A new change to the energy market will save Australians time and money as they shop around for a better energy deal.
In a move the ACCC said could save Australians an average of $126 per year, energy providers must now allow customers to switch providers within two business days.
Compare the Market spokesperson Simon Downes said the change meant Australians would start seeing savings almost as soon as they switched.
Mr Downes said previously energy providers worked at a “snail’s pace” when customers opted to change providers.
Up until now, Australians faced a wait of up to three months before being billed by their new energy provider.
This is because, unless they had a smart meter, their meter had to be physically read before they could receive their final bill from their old energy provider.
The switch between energy providers will now only take two days, saving customers time, money, and confusion over which provider should be charging them.
The shorter switch time will also deprive large energy providers of the “pretty grubby” practice of offering customers better deals when they try to move to a new provider, Mr Downes said.
He said since those providers won’t have the time to offer retention deals, they will be forced to offer more competitive deals upfront.
How to find the best deals for you
“The best energy deals are actually very easy to find if you know what you’re looking for,” Mr Downes said.
“And what you’re looking for is the biggest percentage off the reference price.”
Set by the Australian Energy Regulator, the reference price is essentially a price cap imposed on energy retailers, which express their discount offers in relation to this cap.
This means if one provider offers a 20 per cent discount on the reference price, and another offers a 30 per cent discount, the latter is the cheapest option since they both are using the same figure for reference.
The reference price allows consumers to “compare apples with apples”, Mr Downes said.
Reference prices vary between – and sometimes within – states and territories and are updated every year.
Researching discounts on reference prices will give you a good idea of where to find the cheapest deals.
But it is also important to consider your specific circumstances.
He said the cheapest deal for one person isn’t always the cheapest deal for someone else.
“The only sure-fire way to find the best deal for you is to actually use your existing billing information in [an] online comparison site,” Mr Downes said.
Don’t be scared to switch
Millions of Australian households have never switched energy providers due to a “hangover” from when switching energy providers was time consuming, confusing and expensive, Mr Downes said.
“I think a lot of consumers are still scarred from the years of high prices, misleading information [and] confusing discounts,” he said.
But the faster transfer time should motivate more people to be proactive about their choice of energy provider.
“Energy is the same product through the same poles and wires – you’re just choosing which brand you want to be billing you.”
When switching to a new provider, Mr Downes recommended asking your new retailer if they could backdate your energy usage to your last meter reading and charge you the new price for which you have signed up.
This way, not only will you save money going forward with your new deal, but there’s also a chance you could pay less for the energy you’ve already used since your last meter reading.
Mr Downes said people could be “pleasantly surprised” with how much money they can save if they ask the right questions.
“Energy prices can and do change pretty frequently,” he said.
What might be the best deal for you today might not be the best deal in a few months’ time, so Mr Downes said Australians need to “play the game” and be willing to switch energy providers to save money.