New South Wales (NSW) residents are facing a sharp increase in energy prices, with the majority of energy retailers implementing hikes of up to 29 per cent for residential customers on July 1.
Some providers are going even further, raising prices by a staggering 50 per cent. However, a recent analysis by personal finance marketplace Compare Club has revealed a silver lining: households can save up to $714 annually by switching to cheaper plans offered by retailers who have postponed their price rises and bundled energy with broadband.
By comparing current offers and pricing, Compare Club found eye-opening discounts compared to the Default Market Offer (DMO) reference price in NSW. These discounts, combined with the delay in price hikes by select retailers, provide an opportunity for savvy customers to not only offset the impending increase but also stack additional savings.
|Area||FY23 DMO||New DMO from 1 July 2023||Maximum potential saving|
|Sydney & Central Coast (Ausgrid)||$1,512||$1,827||$538|
|Western Sydney & Blue Mountains (Endeavour)||$1,726||$2,228||$702|
|Regional NSW (Essential)||$2,092||$2,527||$714|
Energy prices in NSW are linked to the DMO, resulting in customers experiencing up to a 29 per cent rise in some areas. Shockingly, certain retailers have decided to burden consumers with an even higher increase of 50 per cent. However, switching energy providers presents a viable solution, offering potential savings of up to 31.5 per cent in specific areas of NSW.
The financial benefits of switching plans are substantial. Households across the state could save a minimum of $466, while those in regional NSW could pocket as much as $714 by choosing a retailer that has deferred their price hike until later in the year.
These potential savings come as a much-needed relief, considering the findings of Compare Club’s recent Bill Stress Index. The index reveals that 21 per cent of Australians are struggling to make ends meet, yet only 20 per cent have switched their utility bill providers. Utility bills, including energy costs, rank as the second biggest source of stress for Australian households, trailing only behind mortgage payments.
As winter deepens, bringing with it higher bills, the unwelcome surge in energy costs on July 1 further exacerbates the financial strain on households. The Australian Energy Regulator (AER), responsible for setting the DMO in NSW, South East Queensland, and South Australia, announced in March that residential customers on standard retail plans should brace themselves for price increases ranging from 19.5 per cent to 23.7 per cent. However, the opportunity to switch providers and capitalize on substantial savings remains open for those willing to take action.
Expert tips for saving on energy bill
Shop around for a better deal
In order to maximize savings, it is crucial for customers to actively explore their options and secure the best possible deal. Financial marketplaces such as Compare Club provide a valuable platform for switching providers, unlocking substantial discounts, and shielding individuals from the impending price rises. By taking advantage of these opportunities, consumers can take control of their energy costs and potentially save a significant amount.
Enter a fixed-rate agreement
One effective strategy for managing energy expenses is to enter into a fixed rate agreement. This entails signing a contract with an electricity supplier that guarantees consistent rates for a specific period, usually one or two years. By locking in today’s electricity rates, customers can avoid multiple instances of price fluctuations, which often involve increases. This provides a sense of stability and certainty when planning budgets in advance, helping households maintain better control over their finances.
Look into bill smoothing
Bill smoothing, also known as an instalment payment plan, is an option worth exploring. Some utility providers offer this service, allowing customers to arrange fortnightly or monthly payments instead of paying the entire amount in one go. This approach proves beneficial for households as it helps them manage their budget more effectively. By spreading out the payments, individuals can avoid financial strain and better align their energy expenses with their overall financial situation.
“Seeing energy prices being dramatically increased across New South Wales will be extremely jarring to many households already struggling with the cost of living, but the good news is that there are significant savings to be had for people who are proactive to shop around, ” says General Manager of Utilities at Compare Club, Paul Coughran.
“There’s no escaping the price rise – and we’ve already seen most big energy retailers confirm price hikes of between 21 per cent and 30 per cent, and even 50 per cent – but there is a silver lining. The increase in the Default Market Offer means that retailers have more leeway to offer significant discounts to new customers.
“There’s been slim pickings in energy pricing over the past 12 months, but there are some seriously good discounts available if you know where to look. We know energy bills are a big stress, but when we look at the pricing from our partners, there’s no reason any Australian household should be overpaying for energy this winter.
“This is exactly why it’s crucial for consumers to explore their options and secure the best possible deal. By switching providers through financial marketplaces like Compare Club, individuals can unlock substantial discounts and protect themselves from the impending price rises.”