Fixed Rate Energy Plans Explained

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Power prices only seem to go one way, so whatever you can do to keep costs under control is surely worth considering. Many Australian energy providers offer headline-grabbing discounts, but discounts are only helpful in bringing costs down if you’re getting money off a competitive price in the first place. You’ll naturally be attracted to a deal promising 10% or more off your bills, but if you’re paying a higher base rate, will you really be any better off? It’s no wonder consumers often find energy plans overly-complicated and confusing.

However, out of the haze in recent years has emerged a different type of energy plan, allowing customers to easily compare offers from different providers, while also giving them a bit more certainty over costs. We’re talking about fixed rate (or fixed price) energy plans.

What are fixed rate energy plans?

Fixed rate energy plans are contracts that lock-in a set price to be paid for electricity or gas usage and supply for the duration of the term, usually one or two years. The energy companies tend to review their prices every 12 months (i.e. increase them) and fixed rate products allow customers to effectively ‘beat’ the price hikes by locking in the rate they are charged.

This means that the cents per kilowatt-hour rate you pay for electricity or gas will remain unchanged for the one or two years. In most cases, your daily supply charges (what you pay just to be connected to the energy network) will also be locked in.

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Fixed Rate Energy Plans

Now we know what fixed rate energy plans are and how they work, who actually offers them? The tables below show the current fixed rate published offers available from the providers on our database. We use a specific postcode in each state to calculate these estimated annual costs, so use our comparison tool above for specific pricing in your area. We show one product per provider, listed in order of price.

Fixed rate energy plans in VIC

Here are some fixed rate energy plans on our database for Victoria. This table includes 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. 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.

Fixed rate energy plans in NSW

Here are some fixed rate energy plans on our database for New South Wales. This table includes 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. 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.

Fixed rate energy plans in QLD

Here are some fixed rate energy plans on our database for South East Queensland. This table includes 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. 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.

Fixed rate energy plans in SA

Here are some fixed rate energy plans on our database for South Australia. This table includes 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. 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 fixed rate plans different to fixed cost plans?

Yes, very much so. While fixed rate energy plans give customers certainty over the price they will be charged for power, they do not provide any certainty over actual costs. No household uses the exact same amount of electricity or gas every month, so the amount you need to pay will continue to vary from one billing period to the next. Fixed cost energy plans, on the other hand, provide households with a specific price to be paid every billing period, regardless of how much electricity or gas they actually use. So you can either lock-in a price, or a cost.

Who offers fixed rate and fixed cost plans?

A handful of electricity providers offer fixed rate plans, including AGL, Origin and EnergyAustralia. In most cases, these deals will be offered across all states the retailer serves. Smaller retailers like Tango Energy, Sumo and Powerdirect also offer fixed rate plans in Victoria.

Fixed cost plans are a little different. While Origin has offered a fixed cost plan in the shape of Predictable Plan for some time, a handful of other retailers now offer prepaid power deals which are effectively the same thing, but with one crucial difference. In the case of prepaid power plans, retailers like Powershop, Amaysim and Elysian Energy allow customers to pre-purchase a specific amount of electricity to use each billing period (which means you know how much you are paying from one month to the next), but unlike Predictable Plan from Origin, if you go over the agree prepaid amount, you will be charged extra for your remaining usage.

What are the pros and cons of fixed rate energy plans?

Every energy plan comes with its advantages and disadvantages. Ultimately, you still need to pay for the electricity and gas you use – there’s no getting away from that. So what are the pros and cons of fixed rate energy plans?

Pros

  • While most energy plans come with variable rates (which can change at the retailer’s discretion), fixed rate plans mean you lock-in charges for a set period, avoiding any price increases.
  • Fixed rate plans are simple and easy to understand – you are given set charges for energy usage and supply, nothing more and nothing less. This makes them easy to compare because you simply need to assess the published rates of each provider in your area.

Cons

  • Much like fixing a home loan for a number of years, locking in energy charges could mean you pay a higher rate for power than you would on a variable rate plan.
  • While you may receive a sign-up credit on your first bill, fixed rate plans do not offer any additional discounts.
  • As two-year contracts, some fixed rate energy plans come with exit fees, meaning that leaving for a better offer will cost you.

With the introduction of fixed cost energy plans, it will be interesting to see whether fixed rate plans become more or less popular. If you’re trying to find the best deal on your electricity or gas, the best thing you can do is compare both types of offers and see which works out cheaper.

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