Retailer offers bigger discounts for pre-paid Electricity

You can now pre-pay for your power just like you can for your mobile plan – and sometimes get bigger discounts for doing so.

After watching his electricity bill increase month after month, Tom Whitford decided to switch to pre-paid power.

“You buy electricity ahead of time – and in doing so, you avoid bill shock,” he says.

It’s similar to buying credit for a mobile phone. The 28-year-old now purchases his energy in bundles.

“That will give me an end date when that credit, or when that electricity is valid for. Of course, if I use less and less electricity – that date will change.”

Powershop offers the chance to pre-pay. CEO Ed McManus says, “if you choose to buy in advance you get a slightly better rate.”

And an app allows consumers to keep a close eye on their usage.

Says McManus: “With smart meters we can provide our customers with information on how much electricity they’re using every half hour and how much that’s costing.”

Simon Downes from Canstar Blue says “we’re seeing them do something different to the standard energy retail that we’ve all known and been used to for many many years.”

3 ways to save on power bills:

A Canstar Blue survey of two thousand Victorian bill-payers resulted in a five star satisfaction rating for Powershop, while 63% of all respondents said they believe they’re getting a good deal on their power.

“The key to getting the best possible energy deal is understanding your usage,” says Downes.

Canstar Blue says a number of retailers are looking at new ways for customers to track their electricity consumption – but the experts warn, this new approach to power isn’t a good fit for everyone.

“If you’re not the type of customer who likes to go online, regularly purchase the special offers then Powershop is probably not right for you.”

Comparing deals takes only a few minutes, but it doesn’t necessarily mean you have to make a switch. Arm yourself with the information to negotiate a cheaper deal with your existing energy provider if you prefer.

As always, it pays to read the fine print – some deals will lock you in to a multi-year contract.

* 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.