As you’ll all know energy prices have been on the increase for many years. The days of ‘set and forget’ are long gone. Those that have the time and know how to read bills properly, compare rates and get the best deal most likley will have a decent deal. However there are thousands of people who simply don’t have the time and have been left on high ‘standing offer’ rates, so paying significantly more for energy than they should.
Recommendations from the Australian Competition and Consumer Commission’s (ACCC) 2018 inquiry into electricity prices advocated that the government and regulators step in and introduce what’s called a ‘Default Market Offer’. But what is that and how does it work? The Default Market Offer is an electricity tariff which has been set by the Australian Energy Regulator and intended to serve as a price cap for energy retailers. It will also serve as a reference price which all other market offers must be compared to.
The Default Market Offer is available in Victoria, New South Wales, South East Queensland and South Australia from 1st July 2019. If you have been on a ‘standing offer’ you should have automatically been moved to your retailers ‘Default Market Offer’ which could be significnatly lower than what you were paying previously. Meaning you should be paying less.
For consumers in Victoria, the Essential Services Commission thinks the result will see customers on high priced contracts switched to cheaper deals which they expect should result in savings between $310 and $450 a year. They said the default offer is based on its independent assessment of the costs retailers need to recover to provide electricity to Victorian consumers.
The following table from the Energy Services Commission provides an example of estimated annual energy bills for residential households based on a low, medium or high energy use (figures include GST). This is a guide only and your own costs will vary depending on location, tariff and usage.
“This is one of the biggest reforms to the energy sector in over a decade – and it’s not just available to people currently on standing offers; anyone can ask for the Victorian default offer,” Ms D’Ambrosio said.
The default offer has been described as a ‘safety net’ and should being relief to those who have been on high tariffs. But householders should not rely on that to get the best deal, there are many better deals available from a wide variety of retailers. Be sure to compare rates and other standing charges (including discounts) and look at the total cost of energy before deciding.
If your energy use is high and you want to know how to reduce it and have your tariff reviewed as well, our Energy Audit services will help.