Push to switch energy firms to stop bill shock
Electricity bills may have fallen this year but households are still worse off than they were a decade ago.
The Australian Competition and Consumer Commission (ACCC) has released the latest electricity markets report and revealed that bills were down by 4 per cent compared to the previous year.
Most Aussies were now paying $65 less with the average bill equalling $1509 but that was still 20 per cent higher than what they were paying in 2007-08.
"There is still work to be done to make electricity more affordable for households," ACCC Chair Rod Sims said.
According to the Finder Consumer Sentiment Tracker one in four Australians were stressed by the cost of their energy bill.
This makes it the second highest financial stress after rent and mortgages and 32 per cent of Australians have been shocked by a large bill over the past 18 months.
"While the drop in prices is a welcome reprieve for many households, electricity bills are still putting a lot of pressure on Aussie families."
"Christmas is an already expensive time of year, you don't need an exorbitant energy bill adding to your stress," said Finder's energy specialist Ben King.
Mr King said people needed to look at their energy consumption and reduce where possible but also look at other methods.
"While being more conscious of your electricity usage can help, the best way to save money is to consider switching your plan and provider."
"There's almost always a better deal out there so if you haven't switched recently it's time to jump online and look at the options available in your area."
NEW PROVIDERS THE ANSWER
The ACCC found the smaller retailers were the way to go for many Australias as they tended to have cheaper options.
The big three, AGL, EnergyAustralia and Origin often had more expensive options than their competitors said Mr Sims.
"Households can find an even better deal by shopping around and looking at the offers of some of the smaller retailers in the market," Mr Sims said.
Mr King agreed with Mr Sims and said many of the smaller players offered the best rates for households.
"Consumers should expand their search wider than the big three energy providers. The energy market is competitive in most of Australia and some of the smaller players are offering really reasonably priced plans," he said.
One such player is Amber, a start-up that is bringing electricity into the homes of Australians with a new method.
Using Amber, Australians are charged a flat fee and get access directly from the wholesale market.
"Traditional retailers sell electricity at a flat price, but they all buy electricity at the wholesale price, which changes every 30 minutes based on supply and demand - and is increasingly driven by the availability of renewables," said Amber's co-founder Chris Thompson
Amber charges a flat fee each month and then calculates usages costs based on what the actual wholesale price was at the time it was used.
"Because we charge a flat fee, our only incentive is to help our customers reduce their electricity costs.
"This creates a model of trust and partnership," Mr Thompson said.
Through its website, Amber offers users a look at what the retail price is in their neighbourhood so users can determine their savings.
Another online tool for users to find out how much they could save is the NSW government's Energy Switch tool which was built with data firm Accurassi to make it easier to find new offers and switch on the spot.
Accurassi founder Ross Sharman told news.com.au that the tool allowed customers to get an impartial view at the market to see where they could save.
"The whole premise is to make it easy for the consumer. Currently comparison sites don't give you enough of 'what you would save if you switch' as the only way to do that is to get a handle on your bill," Mr Sharma said.
RISE IN PRICES LINKED TO ENVIRONMENT
The ACCC blamed the rise of bills over the decade to environmental costs and said that the government needed to take further action on environmental schemes.
The Feed-in Tariff rebate for people that fed back solar power to the grid unfairly disadvantaged customers who couldn't afford panels said Mr Sims.
Australians with panels were able to save $550 a year on their bill but Mr Sims said given the fall in installation costs the rebate was no longer needed.
"Indeed, all customers who can, should consider how much they could save by installing solar panels."
"We are primarily concerned about the additional costs such schemes have imposed on households that cannot access or afford to install solar panels," Mr Sims said.
Instead he called on the government to fund green energy programs through their own coffers.
"Funding environmental schemes through government budgets rather than through increased electricity charges should also be considered as a more equitable option."
However, Mr Sims said that some government actions, such as retail pricing reforms, had already impacted households.
"Households on default plans in South Australia, NSW, southeast Queensland and Victoria are estimated to save between $152 and $455 in 2019-20, depending on their state and distribution zone," he said.
Mr Sims said new laws required retailers to compare their offers against a common benchmark to help consumers and households in South Australia, Queensland and NSW meant they could save up to $230 a year by switching from a default plan to median priced offer.
"We found that the median market offer is below the price of default plans in all distribution zones, meaning that customers on default plans could get a better deal by switching to a cheaper market offer."
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