Time to read : 4 Minutes
If you’ve received a letter from your electricity retailer about price increases from 1 July, did you take a good look at it… or pop it in the too hard basket?
If you’ve filed away the letter or email to deal with it later – now’s the time to start doing something about it.
And your first point of action is to find out what your increase will be. Your letter will have some wording along the lines of: ‘your plan will be x % more / less than the electricity reference price’.
Ideally you want it to say at least 10% less than the reference price. If it doesn’t, your second point of action is to start shopping around for a better deal. But before we get into that, here’s a recap of the reference price.
What’s the reference price?
The simplest way to explain the reference price is that it’s a benchmark price set by the Australian Energy Regulator (AER). It’s designed to help you understand if the plan you’re on is competitive – whether you’ll be paying more or less than the benchmark (reference price) which the government sets.
In NSW it’s known as the Default Market Offer (DMO) while in Victoria it’s the Victorian Default Offer (VDO).
While this “safety net” has been around since 2019, it hasn’t always helped protect consumers from retailer price gouging tactics.
Industry reform on the way
Energy Minister Chris Bowen recently announced reform was needed to better protect customers and to get them on better deals.
"There are many, many Australians, either in hardship or not in hardship, who aren't on their best possible plan. That's not their fault. We need to make it as easy as possible for them to change.”
"The vast majority of bill payers, some 80%, could be getting a better deal,” Chris Bowen added.
Now that figure is mind-blowing, but I’m not surprised because we’re seeing record levels of enquiries at Compare Club from people receiving notices of rate increases.
What’s the increase?
When compared to the current reference price for a single rate meter, here’s what you can expect*:
In the Greater Sydney area electricity prices are going up by an average 7.8 - 8.7%, an annual increase of up to $174.
Regional NSW by 8% – an annual increase of $200.
South East Queensland by 5.8% – an annual increase of $119.
South Australia by 5.5%, an increase of $114.
For Victoria^, with the exception of the city and inner suburbs which are going up by 5% – an annual increase of $68, all other areas are a low 1% or less.
What’s in your power?
Circling back to your second point of action – start looking for a better deal. The good news is that you have some time on your side to find a more competitive electricity offer.
And while the new prices take effect on 1 July, don’t feel that if you miss this date it’s too late. Some retailers will be making adjustments between now and September and that also means there could be more savings to come.
But energy can be complicated and if the thought of switching is something you need help with, the Compare Club energy experts can help you with the whole process, quickly and efficiently. Simply fill in a form to get started.
You could also be eligible for energy concessions which are state based. Check for government initiatives in your state to see if you qualify for discounts.
Finally, take a look at how you’re using electricity to see where you can cut back. For example, turn off any appliances at the power point that you’re not using – they silently consume energy in the background. If you’re in the market for any new appliances, pay attention to the energy efficient options which can not only save you money but reduce your carbon footprint too. The more stars they have, the more efficient they are.
Bottom line
It’s not easy keeping up with all the changes and what’s happening in the energy industry, but if saving money on your electricity bill is something you’re keen to do, read your letter and talk to us.
We help Aussies everyday to switch and save and if we can’t find a better deal, that’s peace of mind you’re already on the best plan.
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
