Energy retailers including EnergyAustralia and Origin dump pay-on-time discounts

Big power companies are dumping pay-on-time discounts but the change could be a good thing for customers.

Exclusive: Big power companies are dumping pay-on-time discounts in a bid to make it easier for customers to spot a better deal.

The overhaul — to begin Sunday — is expected to shed hundreds of dollars off bills.

It spells the end of big headline-grabbing discounts which lure customers in only for them to find it applies to just one portion of their bill.

The new discounts, while lower, will be across both supply and usage charges.

EnergyAustralia and Origin — the nation’s two biggest power retailers — are spearheading the changes with more companies likely to follow.

Canstar Blue spokesman Simon Downes said the change meant customers would now get a genuine indication of a plan’s value for money.

“People may see smaller discounts and think they are bad deals,’’ he said.

“But they are going to be smaller discounts and the value will be equal or better to what is was previously.”

Many energy customers will see changes to the discounts offered on their bills.

EnergyAustralia head of customer Mark Collette said buying electricity had become too confusing for everyday Aussies.

Some of its customers will save about $190 a year.

“The discounts will now be off the whole bill instead of having high discounts that look big and are only applicable to a portion of the bill,’’ Mr Collette said.

Origin head of retail Jon Briskin said: “We want to make things simpler for our customers.”

“By removing pay-on-time discounts Origin customers can be confident they are getting a great deal with no catches,’’ he said.

Under significant changes to the energy sector to start tomorrow retailers will have to advertise how their plan pricing compares to the “reference price.”

This change applies in NSW, Qld, SA and Victoria.

In Victoria the reference price is known as the Victorian default offer.

The revamp means in some cases pay-on-time discounts of 25 per cent off some charges will be replaced with a 7 per cent discount off all of them.

Under significant changes to the energy sector retailers will have to advertise how their plan pricing compares to the “reference price”.

This change applies in NSW, Qld, SA and Victoria.

The Australian Energy Market Commission’s latest competition report show energy customers increasingly ready to ditch their provider for a better deal.

One in four switched in the past year.

@sophieelsworth

Originally published as Energy retailers including EnergyAustralia and Origin dump pay-on-time discounts