How to avoid the ‘loyalty penalty’ and cut power costs
More than 80 per cent of Aussie households could be paying less for their electricity. Here’s how to get a better deal.
More than 80 per cent of Australian households could be paying less for their electricity if they shopped around for other plans or simply contacted their provider, a new report from the consumer watchdog has found.
The ACCC’s twelfth Inquiry into the Electricity Market report found retail electricity prices had fallen in the 12 months to August this year, but the vast majority of Australian households were not benefiting from the retreat in retail prices.
The report also found customers who had stuck with their current plan for more than a year were paying $238 more per year than those on newer offers — which the ACCC dubbed the “loyalty penalty”.
ACCC commissioner Anna Brakey urged Australians to at the least call their providers to see if there were cheaper pans available to them.
“If you haven’t changed electricity plans in the past 12 months, chances are you are paying more for your electricity than you need to,” she said.
“We are urging Australians to take some time this holiday period to have a look on the Energy Made Easy or Victoria Energy Compare websites to see if there is a better plan.
“Alternatively, people could simply call their retailers to see if they have a better offer available. We know that customers that haven’t done this in a while are probably paying too much.”
“Further, it is important to read your electricity bill when it comes. Every three to four months, electricity companies are required to tell you on your bill if a cheaper plan is available. If you get this message, you are paying more than you need to.”
The ACCC worked its data based on the number of households paying prices above the government safety net price, a minimum standard for those who have never shopped for another price.
Also, the ACCC found increasing complexity, where households are charged on time of use or demand tariffs, was making it increasingly harder to figure out how to find the cheapest plans on offer.
Despite this, annual household prices fell in 2024 from 2023 levels, but a majority of households could still be paying less.
“While we are pleased that compared annual prices have decreased from 2023 to 2024 and more consumers are on offers below the government safety net price, a substantial proportion of households remain on prices above these levels,” Ms Brakey said.
How to reduce your power bill
1. Call your energy provider directly and ask if a cheaper power plan is available. The energy provider’s contact number is listed at the top of your bill.
2. The Energy Made Easy website is a free comparison website created by the federal government. For customers in New South Wales, Queensland, South Australia, Tasmania and the ACT, it enables price comparisons for power providers in each suburb. Victorian customers can use the Victorian Energy Compare website to compare costs in their suburb.
3. Read your full energy bill each time it arrives to check for any note advising if a cheaper plan is available.
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