Why no-discount energy plans are trending in Victoria

Electricity plans WITHOUT discounts are now the most popular type of power plan in Victoria, according to the state’s energy regulator. But don’t worry, it could actually be a good thing!

The Victorian Essential Services Commission (ESC) stated in its annual Energy Market Report that these undiscounted deals made up 55 per cent of all market offers in the state on June 30, compared with 37 per cent the year before.

In contrast, market offers with conditional discounts only made up 25 per cent of deals on this same date, down 30 per cent on the previous year. The rest were plans with guaranteed discounts.

Since the introduction of the Victorian Default Offer (VDO) in July 2019, no-discount plans have grown in popularity. In September 2019, two in three market offers came without any discounts, whereas historically undiscounted market offers have only accounted for one in four market offers.

Canstar Blue Editor-in-Chief, Simon Downes, suggested the introduction of the VDO – and wider industry reforms – are responsible for the downfall of conditional discounts.

“The introduction of the VDO meant that for the first time, energy retailers had to be transparent about the true cost of their plans with and without conditional discounts applied,” he said.

“Now that customers can see when discounts are simply taken off inflated rates, it’s harder for energy retailers to use tricky marketing tactics that often confuse, and in some cases, mislead consumers.

“It makes sense that plans without discounts would grow in demand post the implementation of the default tariff, as they tend to be easier for the everyday Aussie to understand.”

In the Citipower distribution zone, which covers most of central Melburnians, the volume of no-discount market offers increased from 25 in 2018–19 to 59 in 2019–20.

The rest of Victoria also saw a jump in the average number of undiscounted market offers, with most zones seeing an increase of approximately 150%.

Average no discount plans ESC report

Source: ESC Victorian Energy Market Report 2019-20

Energy Deals in Victoria

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†. 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 and to see other products in our database that may be available. 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. The next three tabs feature products exclusively from AGL, EnergyAustralia and Origin.

Here are the AGL Energy plans on our database for Victoria. These are products from a referral partner†. 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 and to see other products in our database that may be available. 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 the EnergyAustralia plans on our database for Victoria. These are products from a referral partner†. 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 and to see other products in our database that may be available. 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 the Origin Energy plans on our database for Victoria. These are products from a referral partner†. These costs are based on the Citipower energy 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 and to see other products in our database that may be available. 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 no-discount energy plans good or bad?

Contrary to what you’ve learnt in the retail world, when an energy plan doesn’t have a discount, it can still be cheaper than its discounted counterpart.

In fact, according to the report, the cheapest offer in the Citipower, Jemena and Powercor distribution zones on June 30 was a no discount plan. This is based on the VDO usage assumptions, which suppose the average household uses 4,000kWh of power annually.

However, when set against the year prior, there was a one to four per cent increase in the median price of these no-discount deals in the Melbourne CBD and eastern Victoria, varying based on distribution zone.

In that same time period, there was a two per cent increase in the median annual bill of all market offers. But the median price going up doesn’t mean your bill has to as well, at least according to Mr. Downes.

He said: “Price competitiveness amongst energy providers is still rife in Victoria, meaning new, cheaper deals are popping up in market all the time. And most don’t have discounts.

“Don’t just accept that prices have gone up and end it there – take the time to compare your deal against others in market. It could save you hundreds of dollars a year.”

Image credit: Abdul Razak Latif/Shutterstock.com

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