More Australians are struggling to pay their energy bills after prices soared last year, according to new data from the consumer watchdog, but the good news is relief has arrived.

Figures published on Friday by the Australian Competition and Consumer Commission (ACCC) showed national power prices spiked 14 per cent in the year to September 2023, sparking an 18 per cent rise in consumers applying for financial hardship help.

Electricity prices have fallen with retail offers dropping by hundreds of dollars in recent months as regulators prepare to enforce decreases in default market offers.

One Big Switch campaigner Joel Gibson said the best savings are available to people who shop around, which can be done through government comparison website energymadeeasy.gov.au.

“The cheapest offers on the market are around $200 cheaper than they were six months ago,” Gibson said.

“If you haven’t switched lately, July’s a good time to do so once all the rates on the plans have updated.”

Price relief may be short-lived

The need to be active with your energy plan has brought savings in recent years, and will be all the more important leading into July 1 because price relief might not last forever, the ACCC warns.

The ACCC said recent price relief has been helped by a milder winter last year, which is unlikely to be replicated this year and could drive bills higher .

“A return to more normal weather conditions may result in consumers receiving higher bills this year as their levels of consumption increase,” ACCC commissioner Anna Brakey said.

Signs of that are evident as a cold snap along the east coast of Australia in recent weeks has brought warnings from the market operator about elevated demand for heating.

“Some retailers are raising prices by as much as 38 per cent at the moment, while others are cutting rates, so it’s important to make sure you’re with one that’s going down not up,” Gibson said.

Retailers on notice

Interestingly, the ACCC has also spotlighted a curious trend in the retail electricity market over the past 18 months that has seen families moved from flat rates to more dynamic plans.

These include time-of-use plans, where retailers charge different prices depending on when a household uses electricity; and so-called demand plans, where bills have additional charges.

“These types of plans aim to provide incentives to customers to shift their consumption to periods when electricity is cheaper to supply,” the ACCC said.

“Retailers typically move a customer onto these plans to align with the tariff changes they face at the network level, usually following the installation of a smart meter at a customer’s premises.”

The plans are most common in South Australia and Southeast Queensland, where 27 per cent and 14 per cent of customers respectively were on these plans in the 2022-23 financial year.

Brakey said the ACCC is concerned that customers may not be aware they’ve been moved onto a dynamically priced plan.

“Retailers must notify their customers if they intend to move them from a flat rate plan to a time-of-use or demand plan and explain what impact this may have on their bills,” Brakey said.

“If a customer is not aware of this change, then they cannot adjust their electricity consumption accordingly and may face higher bills unknowingly.”

Gibson said that dynamically priced plans can work, but that they aren’t for everyone.

“Time of use plans are designed to encourage you to use more energy in off-peak times by charging you less at those times,” he said.

“Which is great, if you know how they work and you’re able to shift your usage to those off-peak times.

“But millions of homes are now being moved onto these plans and many don’t even know, and in some cases it’s caused bills to blow out.”