Almost 2.5 million Australian households are paying more than they need to for their electricity because they are at or above default offers, according to latest data from the ACCC.
The new Electricity Market Inquiry shows that someone who has stuck with the same energy plan for three years or more pays $221 dollars more a year on average than a customer with a new plan.
But while many Australians are missing out on better deals, Compare the Market Economic Director David Koch said the message was starting to sink in.
“Last year, I challenged Australians to compare energy plans to see if we could move the dial on these statistics,” Mr Koch said.
“Just over a quarter (26.7%) of customers are now on their retailer’s best offer – that’s up from 19.3% last year, which is a pretty good effort!
“But there’s still a long way to go with nearly 2.5 million customers still paying prices at or above the safety net. If you are one of the thousands of Aussie bill-payers who haven’t compared plans, it’s time to join the rest of us and start saving.”
Other report highlights include:
-Around 36.5% pay prices on or above the safety net.
-Approximately 434,000 pay 10% more than the safety net.
-More than half the customers analysed were on plans over a year old.
-Customers on older plans paid an average 4.7% more for flat rates and 4.2% more for time-of-use tariffs.
The Default Market Offer (DMO) caps the prices that energy retailers can charge for standing offer electricity plans in New South Wales, South East Queensland, South Australia, and the ACT.
In Victoria, the Victorian Default Offer (VDO) serves as a benchmark for fair pricing on standing offer electricity plans, helping consumers assess whether they’re getting a good deal.
These benchmarks exist to protect consumers but often there are much better offers available.
Mr Koch said the most frustrating thing was that often the savings were right in front of people’s noses.
“Too often we pay our bills without reading them or even opening them because of direct debits, and that means we’re missing out on important details,” Mr Koch said.
“Electricity customers in regulated markets get ‘better offer’ messages from their retailers in their bills.
“I have been banging on about this since I got the tip off the comparison experts from Compare the Market. It’s been two years, and I still get shocked reactions from people who don’t know it’s there.
“And it only takes a few minutes to see how your retailer stacks up by running a comparison.
“This year there are no excuses – I want everyone with the power to switch to do themselves a favour and really get on top of this.
“If those 2.5 million customers on old plans can make the change, that could represent massive savings.”
