Victorian energy customers who still use pay on time discounts may soon be slugged with higher costs for missing their due date, after the state’s energy regulator announced it will be increasing its cap on the discount.
Each year, the Essential Services Commission (ESC) sets a capped limit on the amount that retailers can charge for their pay on time discounts in Victoria. This is to help protect vulnerable customers from being over-charged for missing their conditional discount.
From July 1, 2023, the ESC said it will be increasing this cap from 5.71% to 7.16%, which means retailers will be able to offer bigger savings for their pay on time discounts to their energy customers.
For customers that miss these payments however, it could mean a bigger penalty to pay.
The new price cap will be in effect until June 30, 2024 and is relevant to retailer’s market contracts only. Energy providers can not charge a pay on time discount on their default offers – known in this case as the Victorian Default Offer (VDO).
Compare electricity plans in Victoria
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
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10% Less than VDO |
$1,304 Price/year (estimated) |
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Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. Costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Does the pay on time discount increase mean I’ll pay more on my energy bills?
While it may seem like a daunting change ahead, it is important to note that this increase will likely only affect a small portion of energy customers in Victoria. More specifically, the change will be relevant for households that enter a new market contract with a pay on time discount between July 1, 2023 and June 30, 2023. If you have a pay on time discount on a plan that doesn’t expire during this time period, then it’s likely you’ll be unaffected by the change.
It should also be mentioned that this price cap is only in place for pay on time discounts. So, if your energy plan doesn’t offer a pay on time discount you won’t be impacted at all by this change.
As for those who frequently use pay on time discounts, the coming change could still offer some additional savings to them, granted they meet the conditions of their discount – in this case, not paying their bills past the due date!
Are pay on time discounts worth the effort?
Though a dying trend, pay on time discounts may still offer some value to customers who are on top of their energy bill payments each month or quarter.
Canstar Blue Utilities Editor Tara Donnelly said as long as customers understood the conditions, there could be savings to be had.
“Pay on time discounts can be great for customers who are organised when it comes to paying their bills,” she said. “But for customers who prefer to set and forget or occasionally miss their due dates, it may prove more trouble than it is worth.
“For these kinds of customers, it may be better to utilise a more tangible discount instead, such as direct debit payments or online sign-up credits. Alternatively, if you are really concerned about the cost of your power or gas bills it may even be worth seeking additional financial support through a rebate or concession from your state or territory government.”
Check if you are eligible for an energy rebate or concession in your state or territory with our comprehensive cost guide.
Which retailers still offer pay on time discounts in Victoria?
There are currently only two providers still offering pay on time discounts on their energy plans in Victoria. These are:
Please note, however, there may still be some retailers offering pay on time discounts to existing customers.
Plans with pay on time discounts in Victoria
Here are the cheapest plans on our database that have pay on time discounts in VIC. This table includes products from referral partners†. These costs are based on the Citipower energy network in Melbourne but prices may vary depending on your own circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Image credit: fizkes/Shutterstock.com
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