How to avoid energy bill shock

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Bill shock explained

Bill shock happens when a customer opens a bill that is unexpectedly high. Unfortunately, bill shock happens to those who least expect it.

Why am I experiencing electricity bill shock?

Here are some of the reasons why your electricity bill is so high:

• Your energy usage rates have increased: If you are on a variable rate energy plan, your energy provider may have increased your usage rates. Your usage rates may also change
• Your energy usage has increased: Energy usage fluctuates depending on the season. For example, your air conditioner usage might have increased during the summer, which could be a significant factor in your bill shock.
• You have an estimated electricity bill: If your meter is inaccessible, you will be charged an ‘estimated’ amount of usage. This could result in an unnecessarily large bill.
• Your plan’s benefit period has ended: If you initially signed up for an energy plan with a conditional discount, its benefit period may be over and you’re no longer receiving that discount.
• Your electricity rebate or concession ended: The Australian Government offers rebates and concessions to eligible customers. If eligibility changes or they expire, you may experience an increased bill.
• You still owe money from a previous bill: If you didn’t pay your last energy bill in full, this would show up as an outstanding amount rather than a new charge on your latest power bill.
• The reference price in your state has changed: Every July 1st, the reference price in each state changes. During this cutover, customers can experience price jumps on their subsequent bills.
• You’ve moved homes: If you have moved to a larger home, your energy bills will be higher. Another thing to consider is the possible change in the distributor network. Depending on your location, this could drive up your subsequent energy bill.

Why am I experiencing gas bill shock?

Here’s a handful of reasons why your gas bill has risen so much:

• Your gas usage increased: Similarly to electricity, seasons and household size can increase the amount of gas being used.
• You might have a gas leak: If a drastic uplift in gas usage between your latest and previous gas bills, you might have a gas leak.
• Estimated gas bill: As is the case with estimated electricity bills, properties with inaccessible gas meters will receive an estimated gas bill.
• A gas concession or rebate has ended: There is currently an annual gas rebate offered to eligible retail gas customers across various states in Australia. If their eligibility changes or they expire, the next bill will be higher than expected.

How to manage energy bill shock

The following tips can help you keep bill shock at bay:

Actively compare energy retailers, plans and discounts

If you haven’t switched providers in the past 12 months, your previous plan has most likely expired, with your provider rolling you over onto their standing offer plan.

With standing offers, you are paying the equivalent of the reference price in your state, which is typically the most a retailer will charge you for your energy usage.

You stand to save hundreds by switching to a market offer — an energy plan with terms and conditions set by the retailer. When researching market offers, always be on the lookout for  compelling features for extra savings, such as:

• Conditional discounts
• Guaranteed discounts
• Sign up for deals and bonuses
• Competitive usage and supply charges.

If you’d like to compare your current energy plan with some of the cheapest deals on the market, you can check out the Canstar Blue tool below:

Choose the right tariff for you

If you’ve recently experienced energy bill shock, your existing energy plan’s tariff may not be suited to how and when you use energy at home.

An energy tariff refers to how your energy usage is priced. The three most common types of tariffs are:

• Single rate tariff: A flat rate for every kilowatt hour (kWh) of electricity used, regardless of the time of day.
• Time of use tariff: A time-varying rate for every kWh of energy used.  During off-peak periods, electricity prices will be cheaper than in peak or shoulder periods. To be eligible for this tariff, you will need a smart meter installed.
• Controlled load tariff: A controlled load tariff meters energy-intensive appliances (e.g. pool pumps) separately from the rest of your home at a cheaper rate.

Choosing the right tariff will depend on the hours you use the most energy:

• If you consume more electricity during a peak period (e.g. night time), a single-rate tariff would be cheaper than a time of use tariff.
• Conversely, if you consume more electricity during off-peak periods (e.g. day daytime), a time of use tariff would end up cheaper than a single-rate tariff.
• A controlled load tariff may also help you save money by limiting the operating hours of high-energy consumption appliances to non-peak hours.

Bill smoothing

To reduce the likelihood of bill shock, you can consider opting for a bill smoothing option, where customers spread out estimated costs into smaller, regular payments (i.e., monthly as opposed to quarterly).

Most energy providers have the option for bill smoothing. That way, you can allocate funds away every month in anticipation of a recurring bill.

Consider rooftop solar

Installing rooftop solar can help shave dollars off your power bill in two different ways:

• Solar feed in tariff (FiT): A solar FiT rewards customers with a bill credit for every kWh of excess solar exported to the grid, helping you defray costs on your next power bill.
• Off-grid energy: Installing a solar panel system will give you access to off-grid energy during the day, instead of relying purely on costly grid energy. If you have a solar battery, excess solar energy can even be stored to supplement your nighttime use.

However, it is important to factor in the upfront costs of installing a solar system and its payback period (e.g. how long it would take for solar energy savings to exceed its installation costs).

Make your home more energy efficient

An energy-efficient home is a home futureproofed for long-term savings. You can help to make your home more energy efficient by making passive improvements, not limited to:

• Energy-efficient, LED lighting
• Focusing on adequate ventilation
• Door zoning to close off unused areas
• Ceiling fans to optimise temperatures and air conditioning.

For more information, feel free to visit our guide to making your home energy-efficient.

Manage your energy usage

To manage your energy usage, you must first understand your usage. If you have a smart meter, you can accurately monitor your energy usage habits by attaching an aftermarket electricity usage monitor to it or downloading your retailer’s energy application on your smart device (if any).

Your smart meter offers you real-time insight into your usage patterns, including the appliances that use the most power.

Once you have identified your energy-hungry appliances, you can start managing how you use energy, such as setting the air conditioner to a lower temperature and only running the dishwasher once a day.

If the energy-hungry culprits are older appliances, it may be worth considering replacing them with their modern, energy-saving counterparts.

Check if your meter is being read properly

Check the ‘meter read’ section under your latest bill. If your meter read type is ‘estimate’ (or denoted as ‘E’), it means that a meter reader sent by your distributor has failed to access your electricity or gas meter, possibly due to safety concerns or obstructions.

To make sure you’re billed for your actual usage, you may be able to conduct and submit your meter read either through your energy provider’s online portal or via a meter read card left in your mailbox by your previous meter reader.

Alternatively, you can organise a second visit from a meter reader by contacting your energy provider, provided you make sure that the original obstruction or hazard has been removed.

Fixing your bill shock with your energy provider

When experiencing bill shock, your energy provider can help with:

• Checking the accuracy of estimated bills and adjusting them if inaccurate.
• A special meter reading when you’re moving house and finalising your bill.
• Sending a meter reader to the property to double check the actual reading (though this may come with an extra cost).

Paying for energy bill shock

If you’re struggling to find the funds upfront, most energy providers will grant a short extension of a week or two.

If you need extra time to pay your energy bill, discuss payment plans with your provider. All energy companies have hardship policies that involve negotiating a payment schedule with customers based on what they can afford. This is usually only reserved for when customers regularly fail to pay their bills.

The most important step to take when experiencing energy bill shock is to speak with your energy provider and explain the financial difficulties you’re facing .

Failure to communicate can result in your overdue balance being passed onto a debt collection agency and your energy being cut off.

Avoiding bill shock

You can best avoid bill shock by maintaining awareness of energy price increases within the energy market, and changing your variable energy plan to the cheapest when possible.

Regularly comparing your current energy plan using the Canstar Blue tool will give you an idea of your energy usage and supply rates, as well as what you’ll be paying annually. Get started by entering your post code below.