than new ones.

Late last year, the competition watchdog shone a light on the issue when it noted that barely a quarter of customers were on their retailer's best offer.

Many more consumers were paying prices above benchmark levels, which are supposed to act as a safety net.

Under the AEMC's plans, electricity retailers would be required to tell customers who have been on the same plan for four years "how much extra they paid compared to a better offer".

They would also have to make all their market offers available to existing customers and be required to report relevant data to the Australian Energy Regulator, which would publish it.

"For the first time, Australians will be able to see which