For many years, the only place to buy gas and electricity in Australia was from government agencies. This has changed over the last twenty years or so as state governments have chosen to sell off parts of their infrastructure and supply networks to private enterprise. This has gone some way to deregulating the market, but some obligations still stand for energy suppliers and retailers, while you retain certain rights and expectations which are enforceable.
What to look for when you’re signing up
Every energy contract is likely to be slightly different between retailers, and most of them come as a plan of some description, all with different names and strings attached. Some may have renewable energy options built in, while others offer a discount for on time payment, or options to may at different intervals. The only way to really understand the differences is to read through the terms and conditions of each one and compare them. However, there are some basic points to look out for when choosing a contract:
Is the contract fixed in relation to rate and period, or is it flexible? Some contracts will lock you into a fixed term of supply with the same retailer and even fix the rate for the period. This is possibly a good thing if energy prices are rising, but limits your ability to find a cheaper deal with an alternative supplier.
Are there penalty charges for finishing a contract early? Many energy contracts will also include a penalty for leaving a contract early, or altering the terms of supply in any way. It’s worth keeping this in mind if arranging a connection for a short term, like on a property lease.
Are you receiving a “market retail offer” or a “standard retail offer”? When a retailer offers you a supply contract, it can be one of two types of offer. Market retail offer pricing is set by the retailer, and allows them to offer discounts, for example, if a bill is paid early. It also means they can put up the price at any time without warning, even if the contract has just been signed. Standard retail offers are not usually priced by the retailer and can only raise prices once every six months. There are no discounts applicable, and you must be given more notice of price increases.
What is the retailer’s customer service like? It’s worth considering how easy a retailer is to deal with for service requests and complaints. Most of these will be over the phone, though increasingly businesses are making online services more readily available and easier to use.
Are there any concessions available? In many cases, energy supplies are available at a reduced cost for seniors and people with government health care cards. It’s worth enquiring with individual retailers about these arrangements.
How the law protects you
State/territory laws governing the fair retail of power
National Energy Retail Law helps to ensure you can access the best deal for energy by removing barriers to interstate trade in gas and electricity by suppliers, through retailers to the general public. This trade is overseen by the Australian Energy Regulator, a federal government body responsible for regulating the wholesale energy markets, regulating energy networks, and the regulation of retail markets. Energy markets, in this case, refers to gas and electricity generation and supply in Australia.
NERL currently applies in all state except Victoria and Western Australia.
Who makes the laws for energy retailers?
The Australian Energy Market Commission is responsible for rules governing the retail sale of electricity and natural gas supply in Australia. They also deal with obligations related to energy distributors and wholesale energy markets between generators of electricity and distributors. Their complete list of current rules can be found here. The rules cover commonplace interactions between you and your retailer, detailing for example that a retailer or distributor must indicate that other retail options may be available. The rules also detail the expectations of retailers in dealing with problems in payment and taking hardship into account, based on the idea that energy is a basic need in most situations, and also that withdrawing supply can make debt recovery even more difficult.
What to do if an energy supplier breaches the rules?
Most energy supply businesses will try to stay within the confines of the law, but that’s not to say breaches don’t sometimes occur. Changes in individual company policy may not keep up with changes to the rules for energy supply businesses. In all states in Australia, there are Energy and Water (or just energy) Ombudsmen who can deal with complaints about matters relating to energy supplies without taking them to court. The Australian Energy Regulator also has a dispute resolution system in place for matters related to you and energy supply contracts.
Changing energy providers
If wish to change energy providers you are free to do so at any time, although it may involve paying a fee if a contract is a fixed term arrangement. Most energy retailers will take over the process of moving from another retailer to their service once your decision has been made, leaving you free to start making real savings.
With increasingly deregulated energy markets at the retail level and big differences in prices, it’s often worth shopping around to find the best deal. If you are looking for an overview of different companies and prices available in the market, use the energy comparison tool to assess providers and find a better deal.