Australians Overpaying for Electricity: ACCC Urges Consumers to Shop Around

January 02, 2025 — The Australian Competition and Consumer Commission (ACCC) is calling on households to take advantage of recent electricity price reductions. Their report reveals that over 80% of Australian homes in the National Electricity Market (NEM) could be saving money by switching electricity plans.

The Problem: Loyalty Penalty

The key issue identified is the "loyalty penalty." Many households remain on outdated plans priced above the government safety net, even though electricity prices have decreased. This penalty increases the longer a customer stays on an older plan, with estimates suggesting households on plans older than a year pay $238 more annually compared to newer offers.

The Solution: Comparison and Contact

The ACCC recommends two main solutions:

• Comparison Websites: Utilize government-provided comparison websites like Energy Made Easy or Victoria Energy Compare. These platforms allow consumers to easily compare plans and find potentially cheaper options.
• Contact Your Provider: Alternatively, simply contact your current electricity retailer and inquire about better deals. They are legally obliged to provide information on available options and how their prices compare to the safety net.

Additional Tips:

• Read Your Bill: Electricity bills include a statement informing you if a cheaper plan exists (every 3-4 months). If you see this message, it's a sign you're overpaying. Demand Offers and Complexity: While time-of-use offers can offer lower prices, demand offers might lead to higher costs, with over half of customers on such plans exceeding the safety net price. These plans are also more complex due to smart meter integration.
• Rebates and Concessions: Ensure you're receiving all available concessions and rebates by checking with your retailer or the government website (energy.gov.au/rebates).

The Report's Significance

While the report acknowledges a positive trend—lower annual prices compared to 2023 and more consumers on plans below the safety net—a significant portion of households still pay more than necessary. The ACCC emphasizes the importance of consumer action to benefit from price reductions.

This information empowers Australian households to take control of their electricity bills and potentially save money by finding a more suitable and cost-effective plan.

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