SA households spending nearly $1000 too much on electricity bills

HOUSEHOLDS are spending up to $950 too much per year on their electricity and gas bills and many could make huge savings by shopping around, a major review has found.

Kimberley Kutcher, with her daughter Amalia, has switched power companies to save money. Pic: Calum Robertson

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HOUSEHOLDS are spending up to $950 too much per year on their electricity and gas bills and many could make huge savings by shopping around, a major review has found.

The state’s utility price watchdog has delivered a report to Mineral Resources and Energy Minister Tom Koutsantonis that reveals wild differences between average bills depending on which companies households have signed up with.

The difference between the most expensive and cheapest average electricity bill was $694 per year, and households could pocket a $256 annual saving by making a shift in their gas supplier.

For small businesses, the cost difference was even wider.

They stand to save as much as $1412 on electricity and $1043 on gas by switching. The report found both households and business could stay with their retailer and save just by making sure they were on the cheapest deal.

For instance, M2 Energy customers could save $476 by moving from a standing to market offer. The report found market offers to typically be significantly cheaper than standing contracts.

However, customers on market offers are exposed to the risk that retailers could change the conditions at any time.

Standing contracts are typically only altered on an annual basis.

M2 Energy took the unenviable mantle of most expensive electricity retailer, slugging the average household on a standing contract $2185 for power use in the 2015-16 financial year.

The cheapest bills arrived from Simple Energy, which had a $1491 market offer.

The average household electricity bill was $1922, five per cent cheaper than the year before.

Average gas bills were $1168. EnergyAustralia had the most expensive standing offer of $1256 for the year. The cheapest market contract on offer was $1000 from AGL.

Essential Services Commission of SA chief executive Adam Wilson said the report was a snapshot of the offers available and showed customers should review their own retailers.

“Customers can save by shopping around for a better offer,” Mr Wilson said.

“Customers can either change their energy retailer or find a better offer with their current energy retailer.

He said the Australian Energy Regulator’s “energy made easy” online service was the best way for households to examine their potential savings from changing retailers or contracts.

Mr Koutsantonis, who has also asked ESCOSA to examine if looming price rises are justified, told The Advertiser that “substantial amounts of money” could be saved by shopping around.

“We now have Federal Energy Minister Josh Frydenberg and the independent regulator joining the State Government in recommending that customers seek better market offers,” he said.

Opposition energy spokesman Dan van Holst Pellekaan said failed State Government energy policies meant all business and household electricity bills were higher than they should be.

“Shopping around can save you money, there’s no doubt,” he said.

“But even if everybody got the very best deals available they would still be paying much more than people in other states.

“Over the last 10 years the Government has made a mess of our energy generation mix.

“That is why our electricity is so much more expensive. It has nothing to do with privatisation.”

Kimberley Kutcher, of Port Noarlunga South, says she has struggled to pay her electricity bills.

“Even if I can save a little bit of money it can go towards other bills,” Ms Kutcher said.

She was on a $50 a week AGL payment plan — about $2600 a year. In a bid to cut costs she joined a public campaign by the One Big Switch company this year to press for discounts from electricity companies.

Ms Kutcher switched providers to Click Energy after being promised a 12-15 per cent discount on her bills.

“In a few months time I’ll know whether it’s worth it,” she said.

“I’m very careful where my money goes and I have to budget each week, so if it’s not good I’ll be jumping up and down.”

- with Erin Jones