The Australian Competition and Consumer Commission (ACCC) has recently released a media statement urging Australians to compare electricity plans, emphasising that the market offers now exceed the established safety net. This development underscores the significance of informed decision-making in selecting the right electricity plan and the changing landscape of the Australian electricity market.
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The electricity price safety net and market dynamics
The safety net, as introduced by the ACCC, serves as a reference point to evaluate the competitiveness of electricity offers in the market. It represents a threshold below which electricity prices are deemed excessive and anti-competitive. It sets a price cap for how much energy retailers can charge consumers on default plans known as standing offer contracts.
However, recent price increases in the range of 10 to 20 per cent above the safety net mean that many consumers are now paying more than they need for their electricity.
The ACCC’s analysis shows that 90% of currently advertised market offers are below the safety net. This means that many cheaper plans are available, but consumers must be aware of them to take advantage of them.
Switching to a cheaper electricity plan can save households and businesses hundreds of dollars each year. Therefore, The ACCC encourages consumers to take action and compare their plans today.
The ACCC urges consumers to contact their energy company and ask if a cheaper plan is available. They can also use a comparison website like Energy Matters to shop for the best deal. Learn more: ACCC Urges Consumers to Shop Around for Best Deal on Electricity.
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Quotes attributable to ACCC Commissioner Anna Brakey:
“You don’t necessarily need to change energy company to get a better deal: the simplest thing you can do is to contact your existing company and ask how your current plan compares to the regulated standing offer.”
“Moving to a cheaper plan through your existing energy company is the easiest way to save money right now, but there can be greater savings available for those who are willing to switch.”
“The case for switching to a different energy company is strong because the cheapest offers in the market appear to be reserved for new customers, rather than existing ones.”
Source: Australian Competition & Consumer Commission (ACCC) Media Release 10 August 2023
Benefits of comparing electricity plans
Comparing electricity plans has numerous advantages for consumers:
Cost savings: By evaluating different plans, consumers can identify the most cost-effective option based on their consumption patterns. This can lead to substantial savings on electricity bills.
Tailored solutions: The diversity of plans in the market enables consumers to choose plans that align with their preferences, whether maximising renewable energy usage or opting for off-peak rates.
Transparent pricing: Comparing plans allows consumers to understand the various pricing components, including supply charges, usage rates, and potential discounts. This transparency helps in avoiding hidden costs.
Environmental impact: With the growing emphasis on sustainability, consumers can choose plans that prioritise renewable energy sources, reducing their carbon footprint.
Incentives and rewards: Many providers offer incentives, such as discounts, rebates, or bonus offers. Comparing plans helps consumers identify such perks and take advantage of them.
Other things that consumers can do to save money on their electricity bills. These include:
- Using energy-efficient appliances and light bulbs.
- Unplugging appliances when they’re not in use.
- Turning down the thermostat in winter and up in summer.
- Washing clothes in cold water.
- Taking shorter showers.
Factors driving competitive offers
Several factors have contributed to the current state of the Australian electricity market:
Renewable energy integration: Australia’s commitment to sustainable energy has driven the integration of renewable sources, such as solar and wind power, into the electricity grid. This shift has introduced new players and increased competition, encouraging providers to offer more attractive deals to capture market share.
Technological advancements: Advances in energy storage technologies and smart metering systems have enabled greater efficiency and customisation of electricity plans. Consumers can now select plans that align with their consumption patterns, promoting fair pricing and reduced wastage.
Market deregulation: The deregulation of the electricity market has facilitated the entry of multiple retailers, intensifying competition. This deregulation has empowered consumers to choose from a wider range of options, resulting in innovative pricing structures and plans.
Consumer empowerment: The ACCC’s efforts to enhance consumer awareness have spurred active participation. Australians are now more informed about their energy consumption and the available plans, allowing them to make educated decisions that suit their needs.
Some tips for comparing electricity plans
- Be sure to compare apples to apples. Not all plans are created equal, so comparing the same things across different plans is important. This includes things like the daily supply charge, the standing charge, the usage charge, and any discounts or promotions.
- Consider your usage patterns. The best plan for you will depend on how much electricity you use and when you use it. You’ll need a lower peak demand charge plan if you have high usage during peak times.
- Read the fine print. Don’t just look at the headline price of a plan. Be sure to read the fine print to understand all the fees and charges that may apply.
- Don’t be afraid to switch. If you find a cheaper plan, don’t be afraid to switch to it. Switching electricity plans is usually a quick and easy process.
How do I switch energy providers?
- Compare energy plans. Australia has many energy providers, so comparing plans before switching is important. You can use a comparison website like Energy Made Easy or Victorian Energy Compare to compare plans in your area.
- Choose a plan that’s right for you. When you’re comparing plans, pay attention to the following factors:
- The price per kilowatt-hour (kWh)
- Any fixed or variable charges
- Any discounts or promotions
- The contract length
- Contact the new energy provider. Once you’ve chosen a plan, contact the new energy provider to initiate the switch. They will need some basic information from you, such as your account number and meter readings.
- Wait for the switch to take effect. The switch usually takes a few days to complete. Your old energy provider will still bill you during this time.
- Receive your welcome pack from the new energy provider. Once the switch is complete, you will receive a welcome pack from your new energy provider. This will include information about your new plan and how to contact them if you have any questions.
How to choose the best energy plan for you
The Australian energy market is deregulated, which means that many different energy providers offer various plans. This can make it difficult to choose the best plan for your needs. Here are a few things to consider when choosing an energy plan:
- Your energy usage: The amount of energy you use will affect the price of your plan. If you have a high energy usage, you must choose a plan with a higher price per unit of energy.
- Your budget: How much will you spend on your monthly energy bill? There are plans available to fit all budgets.
- Your needs: Do you need a plan with a fixed price or a variable price? Do you want a plan with green energy options?
- Your contract length: Do you want to be locked into a long-term contract? Or would you prefer the flexibility to switch plans at any time?
Call to action
The call to action from the ACCC for Australians to compare electricity plans reflects the evolving landscape of the Australian electricity market. With offers exceeding the safety net, consumers can save money, support renewable energy, and make environmentally conscious choices. By understanding their consumption patterns, researching providers, and utilising available comparison tools, Australians can harness the benefits of a competitive electricity market and secure plans that align with their needs and values.
Read more about saving money and comparing electricity
- How to Compare Electricity Plans in Melbourne and Victoria
- How to Compare Electricity Providers in Brisbane and Queensland
- Energy Efficiency Tips – Saving On Electricity Bills
- 12 Easy Ways To Save Money on Your Energy Bills
- Simple Ways to Save Energy and Money in Your Business
- 10 Tips To Reduce Your Live Electricity Usage In Australia
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