Electricity probably isn’t something you think about all too often, but it could be costing you money if you’re sticking with the same retailer out of convenience. Victoria has a deregulated energy market, meaning electricity providers are free to compete with each other by offering customers superior plans, prices and service. There’s a lot out there to choose from, so to help you out, here is a quick buying guide to get you started.
Residential energy providers in Victoria
Along with New South Wales, Victoria has the most competitive electricity market in Australia, with 20 different energy retailers to choose from at the time of writing. They are:
- Alinta Energy
- Click Energy
- Diamond Energy
- Dodo Power and Gas
- ERM Power
- GloBird Energy
- Lumo Energy
- Momentum Energy
- Neighbourhood Energy
- Origin Energy
- Pacific Hydro Retail
- People Energy
- Powershop Australia
- Red Energy
- Simply Energy
- Sumo Power
Energy discounts in Victoria
The great thing about having so many different energy providers to choose from is that you’ll find lots of big discounts on offer. Canstar Blue research shows that discounts of 30% or more off usage charges are common in Victoria, with such benefits becoming the main point of difference between retailers in the states.
There’s no doubt that energy discounts are extremely helpful in reducing overall costs, but there are a few things to be aware of before you get carried away by the headline figures. For example, failure to meet the conditions of your discount – which is likely to include paying your bill on time or by direct debit – will not only mean you lose the benefit, but you could also be charged a fee as well. Also, don’t lose sight of usage and supply charges because it’s common that the energy providers with the highest discounts will also carry the most expensive base prices, and if you lose your discount, these will be the prices you pay.
Understanding your bill
When we receive our energy bills, most of us will simply look at the total price and begrudgingly pay up, without giving much thought to how those costs were actually calculated. An electricity bill will be made of two main parts – a usage charge and a supply charge.
Supply charges: Supply/service charges are fixed rate daily fees for the connection of the property to the electricity grid. These charges vary dramatically across the states as they are generally reflective of network infrastructure and maintenance costs. Service charges are usually anywhere from 80c/day to $1.5/day.
Demand/usage charge: Usage charges apply for each kWh of electricity you use – so think of it as the actual cost of watching your TV in the evening or using the air conditioning. The amount you pay for electricity usage can vary depending on your tariff structure. Tariff structures take a number of forms, and depending on your choice, you may be paying multiple usage charges.
- Single rate: A single usage rate is charged regardless of the time of day you use power.
- Time of use tariff: Customers are charged different rates depending on the time of day they use electricity. The time blocks are peak, shoulder and off-peak. Off-peak has the cheapest rates and usually lasts from 11pm to 7am, while shoulder rates are a little more expensive and apply during mid-day hours. Peak rates are the most expensive, usually from 5pm to 9pm.
- Block rate: Customers are charged an initial rate for a certain allowance of energy usage (usually 1,250 kWh). If this is exceeded, a new, higher rate is charged.
- Controlled load: Items operating on a separate feed of electricity such as slab heaters and electric hot water systems are charged on a controlled load.
What’s the best energy provider?
The best energy provider for your needs will depend on your location, energy usage, preferred tariff structure and whether or not you have, or plan to install a solar system. Once you have all this information handy, it’s time to start comparing.
A great place to start when comparing energy providers is our customer satisfaction ratings for Victoria, which shows how leading retailers were rated by bill payers just like you. Changing electricity providers is a little daunting, but it’s actually a very simple process. So long as you are not in a fixed-term contract, you can simply call up your preferred retailer and let them know you want to make the switch. The new retailer will handle the rest and there will be no interruption to your energy supply. Good luck!