You’ve probably heard in the news energy plans have recently changed. If you’re anything like most Aussies, you might be feeling confused about what this means for you and your household budget.
Since July 1 this year, quite a bit has changed in the energy landscape which will have a direct impact on energy prices and products. With all of these changes, it may seem easier to bury your head in the sand and continue paying the ‘lazy tax’ on your energy bills. However, it’s more important than ever to review your energy plan to make sure you’re still getting a great deal on your energy.
So what exactly has changed when it comes to your energy bills?
The introduction of the Reference Price
On 1 July 2019, the Reference Price was introduced in NSW, South Australia and South-East Queensland (or Victorian Default Offer if you’re in Victoria)1. The Reference Price capped higher-priced standing offers that around 10% of customers were previously on, although the percentage differs from state to state.
If you had been with the same plan or provider for more than a few years, then you were most likely on a standing offer and automatically capped by the new reference price after July 1.
This is great news for most of those 10% of customers who were on standing offers because it means they can expect savings of up to $450 off their energy bills a year depending on where they live. But what about the rest of us who weren’t on standing offers prior to July 1?
Don’t default to the Reference Price
Unfortunately, the majority of Aussies won’t see an automatic deduction in their energy bills because most are likely already on discounted market offers. It is, however, important not to simply default to the Reference Price and assume that this will save you money as the Reference Prices will often be more expensive than market offers2.
If you want a better deal on your energy, you’ll need to be prepared to shop around to make sure you aren’t paying more than you need. Thankfully, from July 1, shopping around is going to be a little easier. That’s because the new Reference Price will also be a ‘benchmark’ against which all discounted offers will be compared and help you to understand which plans provide better value.
If you’re still confused about whether you’re paying too much for your energy deal, stress less if you’re a Victorian resident because energy retailers are now required to notify you if they have a better priced plan than your current plan with them on offer.
Cya later confusing discounts!
Ever signed up to an energy plan because it had an attractive discount only to be whacked with a larger than expected bill? You’re not alone. Luckily, another positive change from 1 July is a reduction in confusing discounts3.
Traditionally, energy retailers have offered huge discounts but often the discount was just off your usage and not supply charges which can be a significant portion of your bill. Until now, many of these discounts have often been conditional4, meaning you need to meet certain criteria such as paying on time to actually get your discount.
So if you’re someone who perhaps pays your bills late, you can now rejoice! We’re starting to see more energy retailers offer discounts off both usage and supply charges5 and replace large conditional discounts with lower ongoing rates. For many Aussies, these are likely to offer better value in the long-term.
Don’t pay the lazy tax
If you’re sitting back thinking, ‘I’m already on a great deal, I don’t need to worry about this’ then that’s great! However, just remember most energy discounts also expire after a year or two, after which time you may be rolled over onto a higher-priced plan.
Retailers are now required to notify you when your current discount period expires and this should be your prompt to compare energy plans. But too often we’re way too busy with life to find the time to sit down and compare plans so we end up paying more than we need to or the ‘lazy tax’.
An energy comparison service like iSelect can do the hard work for you though. In a short call they can compare your options from their range of plans and providers and if they can find you a better deal, they can sign you up all in one simple phone call.
Don’t let the new changes to energy plans go unnoticed in your household. Get on the front foot today and make sure you’re still getting a great energy deal!
iSelect does not compare all energy providers or plans in the market. The availability of plans may change from time to time. Not all plans available from iSelect providers are compared by iSelect and due to commercial arrangements, area or availability, not all plans compared by iSelect will be available to all customers. Some plans and special offers are available only from iSelect’s contact centre or website. Energy plans are available only for properties located in eligible areas of Victoria, New South Wales, South East Queensland, South Australia and ACT. Click here to view iSelect’s range of providers.
4 Source: An internal analysis of iSelect energy providers and plans on the energy panel as of 7th August 2019 found that the number of conditional discounts offered by retailers had fallen since 30 June 2019.
5 Source: An internal analysis of iSelect energy providers and plans on the energy panel on 7th August 2019 found the number of energy plans on the iSelect panel now discounting both usage and supply has increased since 30 June 2019.