Australia’s consumer watchdog is once again prompting homes and businesses to shop around for a better deal on electricity, after recent energy price rises saw costs jump as much as 20% above default pricing – which could cost unsuspecting households a whopping $600 more each year.
The Australian Competition and Consumer Commission (ACCC) is sharing its concerns after multiple energy providers informed customers that their market offer plan pricing was set to rise above the default or standing offer in their state. While market offers have typically been positioned as a cheaper option for customers, post-July 1 rate changes mean these plans may actually be pricier than the regulated default offer available from their energy provider.
“We know that many Australians are likely paying more for electricity than they need to because their recently increased rates are higher than the safety net built into standing offer contracts,” ACCC Commissioner Anna Brakey said.
“We are seeing evidence of a significant reversal in the role of the safety net price, which was designed as a maximum price to protect disengaged consumers but is becoming a cheaper option for many people.”
Default offers vs. market offers: why the difference could cost you hundreds
Default or standing offer plans are government-regulated offers that are available to customers in New South Wales, south-east Queensland, Victoria and South Australia. These offers are called the Victorian Default Offer (VDO) in VIC, and the Default Market Offer (DMO) in all other states.
All energy providers sell a default plan, as well as plans called market offers. A market offer includes rates set by the provider itself, and in the past was generally much more competitive than the default offer – often including discounts, bill credits, or other sign-up incentives.
Market offers also list the annual price as a percentage difference when compared to the reference price of the DMO or VDO, making it easier for customers to compare products. Ideally, a market offer should be priced less than the default offer; however, recent analysis by the ACCC found that 10% of currently advertised market offers are actually more expensive.
According to the ACCC, the average household on a market offer that has risen to 21% above the reference price may be paying as much as $400 more each year, when compared to the default offer (assuming average energy consumption). The same household could reduce their bills by about $600 per year, simply by moving to a market offer that’s 10% below the reference price.
To give you an example of the market offers available across NSW, VIC, QLD and SA, we’ve compiled a selection of plans in the tables below. Note that alongside the estimated annual cost, each plan also lists how it compares to the reference price in that state.
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 3911kWh/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 4613kWh/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 4011kWh/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.
Is it time to switch energy plans?
The Australian Energy Regulator (AER) estimates around 90% of Australian homes are on market energy offers. Even if just 10% of currently advertised offers are more expensive than the reference price, that’s still thousands of households who could be paying far too much for their electricity.
While comparing all offers available in your area is the most comprehensive way to find a better energy plan, you may not actually need to switch energy retailers to cut your bills.
“You don’t necessarily need to change energy company to get a better deal: the simplest thing you can do is to contact your existing company and ask how your current plan compares to the regulated standing offer,” Ms Brakey said.
Of course, even if your current plan price is lower than the default offer, you still may be able to find something even cheaper by shopping around. There’s many incentives available for switching customers, such as bill credits. Selected plans may also feature energy discounts, including direct debit or pay-on-time discounts, which can lower your bills further.
You may also be eligible for energy concessions or rebates available in your state or territory. If you’re concerned about keeping up with rising energy cots, you can also contact your current provider to discuss hardship and financial assistance options, which retailers are required by law to make available.
Share this article