How Australian’s can avoid paying too much for their energy

Like many Australians, you probably get a rude shock when you open your energy bill. No matter what steps you take to reduce your energy usage, it often ends up being way higher than you expected.

And it’s not hard to find the likely reason why.

While the cost of power has shot off the charts since 2008, only around 50% of your bill is made up of fixed network and distribution costs.

The rest of it is set by your supplier and depends on your plan.

And the difference between the cheapest and most expensive deals in the market can be huge. In fact, in 2019 the Australian Energy Market Commission found customers could have saved as much as $760 by switching between the two.

To make matters worse, even if you found yourself a great deal – there’s a very good chance you’re still being overcharged if you signed up more than a year ago.

Why it pays to shop around regularly

The energy market has been deregulated in many parts of Australia. And with deregulation comes choice. Depending on where you live, there can be more than 25 different providers competing for your business.

And the best way of attracting new customers? By having lower energy prices than your rivals.

Because your energy will be the same whether it’s supplied by company A, company B … X, Y, or Z. The only difference is how much you’re charged for it.

So if you don’t regularly check out what the competition is offering, you’re likely losing out. And your current supplier? They’re probably laughing all the way to the bank.

But that’s only half the story.

Energy providers change their products and pricing all the time. And those discounts, incentives and eye-catching prices they use to lure customers in are often time-limited deals.

They are known as ‘market offers’ and typically run for between 12 to 24 months. After that, your provider can automatically switch you to the ‘default market offer’ (DMO).

DMO prices are set by the Australian Energy Regulator and will vary depending on where you live and the distributor.

And while DMOs were brought in to protect customers from “unjustifiably high prices”, they are often a lot more expensive than comparable market offers.

Essentially, they are the absolute maximum your energy provider can legally get away with charging you.

Ouch.

How much can you save?

To see how much you could save, let’s assume you’re with one of the ‘big three’ electricity retailers – AGL, EnergyAustralia and Origin Energy – and you’ve been moved onto their DMO.

Even simply switching onto their cheapest market offer could save you hundreds of dollars a year.

For example in Brisbane, the DMO is currently set at $1,508 for annual usage of 4,600kWh on the Energex network.

Switch to:

• AGL’s Essential plan and you’ll pay $1,251
• EnergyAustralia’s Total Plan Home and it costs $1,305
• Origin Energy MaxSaver and it’s $1,327

That gives you an extra $181 to $257 in your pocket – and that’s even without looking at all your options. And it’s often the lesser-known companies that have the most competitive deals.

The moral of this story?

Regularly compare your bills, so you don’t pay more than you should for your energy.

Ready to save on your energy bill? It only takes 30 minutes for you to switch onto a better deal. Apply Now to get started.