Aussie households could be saving up to $404 a year on their power bill, simply by switching plans, according to new data from the industry regulator.
Despite rising electricity prices, the Australian Energy Regulator (AER) found in its annual market report that households that switched from a standing offer to a market offer in September 2022 could have saved between $120 and $404 a year in electricity costs, depending on their location.
A standing offer refers to the default price that energy retailers charge customers in a given location. In New South Wales, south-east Queensland and South Australia this may be referred to as a Default Market Offer (DMO), whilst in Victoria, this is called the Victorian Default Offer (VDO). Pricing for these plans is regulated by the AER, or in Victoria’s case, the Essential Services Commission (ESC).
A market offer however is, in most cases, a cheaper alternative to these plans. Typically, they come with a discount of some kind that helps reduce the overall cost, whether that be a conditional discount, such as paying on time or by direct debit, or simply just lower usage and supply rates.
Customers in NSW were found to benefit the most from switching between the two types of plans, with savings starting from $216 and reaching as much as $404 annually, depending on which of NSW’s three distribution networks a household was on. This was closely followed by households in the ACT, which could have saved $345, SA ($122) and south-east QLD ($120).
Across all five of Victoria’s electricity distribution networks there were savings between $120 and $193 a year on offer for those that switched.
A similar story was also noted for natural gas plans by the AER, with customers who switched from a standing to market offer potentially saving between $47 and $149 annually across NSW, SEQ, SA and the ACT. Customers in VIC could have saved up to $189 a year by switching gas plans.
Tara Donnelly, Canstar Blue’s Utilities Editor, said the data should be a testament to consumers that there are still decent savings to be had for those who look.
“Despite the ongoing market volatility for energy customers on the east coast, the AER’s latest report has reiterated that there are still some savings on offer for those willing to make the switch,” she said. “At least one in 10 households are still on standing offers, which means there are still a large number of energy customers potentially paying more than they need to for power.”
Soaring wholesale electricity prices have plagued the energy market since late April 2022, causing both regulators and retailers to increase prices. These changes began to flow through to customers from June 2022.
According to the AER, the median electricity market offer increased by between nine and 20 per cent across the various states and territories mentioned above from June to September in 2022. States with DMO pricing saw between a seven and 15 per cent increase for standing offers during this time.
Natural gas offers saw a similar increase, with the median market offer price increasing by between five and 16 per cent across NSW, Victoria, SEQ, SA and the ACT.
Electricity prices were also recently forecast to increase again by 50 per cent over the next two years in the latest Federal Budget.
Ms Donnelly said it served a timely reminder that regularly comparing offers could make all the difference.
“While energy savings may not be to the magnitude that was seen over the last two years, it still clearly pays for Aussie consumers to stay informed and keep an eye on the market regularly,” she explained. “If you can’t remember the last time you switched plans or providers, there is a chance you could be paying more than you need to for electricity or natural gas.
“Now may be the time to go over your plan details and ensure you’re on the best possible deal for your household usage, particularly as we approach the new year.”
Which provider has the cheapest plan in your state? Compare below
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†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/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. 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†. 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. 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. 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†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/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. 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†. These costs are based on the SA Power network in Adelaide 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. 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.
Are customers actually switching plans?
Despite earlier reports that customers were uninterested in switching plans or providers amid the crisis, the AER found that switching rates for electricity plans had increased by the fourth quarter of 2021-2022. Gas plan switching rates however, were found to have slowly declined in the last 12 months.
Typically, the most engaged customers for electricity plan switching were in VIC and NSW. Households in the ACT, however, also showed more engagement around electricity switching during 2021-2022.
In VIC alone, the Essential Services Commission (ESC) noted that almost 90,000 customers, both residential and small business, had switched electricity providers in June 2022. This was likely due to consumers looking for a better deal post-price hike or as a result of their retailer failing.
Eight retailers have left the industry since the beginning of the crisis, including Australia’s first community-owned provider, Enova Energy.
Of those Victorians that had switched providers, the ESC noted that most generally moved to a larger provider, such as AGL, EnergyAustralia or Origin Energy.
Looking for a little more value from your electricity provider? Check out our latest Outstanding Value award winners
While price is arguably an important factor when picking a new plan, sometimes it pays to find a provider that is offering just that little bit more. Whether it be great customer service or speciality plan features, finding a provider that offers great value could make all the difference for your energy needs.
That’s where Canstar Blue’s Outstanding Value awards can come in handy. Our awards use our unique Value Rank methodology, to identify retailers that had a particularly strong performance over a three-month observation period. While price played a significant role in the decision, it was also these providers’ extra features and customer satisfaction ratings that helped get them over the line.
Our 2022 Outstanding Value Electricity winners in each state are as follows:
- Powershop: NSW and Victoria
- Nectr: QLD
- Sumo: SA
- Red Energy: ACT
- 1st Energy: Tasmania
For a full wrap up on the winners and to see what made them stand-out, check out our awards page.
Image credit: fizkes/Shutterstock.com
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