Summary: You can save hundreds of dollars a year on electricity and gas by switching to the best offers and, where required to get the discount, by paying on time. You'll need to re-compare offers and switch if necessary once a year or when your 2-3 year contract or fixed-price period ends.
Gain: ~$200-500/yr. $300/yr @ 7% return = $4,145 after 10yrs and $12,300 after 20yrs.
Time: ~2-3 hours/yr to compare electricity and gas on the relevant government website and call the energy companies to switch.
Our Situation: Electricity is with Tango Energy paying $1/day supply charge and 16.467c/kWh. Our gas is with Origin paying 70.543 c/day supply charge with usage rates: First 65.75Mj: 2.2 c/Mj; Next 131.51Mj: 1.969 c/Mj; Remainder: 1.694 c/Mj. All prices include 10% GST.
Flickr CCby2.0 - Uwe Potthoff
Proof:
Using Victorian Energy Compare I compared the cheapest electricity plan from each retailer for the average household daily usage of 14kWh in inner city Melbourne (3068) on the CitiPower network. The absolute cheapest was $1,300 (GloBird) but they seem to increase their prices every 6 months as opposed to 12 months or longer. The next cheapest (Tango) fixes prices for two years and is $1,340/yr.
The most expensive retailer is Blue NRG at $2,390/yr. The median was ~$1,600/yr which is about $300 more expensive than Tango. This is just for electricity; gas savings are similar.
Another way of considering the costs of not switching regularly is that I was previously on the cheapest plan with Momentum Energy. Their end-of-contract updated rates were even higher than the rates listed below (costing $1,630/yr) and so not switching to Tango would have cost me around $400/yr at this usage level.
Victorian Energy Compare (August 2018, 14kWh/day, CitiPower network, no solar)
Steps / Tips:
1. Go to Energy Made Easy and compare offers. Victorians are redirected to Victorian Energy Compare instead.
2. If checking both electricity and gas offers check gas first as some gas offers depend on signing up for electricity as well. If the best gas offer is a combined one then also note the next best uncombined offer. Then check electricity offers separately and compare the best electricity offer with the combined offer. In a few locations the gas saving is big enough to overwhelm the electricity difference but in most locations it will be cheapest to choose the best electricity and gas retailer separately.
3. Many of the best offers require paying on time (often by direct debit) so make sure you can set this up. Some also require receiving bills via email. Even if direct debit is optional I recommend choosing this as you can automatically ensure you are paying on time to get the discount each period. Ensure offers are sorted by discounted price. Never pay late fees or other unnecessary fees (paper bills, fees for inefficient payment methods). Always paying on time is also useful when later trying to get the cheapest rate available matched by your current retailer (they don't try hard retaining less valued customers).
4. Some retailers have two plans costing about the same, one with cheap rates and no discount and one with higher rates but a big discount. Obviously you should just choose the one with cheap rates if everything else is equal. Hence, do not tick the box to "Show only the top offer from each retailer" as this may hide the better offer.
5. After the initial offer period (usually 12 months, or on contract up to 3 years) retailers will usually bump up the new rates considerably. You need to find the cheapest current offer and if happy with your current retailer ask them to match it (emailing them a copy is best). If they won't, then you need to switch. Some retailers do have separate cheaper rates for long-term or switching-savvy customers so after demonstrating your willingness to switch away you may get better subsequent rate increases.
6. In most states retailers cannot charge exit fees even if on a contract and you end it early. However, check the offer details to confirm. You can sign onto a 2-3yr contract even if renting and not staying that long. Given no disadvantages to being on a contract, if roughly the same estimated cost, you should prefer contract offers as they tend to fix prices (or at least the retailer component) and fix discounts and rate terms. However, if you go on a 3 year contract don't ignore checking rates yearly. If rates have dropped elsewhere you can exit your contract and switch.
7. Sometimes the cheapest offers do not have a contract or fixed price period. In these cases, read the "Price Changes" section of the offers closely to see whether one is more constrained. Also, check Product Review to see if their current operating practice is to increase rates every year or more frequently. (e.g. I checked Globird and found a comment advising rates are increased every 6 months and so elected to go with Tango)
8. Electricity offers are usually simple with some of the cheapest having only a single rate for all usage volumes. However, if one of the cheapest offers has two or more rates for different usage volumes then you simply need to consider how your average and maximum usage compares to the usage volume threshold. E.g. If in summer you use more electricity then whether the Step 2 volume rate is higher or lower than Step 1 and at what volume it kicks in should influence your decision.
