However, included with the third bill was a note from Sumo saying it would increase his rate by a staggering 55 per cent. The company said Ian's rate would go from 17 cents per kilowatt hour to 27 cents including discounts (or from 27 cents to 42 cents before discounts are applied). That's almost 10 per cent more than he was paying per kilowatt hour before he switched providers. It's just the type of behaviour that Victoria's energy regulator wants to stamp out with new rules.

Energy Minister Lily D’Ambrosio said such increases were shocking, and exactly why the state government was forcing retailers to fix prices for at least a year after customers enter into a contract. The government has directed Victoria’s Essential Services Commission to implement the new rules, to take effect in July next year, following the findings of an independent review into the state's retail gas and electricity markets. (The commission grants operating licences to retailers.) "This is outrageous – it’s why we’re taking power out of the hands of the big energy companies," Ms D’Ambrosio said of Ian's case. "We’re implementing a new rule that will force energy retailers to honour any contract offer for a minimum of 12 months to stop this from happening."

Ian, a Melbourne-based financial director who has requested that his surname not be published, said he queried the rate rise with Sumo after his latest bill, which arrived last week, included details of the increase. "I received an email from Sumo telling me that their rates were going up but no mention of how much or to what new rate," Ian said. "Attached to the email there were the new rates but when I got out my last bill I realised that they had gone up 55 per cent. I thought I must have calculated wrongly, but I rang their call centre the next day and they confirmed that indeed my rates had increased." However, when contacted by The Age about the matter, Sumo said the increase was a mistake, and a one-off.

"In this particular case, we have identified an isolated billing error," its spokeswoman said. "The customer should not have received a price rise and we have reached out to this customer to apologise and rectify this issue." However, a number of comments about Sumo on the Product Review website tell a similar story: "I signed up because they were on top of energy compare website, only to have my electricity rate double after 3 months," said one. "Massive price hike, exactly 3 months to the day since the welcome letter," says another. The cheapest listings offered by discounted price on the VEC website last week were $1830 over 12 months, offered by Sumo Power and also by Tango Energy. Sumo Power founder Dominic Capomolla is also the CEO of Tango. The new rates Sumo flagged three months into Ian's contract equated to a 55 per cent increase.

Without conditional discounts, such as for paying on time, Sumo’s offer leaps to $2900 annually, while Tango's doesn't change. Asked about the accuracy of its listing on the VEC website, the Sumo spokeswoman said the offer was "genuine". "However, rates can increase as the wholesale cost of electricity and other costs rise," she said. "This is standard across the retail sector. We make it clear to our customers that prices can vary over time from the outset," she said, adding that this information was included in the offer listed on the VEC website. "We typically only increase rates for our customers once each year. No customer will receive more than one price increase from Sumo this year."

In 2016 Sumo, which has a call centre in South Melbourne, promised to help customers avoid bill shock by offering fixed-price energy contracts. However, a study on Victorian electricity prices released by St Vincent de Paul in January found that Sumo had the highest average standing offer available in each Victorian network area, ranging from $3258 to $4094 a year, based on a single-rate tariff and annual consumption of 4800kWh. Tango had the lowest standing offers available, from as little as $1635, based on the same criteria. For Ian, Sumo’s explanation of the "error" was too little, too late – he has already returned to his previous retailer, Simply Energy. "I switched from Sumo back to my old provider, so now I’m paying more than I was on with Sumo, but a lot less than if I stayed with them after the 55 per cent increase," he said. The new regulations announced last week will require energy retailers to provide a default offer, give at least five days’ notice of price changes, and that they must tell customers, including via their bills, when they have a cheaper offer available.

Companies will also be forced to notify customers when they enter a contract about any potential for price changes during the agreement. Sumo Power and Tango Energy had the cheapest offers listed on the Victorian Energy Compare website last week for electricity. The VEC website is updated daily with information on new and existing offers. Retailers must provide information on any offers to the website within two days of them being made publicly available, or if they are about to expire. Each offer listed on the website includes a "price changes" section, in which retailers are required to notify customers about the process they will follow when altering their rates.