How the government could slash your power bill by up to $750

And 4 other things we learned from the ACCC report on energy in Australia

Australian energy bills are at an all-time high and they’ve become the number one political issue in the country.

This week, a new 400-page report from consumer watchdog the Australian Competition and Consumer Commission has recommended 56 changes to the Australian energy market that they say could save Aussie homes up to $750 on their annual bill.

We’ve boiled it down to 5 things you need to know.

1. Loyalty doesn’t pay

Switchers benefit most from the current energy market, rather than those who stay loyal to a provider, the ACCC says.

“Those customers who have been active in the market, regularly reviewing options and switching between offers, have been the beneficiaries of competition.”

The flip-side? If you don’t shop around, you end up paying the “loyalty tax”, which can add up to over $1000 a year in extreme cases.

9Saver Tip: Shop around using the new Energy Special Offers for subscribers at this link

2. It’s too hard to compare Energy offers, but that could change

You’re not alone if you find it hard to compare all those rates and discounts and work out which offer is cheapest. The ACCC agrees.

There is currently no simple way to compare the pricing of different offers, but that could change with the watchdog proposing a new ‘default offer’.

That ‘default offer’ would be priced in the middle of all offers somewhere, and cheap offers could then be compared to that benchmark and advertised as being ‘$500 cheaper than the default offer’, for example.

3. In the meantime, you need to look at both the discount AND the rates

Even if the government enacts all the ACCC’s recommendations, it will take months not weeks, so in the meantime you need to keep looking at both rates and discounts when comparing.

At 9Saver, before we select any special offer for our 75,000+ members, we undertake a detailed analysis of the combined effect of the discounts and the underlying rates to ensure the offers are highly competitive for on-time payers.

9Saver also has a policy for all Energy offers selected for our members to be expressed as a headline discount off the retailer’s standing offer rates. This has since become an industry-wide rule.

4. ‘Pay-on-time’ discounts could become a thing of the past

These are great if you’re an on-time payer and they can be as high as 30% or even 40% in some cases, but they can act as a penalty for late payers who miss out on the discount and end up paying the full amount.

The ACCC doesn’t like them, so these types of discounts could become rare or even extinct – if governments agree.

5. Reforms could save households $500 to $750 per annum

If governments follow through and accept all the ACCC’s recommendations, the watchdog claims they could save us $500 to $750 per annum (25-35 per cent) per household.

“Similarly, small and medium businesses could save $1450-$2250 (30-35 per cent) per year by moving to a standard ‘default’ offer. Currently over 20 per cent of small businesses are on high ‘standing’ offers.”

Estimated electricity bill savings

Vic NSW SE Qld SA Tas
Average residential customer $290

20%

$410

24%

$420

25%

$370

21%

$415

21%

Average residential standing offer customer $500

30%

$550

30%

$500

25%

$750

35%

*
Average SME customer $600

20%

$1050

25%

$950

25%

$800

20%

*
Average SME standing offer customer $2000

35%

$2250

35%

$1450

30%

$1500

30%

*

* As electricity prices are regulated in Tasmania there is no distinction for standing offer customers. Equivalent SME data to other states was not available for this analysis.

Source: ACCC

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.

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