9. If your electricity usage varies a lot from day to day or you have solar then it is beneficial to have a smart meter. All Victorian households have smart meters for electricity. You can follow the link from the website (e.g. Victorian Energy Compare) to go to your distributor site, register, login and then launch the energy comparison site using your smart meter data. This will provide more accurate estimated costs in the offer comparison list.
10. In states (like Victoria) or even local areas with smart meters there may plans with different rates for different periods of the day: peak, off-peak and possibly shoulder (period in-between peak and off-peak). The old less-regulated plans were known as Time of Use, don't use them. The newer type are known as Flexible pricing and there is a checkbox to see these. In my experience the cheapest Flexible pricing plan is at least 10% more expensive than the cheapest plan overall (single rate) so you don't really need to worry about the complexity of them. If your household's usage is exceptionally weighted toward off-peak periods then using your smart meter data the best Flexible pricing plan will become the cheapest overall.
11. Gas offers usually vary considerably in the number of usage volume steps, the levels used, and whether the rates go up or down. But most gas offers also have different rates for the different seasons depending on which part of the country you are in. In the colder states the peak rates will be for winter. There are no smart meters for gas so you need to check your prior bills to see typical usage for winter versus other seasons, especially if you use gas heating.
12. When switching and comparing offers look for additional "incentive" payments. Many retailers offer around $50 in credit or gift cards for new customers who remain and pay on time for a couple of months.
13. You can easily compare your current plan against the best market offers by uploading a PDF copy of your latest bill using the "What am I paying?" button. If your current retailer is more expensive but otherwise their price change frequency and service is fine you may wish to email them the best offer and ask them to match it. This only tends to work for a minority of retailers that have the flexibility and inclination to retain customers.
14. Review your bills each time they are sent (which should be via email). Occasionally you will find undesired energy drain or wastage due to higher than normal usage (thus charges). And sometimes manual meter reads are missed or there is a stuff-up with a change of occupier end read. In these cases, the retailer may over-estimate usage and you may need to contact them to resolve.
15. Do not bother paying more for Green Power. It's very expensive given the impact on renewable energy generation it actually has. There are far more effective ways to support renewable energy or carbon pricing. See: > Choice - Is GreenPower worth it?
16. All of the default filters on Victorian Energy Compare are fine. Ensure "Offers sorted by discounted price" is ticked.
17. To switch just click the Contact the retailer button on the Offer popup and follow the instructions. You need to do it by phone and it only takes about 15 minutes.
Further Info:
CitiPower
> myEnergy - Access your smart meter data
Victorian Energy Saver
Gain: ~$200-500/yr. $300/yr @ 7% return = $4,145 after 10yrs and $12,300 after 20yrs.
Time: ~2-3 hours/yr to compare electricity and gas on the relevant government website and call the energy companies to switch.
Our Situation: Electricity is with Tango Energy paying $1/day supply charge and 16.467c/kWh. Our gas is with Origin paying 70.543 c/day supply charge with usage rates: First 65.75Mj: 2.2 c/Mj; Next 131.51Mj: 1.969 c/Mj; Remainder: 1.694 c/Mj. All prices include 10% GST.
Proof:
Using Victorian Energy Compare I compared the cheapest electricity plan from each retailer for the average household daily usage of 14kWh in inner city Melbourne (3068) on the CitiPower network. The absolute cheapest was $1,300 (GloBird) but they seem to increase their prices every 6 months as opposed to 12 months or longer. The next cheapest (Tango) fixes prices for two years and is $1,340/yr.
The most expensive retailer is Blue NRG at $2,390/yr. The median was ~$1,600/yr which is about $300 more expensive than Tango. This is just for electricity; gas savings are similar.
Another way of considering the costs of not switching regularly is that I was previously on the cheapest plan with Momentum Energy. Their end-of-contract updated rates were even higher than the rates listed below (costing $1,630/yr) and so not switching to Tango would have cost me around $400/yr at this usage level.
Steps / Tips:
1. Go to Energy Made Easy and compare offers. Victorians are redirected to Victorian Energy Compare instead.
2. If checking both electricity and gas offers check gas first as some gas offers depend on signing up for electricity as well. If the best gas offer is a combined one then also note the next best uncombined offer. Then check electricity offers separately and compare the best electricity offer with the combined offer. In a few locations the gas saving is big enough to overwhelm the electricity difference but in most locations it will be cheapest to choose the best electricity and gas retailer separately.
3. Many of the best offers require paying on time (often by direct debit) so make sure you can set this up. Some also require receiving bills via email. Even if direct debit is optional I recommend choosing this as you can automatically ensure you are paying on time to get the discount each period. Ensure offers are sorted by discounted price. Never pay late fees or other unnecessary fees (paper bills, fees for inefficient payment methods). Always paying on time is also useful when later trying to get the cheapest rate available matched by your current retailer (they don't try hard retaining less valued customers).
