It will soon be easier for Aussies to find cheaper electricity deals, thanks to new rules kicking in for retailers this week.
From September 30, power companies will have to tell customers on their bills if they have a cheaper plan available and how much they could save by switching.
This has been happening in Victoria for a few years, but it will now also apply to customers in New South Wales, Queensland, South Australia, the ACT and Tasmania.
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This will be known as the retailers ‘better offer’ statement and will be displayed on the front page of customers' power bills. It will be displayed on every bill for customers charged quarterly, and every third bill for those on a monthly cycle.
Retailers will also need to include details on how to switch plans, under the new obligations in the Australian Energy Regulator’s (AER) Better Bills Guideline.
AER Chair Clare Savage said the new billing obligations would provide “clarity and transparency” for customers, but encouraged Aussies to see if better deals were available elsewhere.
“Even if they are on their current retailer’s best deal, we strongly encourage all consumers to visit the Energy Made Easy website – energymadeeasy.gov.au – to compare plans and find out if they could be on a better deal with another retailer,” Savage said.
“Under the Better Bills Guideline, every bill must now include a link to this independent website.”
In addition to the ‘better offer’ message, companies will be required to use plain language in their bills.
How much can you save?
Consumer expert Joel Gibson said the move could help Aussies save hundreds of dollars, or find out if they are getting ripped off.
“28 per cent of Victorian residential electricity customers could have saved $100 or more last year by moving to their retailer’s best offer,” Gibson told Yahoo Finance.
“Some households could have saved a lot more – around six per cent of Victorian residential electricity customers could have saved between $250 and $400 last year. A further six per cent could have saved over $400 last year.”
But just having the pricing visibly won’t be a “silver bullet” for customers, with Gibson noting that only half of Victorian households were on their energy retailer’s cheapest plan.
Why can’t retailers automatically put customers on their best offer?
Simply put, it’s how retailers make money.
“It's called the front book/back book pricing methodology … You see it in energy, insurance, banking and it means old loyal customers pay more to subsidise the cheap deals to attract new customers,” Gibson said.
“So it's always been a bit of a mystery whether you're getting the best deal - they have 'retention offers' that they only offer you when you're leaving.
“They also have under the table deals they offer to friends and family, or to motoring clubs or rewards programs or money-saving clubs.”