The Australian Competition and Consumer Commission (ACCC) is urging Australians to contact their energy company and ask if a cheaper electricity plan is available, in light of recent price increases from 10% to 20% above the regulated price safety net.
The price safety net was designed to help consumers who don’t or can’t shop around for a better energy deal. It sets a price cap for how much energy retailers can charge consumers on default plans known as standing offer contracts.
Market offer contracts are plans that energy retailers design to attract different customers. They can vary according to things such as discounts, time-of-use pricing, and solar feed-in tariffs.
About 10% of residential customers are on standing offer contracts, compared to about 90% that are on market offers.
Everyone has a right to receive a standing offer contract, but energy companies are not obliged to move customers onto one when they increase the price of a market offer contract above the safety net.
‘You don’t necessarily need to change energy company to get a better deal. The simplest thing you can do is contact your existing company and ask how your current plan compares to the regulated standing offer,’ ACCC Commissioner Anna Brakey said.
Regulated standing offers are available to residential and small business consumers in NSW, South Australia, south-east Queensland and Victoria.
The price cap also acts as a benchmark known as the reference price. Energy retailers must use this as a means of comparison when advertising their offers to customers.
The case for switching to a different energy retailer remains strong as the cheapest offers in the market are often reserved for new customers. ACCC analysis shows that 90% of currently advertised market offers are below the reference price.
To compare offers go to Energy Made Easy, the free government comparison website for customers in NSW, Queensland, South Australia, Tasmania and the ACT.
For Victorian customers, go to Victorian Energy Compare, the free Victorian Government comparison website.
Checklist before agreeing to a new energy contract
- Carefully read the terms and conditions on the contract.
- Ask what the daily supply charge is and check if the charge is for the same number of days as on your existing electricity bill.
- Check if there are any extra fees such as for late payments or early contract termination.
- Ask if anything extra is included in the offer, such as bonuses or savings.
- Check billing and payment arrangements, including how and when you're billed and payment options.
- Ask what happens at the end of the contract period. How do you renew? What happens if you wish to change retailers?