4. Some retailers have two plans costing about the same, one with cheap rates and no discount and one with higher rates but a big discount. Obviously you should just choose the one with cheap rates if everything else is equal. Hence, do not tick the box to "Show only the top offer from each retailer" as this may hide the better offer.
5. After the initial offer period (usually 12 months, or on contract up to 3 years) retailers will usually bump up the new rates considerably. You need to find the cheapest current offer and if happy with your current retailer ask them to match it (emailing them a copy is best). If they won't, then you need to switch. Some retailers do have separate cheaper rates for long-term or switching-savvy customers so after demonstrating your willingness to switch away you may get better subsequent rate increases.
6. In most states retailers cannot charge exit fees even if on a contract and you end it early. However, check the offer details to confirm. You can sign onto a 2-3yr contract even if renting and not staying that long. Given no disadvantages to being on a contract, if roughly the same estimated cost, you should prefer contract offers as they tend to fix prices (or at least the retailer component) and fix discounts and rate terms. However, if you go on a 3 year contract don't ignore checking rates yearly. If rates have dropped elsewhere you can exit your contract and switch.
7. Sometimes the cheapest offers do not have a contract or fixed price period. In these cases, read the "Price Changes" section of the offers closely to see whether one is more constrained. Also, check Product Review to see if their current operating practice is to increase rates every year or more frequently. (e.g. I checked Globird and found a comment advising rates are increased every 6 months and so elected to go with Tango)
8. Electricity offers are usually simple with some of the cheapest having only a single rate for all usage volumes. However, if one of the cheapest offers has two or more rates for different usage volumes then you simply need to consider how your average and maximum usage compares to the usage volume threshold. E.g. If in summer you use more electricity then whether the Step 2 volume rate is higher or lower than Step 1 and at what volume it kicks in should influence your decision.
9. If your electricity usage varies a lot from day to day or you have solar then it is beneficial to have a smart meter. All Victorian households have smart meters for electricity. You can follow the link from the website (e.g. Victorian Energy Compare) to go to your distributor site, register, login and then launch the energy comparison site using your smart meter data. This will provide more accurate estimated costs in the offer comparison list.
10. In states (like Victoria) or even local areas with smart meters there may plans with different rates for different periods of the day: peak, off-peak and possibly shoulder (period in-between peak and off-peak). The old less-regulated plans were known as Time of Use, don't use them. The newer type are known as Flexible pricing and there is a checkbox to see these. In my experience the cheapest Flexible pricing plan is at least 10% more expensive than the cheapest plan overall (single rate) so you don't really need to worry about the complexity of them. If your household's usage is exceptionally weighted toward off-peak periods then using your smart meter data the best Flexible pricing plan will become the cheapest overall.
11. Gas offers usually vary considerably in the number of usage volume steps, the levels used, and whether the rates go up or down. But most gas offers also have different rates for the different seasons depending on which part of the country you are in. In the colder states the peak rates will be for winter. There are no smart meters for gas so you need to check your prior bills to see typical usage for winter versus other seasons, especially if you use gas heating.
12. When switching and comparing offers look for additional "incentive" payments. Many retailers offer around $50 in credit or gift cards for new customers who remain and pay on time for a couple of months.
13. You can easily compare your current plan against the best market offers by uploading a PDF copy of your latest bill using the "What am I paying?" button. If your current retailer is more expensive but otherwise their price change frequency and service is fine you may wish to email them the best offer and ask them to match it. This only tends to work for a minority of retailers that have the flexibility and inclination to retain customers.
14. Review your bills each time they are sent (which should be via email). Occasionally you will find undesired energy drain or wastage due to higher than normal usage (thus charges). And sometimes manual meter reads are missed or there is a stuff-up with a change of occupier end read. In these cases, the retailer may over-estimate usage and you may need to contact them to resolve.
15. Do not bother paying more for Green Power. It's very expensive given the impact on renewable energy generation it actually has. There are far more effective ways to support renewable energy or carbon pricing. See: > Choice - Is GreenPower worth it?
16. All of the default filters on Victorian Energy Compare are fine. Ensure "Offers sorted by discounted price" is ticked.
17. To switch just click the Contact the retailer button on the Offer popup and follow the instructions. You need to do it by phone and it only takes about 15 minutes.
Further Info:
CitiPower
> myEnergy - Access your smart meter data
Victorian Energy Saver