Choosing a better provider could save you $100 to $200 a year
Why you should shop around:
In many parts of Australia, private companies compete to provide the retail part of your gas/electricity supply:
- Even though your electricity and gas can come from the same generator or gas field and go through the same distribution network, there can be a large price difference between different retailers.
- Whoever supplies your energy will probably buy it from the same supply lines that all the other retailers in your area buy it from and yet they can still charge a higher price.
- In Victoria in 2015, you could have ended up with a gas or electricity bill that was 20% higher than your neighbours just because your retailer decided to charge you more .
- As of 2015, up to 45% of the cost in energy bills in Victoria was just the retail cost which had tripled in a short time whilst across Australia in 2018 that cost was 30% or more .
- We have found that the difference between the best and worst electricity and gas rates is $100-$200 a year depending on your usage.
How to find a better energy provider:
- Avoid using for profit sites unless they are extremely reputable as they can try to limit your choices to retailers that they are affiliated with.
- In Victoria, there is https://compare.energy.vic.gov.au which allows you to enter the details of what appliances you have and the basic details of your last gas or electricity bill.
- Use https://www.energymadeeasy.gov.au/ if you live in another Australian state.
- Both sites will give you a list of retailers from the best to the worst price based on what you have entered.
When making comparisons, here’s a few things to be aware of:
- The most important things you are looking for are the daily supply charge and the cost per kWh or MJ.
- Some providers will charge a flat rate while others may charge a lower rate for any energy use below a certain amount per month.
- The quoted price per year may be lower than your daily supply charge and estimated energy usage put together because some retailers offer pay on time discounts.
- Be aware that some retailers may offer a good deal that is only available for the first 12 months to lure you in and then they may automatically switch you to a more expensive plan.
- Check if the deal involves a lock in contract for say 1 or 2 years. There are plenty of options for people who want a month to month contract, in fact some of these plans are very competitive price wise.
- If you see a super cheap plan, there may be a catch. In our recent search, there was a plan that came up as half the price of everything else but you have to buy a set amount of power each month which would be more expensive for us.
- Choosing 100% renewable electricity through the government GreenPower scheme adds $0.05 to $0.08 a kWh to your electricity bill if you want to support renewable energy.
- If you find a cheaper energy plan, use the comparison site to check if you have to pay any disconnection or reconnection fees as this could affect the savings that you accrue from switching retailers.
- If you switch retailers, contact the new retailer to start a new energy plan and then it is their job to arrange the transition with your existing retailer.
- You probably wouldn’t do this exercise every month, but it can be valuable to compare providers every two years.
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It might take an hour or two of your time and is certainly not the only way to slash your energy bills, but if it saves you $100 to $200 a year, then doing a price comparison with your energy retailer is definitely worth the effort.
Further Reading: In our home state of Victoria, the energy market has been deregulated for some time as is the case in the rest of Australia bar Western Australia for energy customers using less than 50MWh a year:
https://www.canstarblue.com.au/electricity/deregulation-explained/ https://www.smh.com.au/business/energy-companies-gouging-households-because-they-can-20151009-gk586i.html  https://www.abc.net.au/news/2019-03-25/energy-companies-gouge-customers-hazelwood-electricity-bill/10910948  At present, 20 providers offer a GreenPower option ranging from 10% to 100%. Our 100% GreenPower plan through Powershop costs us $50 a year more than the average electricity plan that we can find in Victoria and is still cheaper than some non GreenPower plans available. Plus we only spend $700 a year on home energy even on a 100% GreenPower plan: