Wouldn’t it be great if the details of electricity plans were easy to understand and you could see an accurate comparison of costs before signing up with a new provider? At Canstar Blue, we like to make sense of the complicated, and in this report we show consumers in New South Wales what they are likely to pay with the state’s major energy companies.
Based on the cents per kWh usage costs and daily supply charges of the energy companies in this review, plus average energy consumption statistics from the Australian Energy Regulator, we can show households that are connected to the Ausgrid network in Sydney where they can find the cheapest electricity prices. The Ausgrid network covers inner, northern and eastern metropolitan Sydney, plus other surrounding areas.
Which electricity provider is cheapest in NSW?
There is often a perception that electricity prices vary little between different providers, but as you will see from the comparison table below, they certainly can do. So, where can you find the cheapest electricity plans in NSW? These quarterly costs are based on five-person households with average energy usage. We have selected the highest discounted offer from each provider.
|Electricity provider||Electricity plan||Discount||Non-discount cost||Discount cost|
|Red Energy||Easy Saver 10%||10%||$499.62||$466.97|
|Energy Australia||Flexi Saver||18%||$521.82||$474.52|
|AGL||Set and Forget||20%||$546.93||$491.69|
|Dodo Power & Gas||No Term Market Offer||20%||$515.13||$463.76|
|Simply Energy||Simply Plus||15%||$533.42||$492.53|
|Momentum Energy||Smile Power Plus||2%||$492.73||$487.88|
Costs based on annual usage calculations broken down into quarterly payments. Calculations based on statistics from AER for a five-person household on the Ausgrid network. October 2016.
Based on these calculations, we can see that Momentum Energy and Red Energy provide the cheapest quarterly electricity rates in Sydney, before any discounts are taken into account. However, after conditional discounts have been added, we discover that Dodo Power & Gas and Red Energy offer the lowest prices, with Energy Australia not far behind.
Getting the best energy discounts
Looking at the details above, it’s clear to see the importance of discounts in reducing your overall electricity costs. This is not to suggest that the energy provider with the biggest headline discount offer will always work out the cheapest, because this is quite often not the case at all. Red Energy has one of the lowest headline discounts at 10%, but works out one of the cheapest overall.
As our findings show, you could knock hundreds of dollars off your bill over the course of a year if you stick to the conditions of the discount. Most energy providers will offer some kind of discount for things like paying your bills on time, by direct debit, or for receiving communications via email. However, make sure you understand the finer details of any discounts, including whether it is a discount off your entire bill, or just usage or supply charges. This can be important because a discount on your usage charges will likely save you more than a discount off supply charges.
Also remember that energy discounts are conditional, which means that if you fail to meet the conditions of your plan, the discount will be removed and you will go back to paying the full rate. You may even incur a fee, too.
Check the benefit period
Energy discounts can significantly reduce your overall power costs. However, it’s hugely important that you understand the benefit term of the plan you’re signing up to. The benefit term is the period of time that the discount on your energy plan applies. In most cases, the benefit term will be just 12 months, although some providers offer discounts over two years. Simply Energy is one example in our NSW comparison. After the benefit period ends, your discount could disappear and you’ll be left paying the non-discount price for the electricity you use. As we’ve found with the comparison of prices above, there can be a big difference between non-discounted and discounted quarterly costs.
Other sign-up incentives
You should also take into consideration any additional sign-up incentives offered by the energy companies. These incentives should not dictate your decision, but they can be a useful point of difference if you’re comparing two similar providers. Incentives can include a rebate on your first bill when you sign up online, or a gift voucher for a particular retail store. Red Energy goes even further in terms of incentives, giving customers the opportunity to join its rewards program where they can earn special deals on things like cinema tickets or eating out. Meanwhile AGL customers can earn flybuys points for every dollar they spend on energy.
Questions you should ask:
To summarise, here are some questions you should ask any prospective energy provider before signing up:
- Are you offering me the plan with the lowest usage rates?
- How much are the supply charges and how do they compare to other plans?
- Is there a contract? How long is it? Are there any exit fees if I leave?
- What discount can I get off my bill and how do I quality for the discount?
- What is the benefit term of the discount? Will it disappear after a year?
- Can you offer me any additional sign-up incentives?
Even if you’re not switching, these are still good questions to ask your existing energy provider to make sure you’re currently getting the best deal possible.
For many households, the cost of energy will be the most important factor when signing up to a new plan. However, other considerations, particularly customer service, are also worth giving some thought. This is why Canstar Blue annually surveys electricity bill-payers across NSW to find out how they rate their provider based on a number of variables. In 2016, Red Energy was the highest rated provider in NSW for overall customer satisfaction.
Our survey found that households in NSW have been with their current electricity provider for an average of eight years, and fewer than half (42%) have switched in the last five years. Of those who have switched during the last five years, a significant 81% said they are pleased they made the move, while 77% report cheaper bills as a result. While our comparison looks at costs for customers of seven different providers, there are many more to pick from in NSW.
Switching electricity providers is clearly not a priority for every household – some are genuinely happy where they are, and that’s great – but if there is one message to take away from this report, it’s that regularly comparing plans is a good idea if you want to reduce the amount you pay for electricity. You might just find a good deal.