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If your electricity bill is leaving you shocked, it might be time to look for a cheaper Electricity Plan. But where do you start? The key to finding an appropriate Electricity Plan is a tried-and-trusted strategy: comparing Electricity Providers.
Start by getting an idea of your usage patterns and understanding how electricity rates work. So, if you’re ready to jump right in and start comparing a selection of providers, you can use our convenient online platform.*
Your electricity bill is a combo of a few different factors. If you know what goes into getting that final price, you might discover some opportunities to cut costs and save.
Different Energy Plans can charge you different rates. For instance, some plans have just one rate known as a ‘single rate tariff’. Other plans, known as ‘time-of-use tariffs’, will charge you different rates at different times. These might be cheaper if you tend to use electricity during ‘off-peak’ times.1 While we don’t recommend becoming a vampire and living your life in off-peak electricity times, moving to a time-of-use tariff plan could be a way to save. As you’re reviewing your current Energy Plan and comparing other options, take note of the tariff type, not just the price.
Some plans come with fees and charges that get added to your bill. These can include connection fees when you first connect your property with the Energy Provider, even if you’re an existing customer; late fees if you don’t pay a bill on time; or termination fees if you leave the contract early. Understanding what these charges are and if they’re a factor in the plans you’re comparing will help you avoid any nasty surprises when your bill shows up.
Most Electricity Plans offer variable rates: rates which go up and down with the energy market. However, some providers will also ‘fix’ their rates for a set period. These fixed rates will provide some assurance that your electricity charges won’t rise suddenly during the set period. Depending on what your finance habits look like and if you want to take a gamble, variable or fixed rates may be more attractive for you. Knowing how you use electricity at home throughout the year can also help you make this decision.
Who doesn’t love getting a bargain? Excitingly, you might be able to grab some discounts on your energy bill. This could be for paying your bills on time or using direct debit. Your Electricity Provider might offer discounts for signing up to their Energy Plans online, as well as receiving all bills via email rather than the post. So, keep those eyes peeled for any of these discounts, including what conditions they have attached.
If you ever have any questions about your electricity bill and how the total amount due was calculated, be sure to check in with your provider. They can explain why it may be different to what you were expecting.
There’s a bunch of different reasons why electricity in Australia can cost a fair packet, even in places where prices are regulated. How much it costs to generate, transmit, distribute, and sell the energy all make up the overall electricity price.2
Surprising no-one, inflation is also a big culprit. It’s made the building costs for transmission and distribution systems more expensive, and it’s made the operational costs for retailers bigger too.3
The energy market works a bit differently depending on which state or territory you live in. Some locations have private companies that generate the electricity which Energy Retailers then sell to customers as part of the national electricity market (also known as the NEM). This is the case if you live in Victoria, Queensland, New South Wales, the Australian Capital Territory, South Australia or Tasmania.4
However, if you’re living your best in the West, things are a bit different. The majority of residents in WA will be dealing with state-owned companies Synergy and Horizon Power, which generate, distribute and sell electricity.5 If you live in the area that the South West Interconnected System (SWIS) operates, you’ll get your power from Synergy.6 Alternatively, if you’re outside the SWIS, you can technically choose your Electricity Retailer. The catch though is that Horizon Power is often the only option available.7
The energy market is different again in the Northern Territory. Electricity is predominantly generated by Territory Generation.8 Power and Water then distributes this electricity,9 which is sold through Energy Retailers, where applicable.10
If you know how your location’s electricity market works you might be able to better manage your expectations when looking for the cheapest electricity available. For instance, if you live in an area where it’s handled by the state government, you may not be able to access a wide range of Electricity Plans. On the flipside, with lots of retailers there’s lots of competition, which can mean cheaper plans.
This really depends on where you live. It’s not just about states and territories — electricity can be priced differently between regions as well as offer types. As a consumer, there’s pros and cons to pricing being more closely controlled, like more stability in prices, or for pricing to be more competitive, like bigger price differences and discounts between retailers. It comes down to what works for you.
To get the most out of our quick state-by-state breakdown of how prices on the electricity market are regulated or controlled, you’ll need to know if you’re after a standing offer contract or a market offer contract. Essentially, market offers are the ones you see advertised with discounts and deals, while standing offers are the alternative.11
Electricity Retailers in Victoria purchase electricity through the NEM with prices changing depending on supply and demand. As there are more than 100 participants in the market, things can get competitive.12 For consumers, this is good news — Electricity Retailers want your business, so they may offer lower prices, discounts, and other incentives. If you try out our comparison tool,* you may see what we mean.
Additionally, Victoria also has the Victorian Default Offer set by the Essential Services Commission. This helps to manage standing offer prices with a capping point,13 as well as provide a reference for you to test market offer prices against. It isn’t guaranteed to be the cheapest price out there, but it is a fair deal when taking into consideration the costs Electricity Retailers need to recoup.14
In New South Wales, the Electricity Retail Code holds sway over pricing to an extent. For instance, it specifies that standing offer contracts can’t be more than the Default Market Offer (DMO). This is a price set by the Australian Energy Regulator annually that takes into account the costs of supplying energy and balances them with consumers' needs.
