Do your homework, you may be paying more for electricity than you need to

Australians are being urged to do their homework and compare their electricity plans to ensure sure they are getting the best possible deal in light of recent price hikes.

In bad news for consumers, power prices have recently increased 10 to 20 per cent above the regulated safety net.

Think of the regulated safety net as a helpful tool that does two things: it puts a limit on prices for those with standing offer contracts, and it sets a standard price for those with market offers.

The Australian Competition and Consumer Commission (ACCC) points out that if you’re on a market offer, you might be shelling out more money than those on a regulated standing offer. So, right now is the perfect moment to consider getting a money-saving plan.

“We know that many Australians are likely paying more for electricity than they need to because their recently increased rates are higher than the safety net built into standing offer contracts,” ACCC Commissioner Anna Brakey said.

Based on average consumption, an average household on a market plan which is currently 21 per cent above the reference price, could save about $400 annually by moving to the regulated standing offer.

Up to $600 per year could be saved for those moving to a market offer 10 per cent below the reference price.

While energy companies are obliged to show how their plans differ from the regulated standing offer, they don’t have to switch you to a better deal automatically.

However, you have the right to choose a standing offer contract and the ACCC is calling on Australians to take the time to compare their electricity plans as this could help them save money and ease cost of living pressures.

“You don’t necessarily need to change your energy company to get a better deal: the simplest thing you can do is to contact your existing company and ask how your current plan compares to the regulated standing offer,” Brakey offered.

To make sure you don’t pay a dollar more than you should for power, the ACCC highly recommends calling your energy provider and asking the following simple questions:

1. How does my current plan compare with the ‘reference’ price? (a higher percentage off the reference price will usually be a better deal).
2. Do you have a better deal at the moment? (Don’t forget to ask how long a deal lasts).
3. Are there any conditional discounts on your plans? (Check if you could save more by paying on time or setting up a direct debit).

In addition to asking the right questions, minor adjustments to how you consume energy could also make a major difference to that monthly budget.

Previous research by Finder.com.au found that consumers could save hundreds of dollars simply by changing their energy habits.

Switching to cold water clothes washes, using the abundant Australian sun to dry your washing, reducing shower time and switching off unnecessary lights and appliances are all quick and easy ways to reduce energy usage.