19 June 2020

Buyer beware: big energy discounts could come with a shock

| My Gungahlin
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If you want to save money on your energy bills, don’t chase the biggest discount.

That’s the advice from consumer groups who have examined a range of electricity and gas deals and found that those offering generous discounts can also have the highest usage and supply charges.

The ACCC’s preliminary report into Retail Electricity Pricing found that if consumers switched providers based on the biggest discount, they could end up paying more overall because deals tied to large headline discounts were often based on much higher base rates.

Research group Canstar Blue backed up the ACCC findings, telling news.com.au that their analysis demonstrated that plans “with discounts of just 2 per cent and 10 per cent work out cheaper than some of those promising 30-35 per cent off”

The findings are a timely reminder at a time when many Canberrans are looking for ways to manage increasing energy costs.

Like many Canberrans, James and Cindy Meadley from Nicholls have been actively looking for ways to manage their energy usage. They had noticed some energy retailers touting big discounts so when they received a sales call with an offer that included a large discount, they were interested in finding out more.

“It seemed like a good deal to me” said Mrs Meadly. “But I’m glad I read the terms because the discount was applied on a higher base rate and you only received it if you went on direct debit plus you were locked in for two years”

The Meadley’s experience serves as a warning to anyone who is considering a discount offer on energy for their home or business to check the fine print carefully and compare the base usage rates and fixed costs to be sure of what they’re getting.

In the ACT, consumers can choose between a handful of energy retailers who are all offering various contract terms. Basic usage and supply charges also vary with a recent analysis showing a wide gap across three retailers surveyed.

Based on a typical household’s annual electricity bill, local retailer ActewAGL came out in front with their standing offer some $226 cheaper than other retailers we checked.*

The good news is that it’s easier than ever to compare current market offers and better understand what’s really being offered. The Energy Made Easy website set up by the government aims to help consumers make sure they are comparing apples with apples.

It’s a tool that Mr and Mrs Meadley says ended up saving them from being locked into an energy contract that could have seen them worse off.

“It doesn’t take long to do a quick comparison and it could save you from getting a shock down the track”

You can access the independent Energy Made Easy website at www.energymadeeasy.gov.au

*Comparison between ActewAGL and other energy retailers. Based on residential customer on a standing offer.

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