Australians are facing significant cost of living challenges, so news of a hostile energy market doesn’t offer much comfort for bill-payers already shivering through winter.
In the past year, skyrocketing wholesale costs have placed immense pressure on power companies, with higher prices expected to continue trickling down to households over the coming months.
The situation is so extreme that a growing number of energy providers have recently suspended their plans from sale or announced steep price hikes for existing customers.
In fact, Kiwi-owned ReAmped Energy told its 70,000-plus customers last week to switch now or face major bill increases.
This is in addition to Queensland-based retailer Locality Planning Energy (LPE) plastering a warning on its website that rates are expected to balloon by at least 150 per cent from mid-June.
Stoking fears of impending bill shock, LPE stated:
“We really want to avoid hurting our valued customers with such a substantial and unavoidable price increase and ask you to urgently seek an alternative supplier.”
It isn’t an exaggeration to say that Australia could be on the brink of an energy crisis, particularly as the retail market shrinks, Canstar Blue’s Energy Editor, Jared Mullane, said.
“Australian energy consumers have been blindsided by price rises, forcing many to look elsewhere in search of a better deal,” he said.
“The current situation has also left Aussies with fewer options to choose from, however there are still good deals available if you know where to look. Switching online only takes a few minutes and it could be costly the longer bill-payers wait.”
Compare Electricity Deals
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.
Should you switch now or wait until July 1?
Energy providers reset prices on July 1 to align with new pricing on default or regulated electricity contracts. This is known as the Default Market Offer (DMO) in New South Wales, south-east Queensland, South Australia and the ACT, while in Victoria, it’s the Victorian Default Offer (VDO). These default plans act as a reference price for consumers to compare deals from, while also safeguarding customers who don’t engage in the market.
Mr Mullane warned DMO and VDO prices will be hit with sharp increases from July 1, meaning it may pay to switch now before retailers adjust the rates on their competitive market offer plans.
“The default price for power is going up which usually flows through to prices on market offers – plans that generally have cheaper rates or include perks like discounts and bill credits,” he said.
“Now could be the time to consider switching to an energy provider that is offering some other form of incentive, on top of competitive rates. This could be as simple as a credit off your first bill or being part of a provider’s rewards program that offers exclusive discounts on shopping or travel.”
Looking to squeeze more value out of your energy provider? Check out these guides below:
Is an energy plan with fixed rates a safer option right now?
Another option for consumers to think about is locking in their electricity rates. A fixed rate energy plan can provide households with a degree of comfort knowing their usage and supply rates won’t change during the benefit period, usually 12 months. As wholesale prices continue to fuel market volatility, it is likely that customers on energy plans with variable rates will see their prices rise.
Below is a graph showing how high wholesale electricity prices have risen since June last year.
Source: ReAmped Energy, 31 May 2022
Can you save money with a larger energy provider?
While the market has shrunk in terms of competition recently, it’s still business as usual for the Tier 1 retailers, otherwise known as the ‘big three’. AGL, EnergyAustralia and Origin are the nation’s biggest energy providers and are often perceived as a ‘safe pair of hands’ by consumers.
Mr Mullane explained that Tier 1 retailers also have their own electricity generational assets, including coal plants and solar farms, which could place them in a better position to offset some of the higher wholesale costs.
“Not only can Aussies get a good deal with AGL, EnergyAustralia or Origin, but they may find comfort in knowing a larger company has longer call centre hours or offers a wider range of online services,” Mr Mullane said. “While these are all factors to consider when choosing a new energy retailer, don’t forget that the bigger guys in market may still need to pass on price increases, but are usually much better hedged than the smaller retailers.”
Larger energy providers worth looking at right now:
What happens if my energy provider goes out of business?
There is a common misconception that the lights will go out if an energy provider goes belly up. This is not the case as there are regulations in place to protect consumers in situations where a power company goes out of business. This is known as ‘The Retailer of Last Resort (RoLR)’.
The designated Retailer of Last Resort will usually see customers switched over to one of the big three – AGL, EnergyAustralia or Origin. Exactly which provider is determined by the distribution network a customer lives on. If a bill-payer is transferred to a RoLR, the new provider will be in contact to arrange contract details. If a customer is not happy with their Retailer of Last Resort or the plan they’ve been moved onto, they are still able to switch providers.
Image credit: Fantastic Studio/Shutterstock.com
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