Power price rises will be limited to once a year under rule changes in Victoria.

The Essential Service Commission has announced reforms that will prevent electricity and gas companies from pulling a “bait and switch” on customers, luring them in with discounted offers before hiking prices within a few months.

From July 1, energy retailers will only be allowed to increase prices once a year, and when they do, they must clearly communicate to customers when the prices may change.

“These reforms will help Victorians have confidence in the deal they are signing up to, knowing they will be protected and there won't be any nasty surprises,” commission chairperson Kate Symons said.

Retailers must maintain discounts, credits or rebates for the entirety of a customer's contract.

There is also a new requirement that energy companies provide a comparison to the Victorian Default Offer.

Customers will be rolled given this price for electricity, or the best offer for gas, at the end of their contract.

Pay-on-time discounts will be capped by the commission, so that customers who miss a bill payment do not face a large increase in costs.

Previously, energy companies could back-bill 9 months' worth of bills if they undercharged customers.

The commission looking at reducing the back-bill period to 4 months.

Victorians can respond to the proposals on Engage Victoria until March 27.