The move will help reduce the complexity and opacity of the poorly understood electricity system, and prevent customers from being ripped off, Energy Minister Chris Bowen said.
The changes announced by the Australian Energy Market Commission include preventing retailers from increasing prices more than once a year, banning excessive fees for late payments, and prohibiting fees for vulnerable customers.
Retailers must also ensure vulnerable Australians are receiving their best available plan.
The changes are intended to clamp down on retailers who lure customers in with cheap deals, only to move them onto higher cost plans or impose hidden fees and charges.
"I'm not going to pretend that they're a silver bullet, but clearly, the situation hasn't been working," Mr Bowen told ABC Radio National on Thursday.
"There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change."
Research has found about 40 per cent of Australians don't read their energy bill. More needs to be done to ensure time-poor consumers receive their best offer, Mr Bowen said.
But it's only part of a broader reform process to make the energy system simpler and fairer, he said.
On Wednesday, Mr Bowen flagged tweaks to so-called Default Market Offer rules in a bid to force energy companies to compete harder for customer dollars and prevent unfair price hikes.
The regulations were intended to establish a benchmark price to limit price gouging and put downward pressure on prices through competition between energy companies, but were not working as planned, Mr Bowen told the Australian Energy Week conference in Melbourne.
Mr Bowen flagged reforms to the Australian Energy Regulator's price-setting mechanism for NSW, South Australia and Queensland to better align with Victoria's rules.
The commission's rule changes will be phased in over the course of next year, with the first tranche coming into effect on July 1 2026 and the remaining changes applying from December 30 2026.
