Power bills cut for consumers as energy companies remove ‘loyalty tax’

Thousands of Victorian households will see their power bills drop by up to $560 per year from today as energy companies finally pass on their savings to loyal customers. This is why.

Victorians are set to have hundreds of dollars shaved off their power bill. Picture: iStock

Thousands of Victorian households will see their power bills drop by up to $560 a year from today as energy companies finally pass on their savings to loyal customers.

Major energy companies including Origin, Energy Australia and AGL have all removed their “loyalty tax” — which punished customers who stuck with the one retailer — following pressure from the Morrison Government.

Families and small businesses on “standing offers” will today get an automatic discount of up to 15 per cent off their electricity bill.

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Customers have long been complaining about the difficulty of working out the cheapest energy plan.

The average Victorian customer on a standing offer with AGL will get a $240 discount, Origin customers $360, Red $200, Lumo $250 and Alinta $560.

Energy Australia customers with concession cards — such as aged and disability pensions — will get an average annual discount of $270, but the company has yet to drop its standing offers for all Victorian customers.

Energy retailers have come under pressure from the Federal Government for its use of standing offers, which have been some of the least competitive rates in the market.

Energy Minister Angus Taylor said energy retailers had been “taking advantage” of loyal customers by hugely increasing electricity prices.

“The Government has demanded customers be put first and today loyalty tax customers are getting a better deal, including concession customers who need it most,” he said.

“While the government welcomes the action taken by the energy retailers, there is more to be done.”

Across Victoria, about 10 per cent of electricity customers are on standing offers. Most others are on typically cheaper market offers.

Standing offers are meant to be a “safety net” for customers not on market offers, but power companies have failed to pass on cheaper prices.

The Morrison Government has asked the Australian Energy Regulator to develop a clear benchmark against which families and businesses can compare their bills.

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