Monthly electricity bills becoming more common

Shopping around for energy deals can cut household bills by hundreds of dollars — but there’s a payment catch many electricity retailers are now insisting on.

Electricity companies are demanding customers pay bills monthly to access their best deals.

And pay-on-time discounts have largely disappeared, with only about a third of retailers now offering them, a review has found.

The analysis of Victorian power prices from July revealed the cost of some firms’ market offers have been slashed by up to $820 a year.

But some others are as much as $290 more expensive.

Mandatory monthly electricity bills are becoming more common.

Across all retailers, the average annual “generally available” market offer for new customers or existing customers renewing contracts was $20 to $80 cheaper, depending on their location, in July than January.

The St Vincent de Paul Society research notes: “The majority of electricity retail market offers now make it conditional that customers are billed once a month compared to the traditional quarterly billing cycle …

Vinnies spokesman Gavin Dufty.

“While monthly billing means households receive smaller bills each time, traditional quarterly billing … can also allow customers to prioritise other expenses between utility bills. This may be particularly important for customers on low and/or fixed incomes.”

Vinnies spokesman Gavin Dufty said monthly billing suited retailers because “they get more money in their pocket quicker, and it reduces their exposure to debt”.

Consumers shopping around for deals now needed a “different mindset”.

“It used to be all about pay-on-time discounts but now people have to think do they want monthly billing, do they want to get bills online, are they into direct debit, are they comfortable locking in for a longer period of time?”

The research found typical-consumption households switching from the worst to best non-solar electricity market offer can save $450-$640 a year, depending where they live.

For gas, the difference between best and worst market offers is $340-$430.

The research analysed rates published on retailers’ websites from mid-July to mid-August.

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Most market offers were cheaper than the new Victorian Default Offer, a regulated power price introduced on July 1 for those who have never shopped around.

However, five retailers had market offers that produced bills equivalent to or higher than the VDO, Vinnies said.

The default offer replaced expensive “standing offers” that were considered the industry’s worst ripoffs. Electricity bills for previous standing offer customers shifted onto the new default deal had dropped an average 20 to 26 per cent, the report found.

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@KarenCollierHS