Finance Finance News Energy bill shock: How you can avoid a nasty surprise during COVID-19

Energy bill shock: How you can avoid a nasty surprise during COVID-19

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Energy bill shock is more common than you might think, but its also avoidable. Photo: TND
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We were already in a state of profound confusion as we negotiated first-time parenthood; a heady mix of joy, sleep deprivation and just making it up as you go along.

So we weren’t in a clear state of mind when we received our quarterly gas bill recently, which was around triple the usual amount.

Shocked and annoyed, we assumed there must have been a mistake and called our gas company.

It turns out there was no mistake and we had used much more gas than usual.

Apparently the energy company often receives bill queries from new parents who haven’t given a second thought to the cost of running heating overnight.

And it’s not just new parents who can feel blindsided by bills.

Bill shock is common

Kate Symons, commissioner and chairperson of Victoria’s energy regulator, the Essential Services Commission, said many people are facing higher energy bills than usual since they have been working from home during the pandemic.

“There are still lots of people working from home and that causes energy bills to be probably higher than normal,” she said.

“I would urge any of those customers, if they’re having trouble paying their energy bill or if they get a shock when they open their energy bill, they need to pick up the phone and call their retailer straight away.”

The average debt for customers on payment plans in Victoria is at its highest level since the start of 2019, growing 14 per cent to $1119 over that time.

Disconnections are also back to pre-pandemic levels, after being on hold for most of last year.

If you are struggling to pay a bill, you can ask your energy retailer for different payment options before things spiral out of control.

Ms Symons said customers can pay smaller amounts more often, change how often they pay and ask once a year to delay payment of a bill.

You can also ask to pay in advance if that helps you manage your budget.

Ms Symons encouraged consumers to check they’re on the best deal possible, with around two million people in Victoria alone paying higher energy bills than they should because they are not on the best offer from their retailer.

An easy way to work out if you’re on the cheapest deal possible is to take 10 per cent off the default price if you’re in Victoria or 15 per cent if you live in NSW, South Australia or south-east Queensland, according to One Big Switch.

The default market offer is a cap on what retailers can charge and all other deals they offer reference that price.

Victorians can compare deals on the website Victorian Energy Compare, while elsewhere in Australia, except in WA, you can check Energy Made Easy.

Managing and minimising bills

Wealth Market financial planner Michael Miller said an effective way to manage bills is to tally them annually, then split that figure into even fortnightly payments that you can make into a separate account.

Cutting power use can help lower your bills but it’s important to focus on what is going to make the biggest impact.

Energy Consumers Australia chief executive Lynne Gallagher recommended targeting three key areas: heating, cooling and hot water use.

Heating and cooling each account for around one quarter of your yearly energy costs, while hot water contributes 15 per cent.

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