Electricity retailers are now forced to pass on wholesale cost savings to consumers meaning households will save on electricity bills in 2021, but certain consumers will save more than others.
During the COVID-19 lockdowns of 2020, household electricity bills went up 7 per cent as consumption increased by 10 per cent according to the Australian Competition and Consumer Commission (ACCC). In June 2020, a law came into effect that requires electricity retailers to pass on savings to consumers. As there has been a reduction in wholesale electricity costs, which make up one third of electricity bills, reduced electricity bills can be expected later in 2021.
However, you don’t have to wait for these savings to be passed on to start spending less on electricity. If you haven’t changed your electricity plan in a while you may be paying more for electricity than you should be.
In the current energy market, there are two types of energy plans you could be on: the default market offer or ‘DMO’ (in 2019 customers on ‘standing offers’ were transferred to the DMO) and market offers. The DMO is not a competitive price for energy but more of a safety net for people not engaged in the energy market. Whereas market offers provide customers with discounts but normally for a set period of time, after this period customers are automatically placed on the DMO if they don’t enquire about being put on another market offer.
The ACCC said in their latest electricity market report that market offers have the potential to save households $200 a year.
If you’re after a better electricity or gas deal you can use the Australian Government energy comparison tool: https://www.energymadeeasy.gov.au/ to compare current offers. Or, if you or someone you know is not online then you can call your energy retailer and ask what deals they have on offer, if a cheaper offer isn’t made it might be time to call some competitors
Don’t get stung paying more for loyalty.