Paying too much for your energy?
Are you paying too much for your energy? If you haven't reviewed your energy plan recently, chances are the answer is yes.
Most Australians count electricity bills among their main concerns when it comes to expenses, and that's only going to get worse with double digit increases in retail electricity prices expected for consumers living along the Eastern Seaboard. Thankfully, there's something you can do.
Aside from finding ways to save energy around the house to reduce the amount you spend on electricity, you may also be able to look around for a better deal with a different energy supplier. It just depends on where you live.
Can you change your electricity retailer?
If you live in:
NSW – Yes
Qld – Yes, if you live in South-East Queensland
Vic – Yes
SA – Yes
ACT – Yes, but there's little variation in pricing as this is a regulated market
Tas – No (Aurora Energy is your retailer)
NT – No (Power and Water Corporation is your retailer)
WA – Yes, in some places, but there is little variation in pricing as this is a regulated market.
What kind of plan are you on now?
Before you look at the other options available, check what you're currently paying. While it's rare, there may also be fees associated with changing your plan or retailer. If you can't find the info on a past bill, call your retailer and ask them.
While you're looking at your old bills, look for an indication of your daily costs and usage (this usually includes a graph indicating your usage for the past year). You should be able to see if there is a big variation between your winter and summer energy, which can help you calculate your average yearly consumption.
This will be helpful when you're comparing offers.
How are you charged under your current plan?
You'll need to know what kind of tariff you're currently being charged to see if there's a better deal available for you. This will be either:
- a single flat rate at all times
- a multi-flat or block tariff, which includes stepped pricing that decreases the more power you use
- a flexible or time-of-use tariff where prices vary based on the time of use
- a lower price at night for heating hot water, for example, with a single flat rate for everything else. (This is an off-peak rate that is linked to a specific appliance that only works at off-peak times and may be referred to as a 'controlled load' tariff on your bill.)
You'll be charged in one of these ways, depending on what type of meter you have. For time of use or flexible tariffs you need to have a smart ‘time of use’ meter. If you have an older 'accumulation' meter you'll be on a flat or block tariff.
You're also charged a daily supply charge by retailers, irrespective of your level of energy use.
- If you have an old electric storage hot water system, it's worthwhile considering your alternative hot water system options now before it goes. Water heating can account for a quarter of typical household energy use and you may find a system that saves energy and money and is kinder to the environment.
- If you have a pool pump or under-floor heating, investigate whether you can get it linked to a 'controlled load' tariff and the level of potential savings.
- If you're on a time-of-use plan, when buying your next dishwasher or washing machine consider buying one with a delayed start option. Also investigate smart meters.
Other electricity plans available
What other plans are out there?
Electricity retailers have to publish a 'fact sheet' for every retail plan they offer. These are available on energymadeeasy.gov.au and outline rates and conditions of each offer and any additional fees that they charge.
There's a lot of variation between plans offered based on the geographical location of the property and the electricity distributor that services the area.
- If you're in Victoria, check out the government comparison site yourchoice.vic.gov.au.
- The Australian Energy Regulator compares energy deals for other jurisdictions at energymadeeasy.gov.au.
- Be cautious when using commercial switching sites as they can be full of traps for unwary users. These sites may not consider every plan offered in the market and often exclude or promote deals based on whether they earn a commission from the energy retailer.
When comparing deals, consider:
- the rate per kWh.
- fixed supply charges.
- discounts: do these apply to the whole bill (fixed supply charges and usage charges) OR for usage only? This can make a big difference to the savings.
- late fees if your don’t pay your bill on time - pay on time discounts are common on many plans. Consider establishing a direct debit payment otherwise you'll be paying substantially more.
- billing – how often do you receive your bill and how can you pay?
- other fees – for example, fees for receiving paper bills or for paying with a credit card
- length of contract – are there any exit fees or moving home fees applicable? Many retail electricity plans offer a 12-month contract period but very few will fix electricity rates for this period. Generally the contract will lock in a percentage discount over your contract period.
- other terms and conditions.
- your gas plan – if you have mains gas, find out whether it's cheaper to move both your electricity and gas to the same retailer. Many retailers offer you an extra discount for doing this but it pays to check if their underlying rates are actually competitive.
When evaluating other plans online, also consider the following:
- Take a look at the level of savings associated with each plan. Note that often these estimates assume that you pay your bill on time and that you pay by a certain payment method, such as direct debit.
- The level of savings associated with each plan is typically for the first year only and may include, for example, a $50 credit on your first bill. So if the plan is for more than one year, the savings would not be the same for subsequent years.
- Check the surcharge for GreenPower. (You can also read our story Is GreenPower worth it?)
How to switch energy providers
- If you find a better deal, contact your current provider and see if they'll match it or do better. If they can't, then it's a good time to re-check any fees that would apply if you leave.
- If you decide you want to switch, you can contact the new retailer directly.
- The switching process can take up to 3 months to complete, depending on your retailer, distributor and where you are in the billing cycle. It's generally quicker if you have a smart meter installed.
- Your electricity or gas supply won't be interrupted when you change contracts or move to a different retailer.
Know your rights
If you're switching electricity plans, you have a five to 10 business day cooling off period which begins on the date you receive information about the energy contract. (Ten days apply in NSW, SA, Vic and SE Qld). You can change your mind and cancel the contract within this period
If you're being door-knocked or called by telemarketers, consider the following:
- Don't feel pressured to make a decision on the spot.
- For door-knockers, ask to see their identification. By law, they have to show you. If you ask them to leave, they must leave immediately.
- There have been reports of salespeople saying that "your supplier won't change". This isn't true. The distributor (i.e. the poles and wires) that supplies your electricity won't change but your retailer (the one that bills you) will change.
- If you don't like people knocking on your door, you can get a 'Do not knock' sticker to put out the front of your house.
- If you don't want to be contacted by telemarketers, you can register with the Australian Government's Do Not Call Register online or by calling 1300 792 958.
Fixed-term contracts and unilateral price variation
Consumer rights groups have long been trying to put a stop to unilateral price variation – the practice of energy retailers changing the price of energy (make that 'raising' the price) in fixed-term contracts in the middle of the contract.
Retailers claim it's necessary because their costs can go up during the duration of the contract, and so far regulators have sided with the retailers on the premise that ending unilateral variation would lead to higher prices for consumers.
But unilateral variation looks like an unfair contract term to us and the battle continues. With no end in sight, it's something to bear in mind because it means the price of gas or electricity in effect when you signed a contract can and probably will go up.
There has been one small consumer win thanks to the efforts of consumer groups: retailers now have to make it more clear in the contract wording that prices can change and they must communicate any price changes more proactively rather than having customers finding out on their next bill.
What about solar?
If you have solar panels, check out CHOICE articles on solar.