Households across Victoria, South East Queensland, NSW and South Australia are still confused about the government’s recent changes to how energy plans are costed, new research has shown.
Compare the Market said approximately 806,000 households in these areas have been moved to a default energy offer, but only 8 per cent are aware of how the changes will affect their back pocket.
The federal government brought in the default market offer (DMO) in July of this year to make it easier for customers to compare energy plans between providers.
It’s the annual maximum total bill amount that energy companies can charge for the “standing offer” prices and is based on a set average usage amount.
While these offers have the potential to reduce energy prices anywhere from $130 to $430, Compare the Market has warned that these offers still might not be the best available to consumers.
According to Compare the Market’s general manager of banking, Rod Attrill, “you shouldn’t simply accept that the default market offer is the best deal available”.
“In fact, there are many market offers – with or without conditional discounts – that provide cheaper usage rates and supply charges than these DMOs.”
Compare the Market has provided some information on how you might be able to save more money on your energy bill without moving to a default option:
Getting the cheapest power plan
A competitive usage rate and daily fee
Ensure you look at every aspect of your plan, not just the perks and conditional discounts involved.
A competitive usage rate might still leave consumers with a hefty bill if they are charged a high daily fee, meaning customers should look at the overall package.
A plan that suits your household’s energy usage
Different plans could help you save money on your electricity bills. For example, if you’re away from home during the day and at home most evenings throughout the week, you might benefit from a “time of use” tariff.
The length of your introductory offer
You might be able to extend your introductory offer and 12-month discount by reviewing your plan each year and negotiating with your provider to keep this offer. Don’t be afraid to switch to a provider that offers more value for you and your household.
Sweeteners that may benefit you
If you’re still deciding which energy plan suits your needs, you might find that certain perks become an important deciding factor. For instance, some energy providers allow you to link up your Flybuys membership with your electricity account.
Energy plans that offer better value
By comparing energy plans across various providers, you may find a more competitive usage rate, daily fee, conditional discount or perk.
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