Electricity is a necessity, but electricity bills can be a nasty surprise, or something you dread receiving. It doesn't have to be like that.
Savvy consumers treat utilities such as electricity and gas as something you switch as often as possible to make sure you're always getting the best price.
Better $50 or more going into your pocket than someone else's, right? And sometimes it can be much, much more of a saving – which is always a pleasant surprise.
During the 12 months we ran Transformer, our energy retailer switching service, we gathered a lot of data on how the energy retailers compared for price, customer service and environmental sustainability. Here's what we found.
There is no best electricity provider across all Australia.
Since only NSW, Victoria, South Australia and South East Queensland are deregulated, we can't give a best Australian electricity provider overall, however EnergyAustralia served NSW and South East Queensland well, and Tango was the best for Victoria. While we would've liked to have supplied SA results, we didn't have over 30 switches for any one provider (see How we get our results). We were only able to compare publicly available plans, and not retention schemes devised by energy retailers, which are not public.
In 2018 CHOICE launched Transformer, a service that would continually switch people to new deals when they became available. We collated electricity provider offerings every three months to find the best deals, compared them to your bill and switched you if we found a better deal. Although the Transformer service had a limited lifespan, the year it was operational led to many insights into the industry, from pricing tactics such as bait-and-switch to increased pricing for solar owners.
Electricity retailing is a complex industry, but you don't need to know how a smartphone is built or shipped to you to understand how to use it; so the aim of Transformer was to make life simpler for people that signed up. We saved people $1.68 million over a year of continually switching subscribers to the service.
That's more than 13,000 bills compared, and $1.68 million that didn't go to electricity providers or companies like iSelect and Comparethemarket as a kickback. It's a small piece out of a potential $2 billion Australians could save if they regularly switched.
The vast majority of people were happy with the Transformer service, and CHOICE got insight into the complexity that comes with providing electricity in Australia's deregulated markets of New South Wales, Victoria, South East Queensland and South Australia.
Transformer was supported by technology provided by Bruce Mountain, who has since launched Beat Your Bill.
We've currently partnered with Bill Hero, a third party service that does essentially what Transformer was doing with a few differences. CHOICE has partnered with Bill Hero to help you save on energy. And while we make money if you sign up for Bill Hero, all funds go straight back into our nonprofit mission.
We found a small number of electricity providers that showed a number of issues during the year of Transformer operation, including:
Pricing problems with electricity providers
- Sumo and Globird in Victoria were accused of bait-and-switch tactics for changing prices soon after switching customers, and the ACCC took Click Energy to court for false or misleading marketing claims about discounts and savings.
- Sumo in Victoria and NSW had high penalties for late payments, sometimes above 40% of the entire bill. Strangely enough, energy retailers spin this late payment fee as a benefit.
Without Transformer, it would've been difficult to detect these changes, as we were checking bills on a three-monthly basis.
It's not all bad – some electricity providers are actually decent when it comes to pricing
- EnergyAustralia and Tango gave secure fixed pricing in contracts at competitive rates, as part of their EnergyAustralia No Frills and Tango Home Select and eSelect plans. These plans also don't have 'discounts' so don't impose large late payment penalties.
- Momentum, Qenergy and Tango had no late payment penalties.
Customer service problems with electricity providers
We also learned a lot about issues with customer service, especially in regards to bill clarity, website ease-of-use, communications, call centres, online chat and ease of switching:
- PowerShop's app was easy to read; their bill was not.
- Websites should be easy to navigate, with rates and charges easily identified, unlike PowerDirect's site.
- Poor feedback on call centres (Dodo, Globird, PowerDirect, Qenergy and Sumo).
- Some didn't have online chat, Sumo used scripts rather than a real person, and Alinta's support was less than satisfactory.
- You'd think ease of switching would be an electricity provider's most important task. But PowerDirect made you switch through a call centre only, as did Simply if there was some complexity such as solar, flexible tariff or life-support requirements. Alinta was unreliable when switching online so we had feedback that people thought they were switched when they weren't. Red was a mix of online form and SMS.
It's not all bad – electricity providers that are actually decent when it comes to customer service
- AGL, EnergyAustralia, Energy Locals, Lumo, Origin and Simply had good or very good customer service.
Green energy rating problems with electricity providers
- People who want to invest in green energy have limited choice. There were plenty of providers who simply didn't have plans during the year Transformer was operating, including Alinta, Amaysim, Globird, Mojo, Sumo and Tango.
It's not all bad – electricity providers that are actually decent when it comes to green energy
- There are also plenty that do, and even offer more than one plan if you want to go for a percentage of green energy or the whole hog, including AGL, Diamond, EnergyAustralia, Energy Locals, Momentum and PowerDirect.
Now that Transformer has finished operation, you don't have to go to commercial switching sites like iSelect and Comparethemarket. There are some free alternatives such as Energy Made Easy, a federal government initiative, as well as some state-based switching options – though only the NSW one compares your bill. We'd like to see more states offer this service, and the fact that NSW has successfully offered it sets a good example for other states to follow.
Once you find a cheaper energy retailer, you'll still need to do the hard yards and actually call them to start the switching process, but better that potential windfall coming your way than going into someone else's pocket. Make sure to regularly check your price though, as some may bait and switch.
And if you're interested in having your voice heard about energy in Australia, check out Energy Consumers Australia.