Millions of people should be saving hundreds of dollars on power bills
The consumer watchdog has a cheery holiday message for households grappling with sky-high electricity bills – all it requires is a single phone call.
More than 2 million households are paying more than they need to on their electricity bills, and some could save as much as several hundred dollars a year, with new analysis revealing that customers could switch to cheaper deals with one phone call.
People who have been on the same energy plan for more than three years paid, on average, $221 a year more than those who updated their plan annually to ensure they were on the cheapest plan, the Australian Competition and Consumer Commission’s Electricity Market Inquiry report found.
Millions of customers are paying too much for the electricity, the ACCC says.Credit: Luis Enrique Ascui/The Age
The ACCC said nearly 2.5 million customers are paying prices at or above the default offer, which is a legal requirement for electricity retailers to provide plans that are capped by the independent market regulator.
Typically, customers are missing out on cheaper electricity plans because they have failed to opt in to access a default offer.
Also, if a customer has been on a non-default deal plan, perhaps chasing even cheaper prices, there is a strong likelihood that a retailer’s terms and conditions mean the contract can roll over to a higher rate after 12 months.
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ACCC commissioner Anna Brakey said these “loyalty penalties”, with annual contracts rolling over to higher rates, were rife in the electricity market.
“The very best thing people can do to save money is to switch plans – either moving to a cheaper plan offered by their existing retailer or changing retailers,” Brakey said.
In Victoria, the default offer is $1675 for financial year 2025-26 and $1965 in Sydney, while it costs more in regional areas of NSW.
Default offers for NSW and Victoria have risen about $250 since 2022, but prices vary across jurisdictions depending on a range of local factors such as the supply from energy generation plants and the cost of poles-and-wires networks.
The ACCC report revealed that 400,000 customers were paying more than 10 per cent above the default offer.