South Australians pay a huge price for power, regardless of their energy provider. But households in the state could take the pressure off by as much as $600 a year, simply by switching electricity contracts.
Canstar Blue research shows that customers of most electricity providers stand to save hundreds of dollar a year by moving from a standing offer electricity contract to a leading market offer, even with the same provider.
“There is understandably a perception that switching energy companies is a difficult and confusing thing to do, but these findings show that you don’t even need to switch to save a huge amount,” said Canstar Blue Editor Simon Downes. “If you’re on a standard contract, it’s just a case of calling your provider and asking to be moved onto their leading market offer.
“It’s crazy to think that some households in South Australia are spending huge amounts more than they need to on electricity simply because they are stuck on old, expensive standing offer contracts.
“The saddest thing is that these are likely to be elderly people or those who are simply not aware of the options available to them. If you’re not sure what type of contract you’re on, pick up the phone and talk to your provider. And make the call for your grandparents, too.”
The difference between standard and market contracts
Figures from the Australian Energy Regulator show that 15% of households in South Australia remain on standard contracts. A standing offer is an energy contract with its terms set out by law. These contracts are ongoing, have flexible billing options and provide a choice of payment methods. However, they do not provide any discounts to reduce costs.
Market contracts have prices set by the electricity retailers, have varying contract lengths and specific benefit periods for discounts. Market contracts are almost always cheaper than standard contracts, provided the conditions of the discounts are met. However, even some non-discounted market plans results in cheaper prices than standard offers from the same retailer.
The following table shows what customers with six different providers in South Australia could save by switching from their respective standing offer contract to their leading market offer. Costs are based on average energy consumption for five-person households in Adelaide and the market offer costs shown are after the conditional discounts have been applied.
|Electricity Retailer||Annual Standing Offer Cost||Annual Market Offer Cost||Difference|
Prices based on average energy consumption for five-person households on the SA Power Networks network. Market offers used are highest discounted plans from each provider.
Make sure you meet the conditions of your discount
As the table shows, huge savings are possible without even having to switch electricity providers. However, it’s important to understand that these savings are only possible if you stick to the specific conditions of your plan, such as paying bills on time, by direct debit, or for receiving bills via email instead of post. Failure to meet these conditions could mean you end up paying substantially more and also incur a fee. In some cases, customers who fail to meet the conditions of their market offer could end up paying even more than those on standard contracts.
“It’s often the case that the energy plans with the highest discounts also have the highest usage rates, which largely negates the overall savings customers can make. Therefore, if you don’t have confidence that you’ll be able to meet the terms of your market contract, look for the plans with the cheapest rates, rather than those with the highest discounts,” said Mr Downes.
“However, no one on standard contracts should be put off switching to a market offer. Just make sure you understand what you’re getting into first. Ask your retailer to clearly explain the conditions of their cheapest market plan, and if you’re happy you can meet the conditions, you will stand to save a huge amount.
“Unfortunately South Australians pay a huge price for electricity, which is why it’s so important to do everything you can to reduce costs. As we have found, many households could easily cut hundreds of dollars off their annual bills.”