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Save hundreds on your electricity bill with the flick of a switch, ACCC says

Australians are being warned they could be paying for loyalty to their electricity retailer, with the consumer watchdog saying new customers are scooping up the cheapest energy these days.

The Australian Competition and Consumer Commission (ACCC) said on Thursday that power prices have spiked between 10 and 20 per cent above the regulated safety net recently.

They’re urging households to contact their energy provider and ask if a cheaper plan is on the cards, saying many people are paying more than they need to by setting and forgetting a deal.

“We know that many Australians are likely paying more for electricity than they need to because their recently increased rates are higher than the safety net built into standing offer contracts,” ACCC Commissioner Anna Brakey said on Wednesday.

The ACCC is referring to direct market offers (DMOs) which operate at a federal and state level in Victoria and act as a regulated price for customers who don’t negotiate a market energy deal.

The price of DMOs skyrocketed on July 1 after regulators approved big hikes in response to the energy crisis last year that pushed up business costs substantially.

Paying too much

But the ACCC says many market offers customers are now paying more than the default offer.

“We are seeing evidence of a significant reversal in the role of the safety net price, which was designed as a maximum price to protect disengaged consumers but is becoming a cheaper option for many people,” Ms Brakey said.

“You don’t necessarily need to change [your] energy company to get a better deal – the simplest thing you can do is to contact your existing company and ask how your current plan compares to the regulated standing offer.”

The ACCC said it had seen letters recently sent to customers from energy companies that said their prices were going up to between 19 and 21 per cent higher than the default offer rate.

An average household on a market deal that has become 21 per cent more expensive than the default offer can save about $400 a year just by moving to the standing offer, the ACCC said.

Those who instead move to a cheaper market offer could save up to $600 a year.

“The government safety net price for electricity is there to protect you, and you should not be paying more than it,” Ms Brakey said.

“We know many Australians are currently struggling with high energy prices and broad cost-of-living increases, so it is worthwhile to set aside some time this week to call your energy company and ask if a cheaper plan is available.”

How to lower your bill

The ACCC says you might want to consider moving to a new retailer because the best deals appear to be reserved for new customers.

“We strongly encourage households and small businesses to use the government comparison sites Energy Made Easy and Victorian Energy Compare to find a better offer,” Ms Brakey said.

“Moving to a cheaper plan through your existing energy company is the easiest way to save money right now, but there can be greater savings available for those who are willing to switch.”

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