Melbourne energy retailer Sumo has admitted advertising cheaper rates to sign up new customers before increasing electricity prices without warning several months into a contract.

In correspondence with an account holder who complained about a 70 per cent increase to the rate he had signed up for, not flagged until he received his first bill, a Sumo "customer solution specialist" said offering honeymoon rates to lure new customers was commonplace.

"It is common for retailers to offer 'acquisition' rates to new customers in order to entice people to sign up," the Sumo employee wrote.

"The rates are then subject to change at any time. This can occur soon after sign up, or after several months."

The company has said previously it could push up rates at any time, to cover extra costs, but does not appear to have admitted publicly before that it was using lower deals to lure new customers before increasing tariffs after they had signed up.