The Australian Energy Market Commission secret to a cheaper deal on power

RESEARCH by the Australian Energy Market Commission shows how singles and families can save a packet on their electricity costs.

Read on for the secret to snaring a cheaper deal on electricity.

THE secrets to snaring a cheaper deal on electricity have been laid bare by the nation’s chief energy policy adviser, revealing big and small households need to seek out polar-opposite plans.

Research by the Australian Energy Market Commission shows singles can be better off by actually paying more for each kilowatt hour (kWh) of power they use — if the deal delivers a drastically reduced daily connection charge — because their consumption is low. This magnifies the impact of the daily connection charge. Separate analysis by Compare the Market finds it can be as much as half a low-consumption household’s bill.

For a family of four or more, chasing the cheapest connection charge would be a recipe for bigger bills. The AEMC work shows they can be vastly better off even by shouldering a higher daily connection fee — provided their plan features the lowest possible price per kWh used.

The AEMC says smaller households can cut the key budget-buster bills — the daily connection charge — by as much as 30 per cent in southeast Queensland, nearly 20 per cent in Victoria and more than 10 per cent in NSW. A couple could save $400 a year, it finds.

A light bulb moment ... finding the right plan can save you a bundle on electricity costs.

In some cases, offers delivering big connection charge reductions could have the double-benefit of cheaper tariffs for power used.

Families can cut their annual costs by as much as $569 or 31 per cent, the commission’s work shows, by focusing on finding a super-cheap consumption tariff. The competitiveness of the rate for energy use is so much more important than the daily connection charge that one savings case study sets out a substantial win even when the new plan has a daily connection charge that is 30 per cent higher.

Another opportunity the AEMC highlights is taking advantage of discounts offered for paying on time, or by direct debit. Its cameos put the savings for promptness at as much as 33 per cent.

The AEMC does not expect consumers to weigh up rival offers all by themselves. It says the more effective way to do it is using the official comparison service energymadeeasy.gov.au.

“To benefit from the market, people need good but simple information, as the price they pay will depend on how their household uses power and the supply plan or deal they are on,” said AEMC CEO Anne Pearson.

A recent survey of consumers by the AEMC showed people who used the site found the experience to be easier and more useful than they thought it would be.

65,000 households have made the switch

It’s easy to make the switch.

MORE than 65,000 households have now thrown their support behind the campaign for group-discounted electricity.

The Big Energy Switch, which was launched three weeks ago by News Corp Australia, aims to extract cheaper electricity using the combined buying might of as many backers as can be mustered.

The original target was 40,000.

The campaign is being run by consumer network One Big Switch. Its campaign director Joel Gibson yesterday said: “It’s not as easy as it should be to shop around for electricity. One in five campaign registrants we surveyed said they wanted to see a system like in the UK where retailers had to display the annual cost of a plan instead of just rates and discounts.

“That’s why 65,000 households have joined our campaign — it offers them an advantage in the search for a good plan,” Mr Gibson said.

“The main thing is not to get paralysed by the choice on offer, as 25 per cent of households do. The worst thing you can do about your power bill is to do nothing at all, because that ensures you will end up paying too much.”

Go to www.onebigswitch.com.au for more information.

There is no obligation to take up any offer. News Corp Australia and One Big Switch will earn a commission from any accepted deals. News Corp is a shareholder of One Big Switch.

Originally published as The Australian Energy Market Commission secret to a cheaper deal on power