Only 9% of Aussies keen to switch power providers despite energy crisis

Fewer than one in 10 Australian bill-payers intend to switch power plans, even as an energy crisis causes bills to soar, new Canstar Blue research revealed.

Just nine per cent of more than 2,100 householders around Australia said they’d like to switch power providers in the near future, when surveyed between May 24 and June 24, 2022. This survey was conducted during the peak of an energy crisis that has caused regulators to warn of double-digit bill increases and energy retailers to shut up shop as wholesale energy costs rocketed.

This compares to eight per cent of respondents who said in November 2021 that they’d like to switch providers in the near future.

Additionally, a larger proportion of householders said they were on a “good electricity deal” in the more recent survey; 28 percent of respondents agreed that “I think I get a good deal on electricity” in November 2021, compared to 30 percent in May and June 2022.

Concerns about rising energy prices however, have not caused a larger number of bill-payers to switch providers, with the percentage that reported having switched in the past two years static at eight percent in May and June and eight months previous.

The findings come as another electricity provider told its customers to jump ship last week, claiming only the “lazy or crazy would stay” on its books.

In a statement sent to customers on June 20, Electricityinabox CEO Morgan Duncan urged them to “find a new provider today”, warning that Electricityinabox expected its rates to go up by as much as 95 percent on July 1, effectively doubling customers’ bills.

At least six other retailers have told existing customers to switch providers over the past few weeks, as soaring wholesale electricity prices exposed providers to unprecedented volatility in the cost of providing energy to customers.

Meanwhile, about 20 providers have stopped accepting new customers onto market-rate plans, and one provider has gone into voluntary administration.

With default prices set to increase by double-digits in south-east Queensland, New South Wales, Victoria, South Australia and Tasmania from July 1, there are concerns that the lack of urgency around switching may leave customers vulnerable to bill shock over the coming few months.

A spokesperson for ReAmped Energy, which has closed its business to new customers and urged existing customers to find a better deal with another provider, told Canstar Blue that the longer consumers waited to consider alternative energy plans, the less likely they would be to find such alternatives.

“The number of good deals in the market are shrinking as more retailers stop taking new customers, so it is best for people to consider making a move sooner rather than later,” the ReAmped Energy spokesperson said. “It is likely these difficult times could carry over for at least the next year so finding a good deal for the long term, if possible, is going to be really important.”

ReAmped Energy was one of the first companies to suggest its customers find a better deal. It said that since its announcement late last month, most of its customers had proven to be proactive.

“We can report that a large number of our customers have listened to the messages we have been giving them around switching providers and looking for a better deal,” the ReAmped Energy spokesperson said.

“We appreciate this is an unprecedented situation for customers to be in and that it may come as quite the shock to hear your retailer suggest that you leave. We want to thank customers for their loyalty as they do leave us to get a better deal and we hope that in the not-too-distant future we will be able to offer competitive pricing once again and they come back to us.”

ReAmped Energy and Electricityinabox both stressed that their announcements did not mean that the businesses were closing down. Customers who decided to stay would continue to be provided with electricity.

For more information regarding either of these retailers, it is best to visit the respective websites.

See the cheapest deals currently available in your state

How can I tell if I am on a good electricity deal?

Despite the lack of urgency around switching power plans, more than two-thirds (70 percent) of Aussies surveyed by Canstar Blue tacitly acknowledged that they didn’t think they were on a “good electricity deal”.

Christine Seib, Canstar Blue’s former Editor-in-Chief, said the only way for bill-payers to know if they were indeed on a less-competitive energy deal was to review rates from multiple providers.

“If you can’t remember the last time you switched power plans, whether that be to a new provider or with your current provider, you might find you aren’t getting the cheapest prices available to you,” she said.

“You mightn’t have noticed that your benefit period has lapsed or your retailer has moved you back to its standing or default offer, which is the capped price that it can charge you for electricity. So it can be worth checking your latest bill to make sure you know your rate and compare that rate against other providers’ rates to ensure you’re still paying a competitive price for energy.”

What constitutes ‘competitive’ can differ between households, depending on their size, location and of course, energy usage, but Canstar Blue suggests considering three key points.

1.What discount are you receiving on the ‘reference price’?

The Reference Price in our comparison tables refers to the maximum an energy retailer can charge you in your location and home set-up, based on a set of regulator-determined assumptions.

In south-east Queensland, NSW, and South Australia, this is called the Default Market Offer (DMO) , while in Victoria, it’s called the  Victorian Default Offer (VDO). In Tasmania, the state’s economic regulator sets default prices. These reference prices change at set points during the year, with the next change due on July 1. We’ve got the info on the upcoming changes in Victoria, in SEQ, NSW and SA and in Tasmania.

This maximum price makes an excellent tool for measuring what savings you could receive with each energy retailer. With Canstar Blue’s free comparison tool, the percentage figure relative to the Reference Price/VDO is highlighted next to the estimated plan price.

Keep in mind however, that these figures will change from July 1, 2022.

2.Will a cheaper supply rate help?

While finding a lower usage cost (that means your energy rate!) is a great way to chop down your power bill, it’s also important to consider what you’re paying in supply charges. That’s the fee charged every day for receiving power to your home and being part of the grid. For households with low energy usage, such as small households, looking for a cheaper supply rate may help to reduce costs beyond what can be achieved with a lower usage cost or rate.

3.What else can a retailer offer you?

Price is certainly a key factor when choosing an electricity plan, but as the market continues to fluctuate, it may be time to consider additional features that can add value to a plan. Does the retailer have a rewards program? Will it snag you a small discount at the bowser or off your next grocery shop? With inflation affecting all living costs, it may be handy to take these features into consideration too – just make sure you remember to use them!

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