Best Energy Providers

Should I switch energy providers?

There are a few reasons as to why you might want to switch energy providers. Sometimes, the value of deals deteriorates over time when the benefit period ends and costs increase.

Lots of customers are also swayed into an energy deal by ‘bait and switch’ tactics, which offer huge discounts when you sign up with a retailer, to only then have them raise prices without warning.

With energy prices rising, it could also be a good idea to reassess whether the plan you’re on is the most suited to your energy usage and budget.

Whether or not you switch energy providers is up to you, but it’s always a good idea to pay attention to your energy bill and see whether you’re getting a good deal.

How do I choose an energy provider?

Here’s what you should consider when you’re comparing gas and electricity providers.

Your usage

Make sure that the plan you’re going on is a good fit for your energy usage. A contract might, for example, offer discounts on off-peak energy use. While this may mean savings if you can realistically move activities to these times, it may increase your costs if you need to use energy at peak times.

Price

Your energy bill has 2 parts: a supply charge (also referred to as a service charge or fixed charge) and a usage charge.

The supply charge is how much it costs to connect electricity or gas to your home, and will appear on your bill as either cents per day or as a total amount for the billing period. You’ll be charged this even if you don’t use any electricity or gas.

The usage charge is the cost of the electricity or gas that you use.

• For electricity, you’ll be billed in cents per kilowatt hour (c/kWh).
• For natural gas, you’ll be billed cents per megajoule (c/MJ).

It’s important to look at the rate per kWh or MJ when comparing deals. Sometimes, your bill might show more than one usage charge, such as different usage charges depending on whether you used energy in peak, shoulder, or off-peak times.

Is it cheaper to buy gas and electricity together?

It isn’t necessarily cheaper to buy gas and electricity from the same retailer. In some cases, bundling both on a dual fuel plan may score you some discounts, but these could still be more expensive in the long run than paying for electricity from one provider and gas with another.

You should still compare base usage rates to make sure you’re getting a good deal. If a retailer offers a dual fuel discount but their underlying rates aren’t actually competitive, then it may not be worth it.

Although not necessarily cheaper, one advantage to consolidating gas and electricity under a single provider is that it can make paying bills and budgeting easier.

Type of contract

The tariff you’re charged will depend on what kind of contract you have with your provider, who may offer you either a standard retail contract or a market retail contract.

Standard retail contracts have set terms and conditions and cannot be changed by the provider. Under some of these contracts, the price you pay for energy is determined by the state or territory government. If you’ve never switched retailers, then you’ll likely be on this type of contract.

Market retail contracts have varied terms and conditions. They may cost less, offer renewable energy or discounts, and often have fixed terms where you’re charged an exit fee if you leave the contract early. In most cases, these types of offers will be cheaper in the long run and are more competitive out of the two.

Fees

There may be some extra fees charged under your contract, including but not limited to:

• Late fee: this is charged if you fail to pay your bill on time.
• Credit card fee: a fee charged if you pay by credit card.
• Early termination fee: if you’re on a fixed term contract, you may be charged a fee if you switch before the contract has ended.
• Moving fee: some retailers charge this if you move home.

Payment method

Check billing and payment details, such as how and when you’re billed. Also see if the provider’s payment options are suited to you.

You should also check the provider’s hardship policy and what this entails, particularly if you’re working with a tighter budget. A hardship policy offers support and protection if you are struggling to pay your energy bill.

Discounts

You can sometimes get certain discounts for your energy bills, including:

• Pay on time: applies if you pay your bill on time. If you don’t manage to pay a bill on time, you may however be hit with a late fee.
• Email billing: sometimes offered if you choose to have your bills emailed instead of sent by mail. Conversely, some retailers will charge you a fee for a paper bill rather than offering this discount.
• Direct debit: offered when you let your retailer directly take what you owe from your bank account, rather than waiting for you to pay your bill manually.

Just remember to keep in mind that often discounts are temporary. They may be nice extras, but don’t rely on them for savings in the long term.

You should check whether discounts apply to the whole bill (that is, both supply charges and usage charges) or just usage, because this can make quite a difference to what you’re actually saving.

Going green

There are also providers that are more environmentally friendly than others, but it can be difficult to cut through the noise with so many retailers advertising themselves as “green”.

Consider the following questions when assessing a retailer’s environmental impact:

• Does the provider offer green energy products to let their customers support the renewable energy sector?
• Does the provider offer carbon offsetting?
• Does the provider support renewable energy industries? For example, do they support electric vehicles, or do they own assets like solar farms or wind farms?

GreenPower is renewable energy from companies across Australia that have been accredited by the government. If you’re interested in reducing greenhouse gas emissions and helping grow the renewable energy sector, then consider purchasing this. However, in some cases, you may be paying extra on top of your usage to offset your power.

Checklist before you switch

If you’ve found a plan that suits you and you’re ready to switch, go through the checklist below.

• Check with your current provider to see if they can offer you a better deal. Some power providers will match or do better.
• Know about your cooling-off rights. By law, when you enter a new energy contract, you have a cooling-off period of 10 business days, during which you can cancel the contract and not be charged an exit fee.
• Check leaving fees. See whether you have to pay a fee to leave your current energy plan.
• Check price changes. See whether prices can change on your new plan, and whether there are already any planned price changes.
• See if you can get a concession. Rebates and concessions are typically offered to pensioners, low-income earners, and those with certain medical conditions.
• Check the conditions of a contract. Ask what will happen at the end of your contract, including what you’ll need to do if you want to renew and what will happen if you want to switch providers.

Contact the new provider directly if you do decide to switch. The process of switching energy providers can take anywhere from 1 to 3 months to do, depending on your retailer and where you are in the payment cycle. Your energy supply won’t be interrupted if you choose to switch.

The bottom line

It’s important to know the fine print of any power supplier and plan you’re considering switching over to. You could even ask a friend or family member to look over your new contract - a fresh set of eyes may pick up on even a minor detail that you’ve overlooked.

Cutting through the marketing and seeing an energy plan for what it is - including rates, fees, benefits, and more - is essential to helping you compare energy providers and find a good deal that means savings on your bills.