For market offer contracts, retailers have more freedom in what they can set, which can mean really good deals for you. However, they need to use the DMO as a reference price to compare their plans against. You’ll see this as a comparison percentage. The idea behind this is to make it easy for you to compare multiple plans from any retailers.15 If you haven’t got a head for numbers or you’re short on time, it’s a lifesaver.
Electricity Plan pricing was deregulated back in February 2013 for South Australia.16 But, like NSW, Electricity Retailers need to keep the DMO in mind when setting prices. Standing offers also have to be capped at the DMO, and market offer contracts need to have that handy comparison percentage based off of the reference price.17
The ACT is a slightly different kettle of fish. The government sets and regulates electricity prices. This means you can be upfront and ask for a contract with that regulated electricity price.18 However, if you want to shop around, you can check out market offers from a range of Electrical Retailers. Just as with NSW and SA, you can use the regulated price as a comparison point to help you decide on a competitive plan.19
Queensland is a big state — it’s more than twice the size of Texas after all. The sheer scale of the state plays a role in electricity pricing, even if prices have been deregulated since July 2016 for those in the great South East.20 In Brisbane and the surrounding area, Electricity Retailers need to follow the same rules as SA and NSW. Namely, cap standing offer contracts at the DMO price and provide that comparison percentage based on the DMO for market offer contracts.21
If you live elsewhere in the Sunshine State, your electricity prices are still regulated.22 The whole process then works similarly to the ACT with you getting to choose your Electricity Retailer and pick from their market offers or asking them for the regulated pricing.23 FYI: you might also see it referred to as ‘notified’ pricing when you’re looking over plans.
Things are a bit simpler if you’re up North. The NT Government regulates electricity pricing through the Electricity Reform Act 2000.24 This includes fixed daily charges and time-of-use tariffs.25 As a result, you aren’t likely to find a great deal of difference between Electricity Retailers, beyond who can supply your home or if there are bundles with other services included.
Like in the Top End, the Western Australian government regulates pricing across the state. But you won’t actually get to choose an Electricity Retailer unless you’re using more than 50MWh a year. Then it’s just a matter of where you live determining if you’ll be with Synergy or Horizon Power.26 What’s nice though is that the Uniform Tariff Policy means that no matter where you lay your hat in the state, you’ll be charged the same rate, regardless of how much it actually costs to supply you with that power.27
In Tasmania, you can choose to go with a regulated standing offer or play the market with a selection of different retailers.28 The regulated standing offer is a little like the DMO where it’s about paying a price that reflects the costs of supplying electricity, while still ensuring you aren’t paying through the nose. It gets a little more complicated when you dive into how this price is calculated though with the regulated offer retailer proposing the max price and the Tasmanian Economic Regulator rejecting or approving it.29 Luckily, it’s a bit of a non-issue at the moment since Aurora Energy is the only current regulated offer retailer!30
If you need a bit of a hand paying your electricity bills, you may be eligible for concessions or rebates. But these too vary depending on where you live. While the below list isn’t completely comprehensive, it gives you a general idea of what is out there as of September 2023. You can always do your own searching at energy.gov.au as well.
New rebates and concessions can pop up as the old ones wind down, so while we try to stay up to date with all the latest developments, it’s a good idea to keep your eyes peeled as well.
Unfortunately, there’s no hard-and-fast rule on this one.
An Electricity Plan that doesn’t have a lock-in contract or exit fee gives you some flexibility if you think you may want to switch providers in the near future for any number of reasons. For instance, if you’re planning to move at some point and your current provider won’t be able to reconnect the electricity to your new address. This flexibility may come at a cost though with higher rates.
However, let’s say you sign up to a plan with cheap rates and a fixed term. If the plan works for you, the price remains competitive and nothing unexpected comes up, then it might be worth it. But ‘might’ is the operative word. Unless you can predict the future, it’s not a guarantee.
Ultimately, a good strategy is to balance price and flexibility to get the best of both worlds. You may find a number of competitively priced plans that don’t lock you into a prescribed term, while offering a decent array of options when it comes to tariff types. The trick is to go searching.
This comes down to what kind of plans and discounts an Energy Provider offers. Some might be willing to offer gas and electricity bundles at a reduced price, but this doesn’t mean that a bundle will always be cheaper. Heck, in some cases, getting gas and electricity from different providers might be the more cost-effective option while giving you plans that are better tailored to your specific needs.
It’s all about comparing the different options on offer. How do different bundles stack up to separate Gas and Electricity Plans? Are they cheaper? More flexible? Better suited to how you use energy? Be meticulous, do your research and you’ll usually find something that works for you.
There’s no point sugar-coating it. Rising electricity costs aren’t easy for anyone to deal with. But that’s just one more reason to check out plans from a range of different Electricity Providers. Doing so might help you find a great competitive option that’s better for your needs and your wallet. If you’re keen to see what you may be able to save on electricity, use our online tool to compare plans from a range of providers now.*