The Australian Competition & Consumer Commission (ACCC) has urged energy consumers to shop around for cheaper electricity plans.
Or, at the very least, contact their electricity provider to ask if a lower-cost plan is available.The ACCC’s latest electricity inquiry discovered that more than 80 per cent of Australian households in the National Electricity Network (NEM) could move to a cheaper electricity plan. The consumer watchdog’s press release opened with the headline: No reward for being loyal. In their report, the ACCC noted that while retail electricity prices fell in 2024, many are not benefiting. To make matters worse, plenty of households remain on offers priced above the government safety net price.
“If you haven’t changed electricity plans in the past 12 months, chances are you are paying more for your electricity than you need to,” ACCC Commissioner Anna Brakey said.
The longer you stay, the more you pay.
The ACCC analysed the prices paid by consumers by examining three years of flat-rate offer prices. It also found that the size of the ‘loyalty penalty’ increases with the age of the offer. The report uncovered that households on offers over a year old are paying $238 more per year than households on newer offers. Those who signed up earlier were likely to pay even more. In fact, almost all customers in the ACCCs dataset on flat rate offers priced more than 25% above the default offers are on older offers (2+ years).
The good and bad news
Overall, electricity prices are down, thanks to government energy rebates, compared to last year. But not everyone is getting the benefit.
“While we are pleased that annual prices have decreased from 2023 to 2024 and more consumers are on offers below the government safety net price, a substantial proportion of households remain on prices above these levels,” Ms Brakey said.
Proportion of residential flat rate tariff customers paying more, equal to, or less than the government safety net price (DMO/VDO)
Check your bill.
Ms Brakey said. “…it is important to read your electricity bill when it comes. Electricity companies must tell you on your bill every three to four months if a cheaper plan is available. If you get this message, you are paying more than you need to.”
From 1 January 2024 to 10 August 2024, less than 20% of customers received messages confirming they were on the retailer’s best offer. The other 80% were advised that they could save by switching plans to a cheaper offer. But it seems that bill messaging isn’t being translated into action.
Tariffs matter
The ACCC report found that time-of-use offers have lower calculated annual prices on average than flat-rate offers. However, customers on demand tariffs had higher calculated annual prices. As a result, 51 per cent of demand tariff customers examined were on offers priced at or above the government safety net price. Be aware that customer with demand tariffs are not subject to the protections of the default market offer. So it’s a good idea to consider changing tariff to something simpler.
“The increasing complexity in pricing as the smart meter rollout continues presents a real challenge to consumers who are trying to reduce their electricity bills,” Ms Brakey said
Compare annually or when prices change.
Households should review their energy plans at least annually – and certainly when their plan price changes. By understanding current market offers, households can determine if their current retailer is still offering fair value. You can start your comprehensive comparison here with WATTever to ensure you are well-informed about the latest electricity offers and how they stack up for you.