When Hans Brabandt received an AGL notice informing him he would be switched from quarterly to monthly billing, he thought "it's the same money, let it go".

Except, as Mr Brabandt soon found out, it was not the same money.

At his Marsfield unit in Sydney's north-west, Mr Brabandt, an IT technician, usually paid between $300-350 a quarter for his electricity. But after he was switched to monthly billing he found he was being charged almost $200 a month.

"If you were to stretch that over a quarterly period that would be $600, double what I was paying," Mr Brabandt said.

After contacting AGL, Mr Brabandt was told the bill had been based on an estimated meter reading and that he could be switched back to quarterly billing if he wished.

However the following day he received another bill for the same monthly period, for $400.

"I called the complaints department again and they confirmed that it was estimated billing. I didn't realise it was estimated, if it's estimated, I am paying for usage I haven't used, it makes no sense." he said.

"I spoke with [an] AGL resolution centre team leader ... who recognised the monthly estimated billing is misleading and admitted there were many complaints from other clients."

Mr Brabandt has since had the last bill put on hold, until AGL are able to have his meter read.

A spokeswoman for AGL said most customers chose monthly billing for budgeting and cash flow reasons.

"For customers with smart meters, real usage data (known as an actual read) is used to work out monthly bills," she said.

"For customers with basic meters that are read every two to three months, we use a process to estimate energy usage based on past energy usage which takes into account seasonal factors. When an actual meter reading comes through, accounts are adjusted if required."

When historical metering data is not available, AGL billing estimates are based on the average energy usage of similar customers in the geographic region over the same period.

Monthly billing has been available through AGL since November 2013, however in a communications campaign in late 2015 a number of customers received an email offering them the chance to switch.

AGL customers who do not open such emails are not changed onto monthly billing, only those who open it and do not opt out are switched to monthly billing.

AGL's spokeswoman said customers had not reported higher bills when on monthly estimated billing, but added that "customers contacted AGL on a variety of issues, mostly about how to understand their bill".

Another customer, Lisa Nash, said she had struggled with estimated bills sent to her elderly parents-in-law, after 25 years of having their meter read at the same address.

"How can estimated bills be allowed? It would be like going to the checkout somewhere and they tell you they are going to estimate the cost of your purchases not the actual price," she said.

"Estimated bills are unfair, make it difficult to budget and are ethically wrong where access is available."

Consumer Action Law Centre spokesman Jonathan Brown said utility providers often relied on a "lazy tax to milk extra profits".

"For utilities where estimates are used, it's particularly important to do a regular check and make sure you're not being ripped off," he said.

"Compare your bills to the same time last year and if there's a major difference it should be up to your provider to justify why. If competition is working effectively, companies should be fighting each other to lower your bill, not rely on you feeling stuck with them."

A nationwide survey in June by Energy Consumers Australia found that consumers believe they're getting better value for money from their banking, insurance, mobile phone and internet service providers than from their electricity supplier.

It also found that consumers are finding the barriers to switching providers too high, with few real alternatives.

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