How to get the best deal with your energy provider

Just like petrol, the price of energy changes over time. Here’s how to get the best deal for your hard-earned dollar. 

This may seem a bit like a school lesson but bear with us, if you understand energy and how your home uses it, it can save you big time.

Types of plans

In Australia, there are two types of energy plans: market retail and standard retail plans.

Market retail plans

Prices under market retail plans are set by the energy provider and can change at any time, even just after you’ve signed up. In some states, the retailer doesn’t have to inform you of these price changes until the next bill. That said, these types of plans often include discounts or incentives for conditions such as paying on time, paying by direct debit or bundling gas and electricity.

Standard retail plans

Prices on a standard retail plan, on the other hand, have terms and conditions which are set by the law. They are typically more expensive but provide more security — the prices can only be changed once every six months and your retailer needs to notify you within 10 days on their website and on your next bill. They don’t have discounts but there is a minimum amount of time before your energy will be cut off if you don’t pay your bills.

How do you consume energy? Picture: Getty

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Understanding tariffs

Tariffs are essentially the way we get charged for our energy so they’re vital to understand if you want to be charged less.

There are three common types of electricity tariffs: single rate, time of use and controlled load.

Single rate

Are you mostly home in the evenings Monday to Friday and is this when you typically use your appliances? Then a single rate tariff may be for you.

Single rate tariffs — also known as flat rate, standard rate, anytime rate and peak rate, just to be confusing — are plans where the user pays the same rate regardless of the time of day. The rate tends to be lower than the ‘peak’ rate of a time of use tariff so they’re usually a good plan for people who are home a lot in the evening midweek. 

Time of use

Time of use tariffs are just that, rates that change depending on your time of use. Peak times, where electricity is the most expensive, usually apply in the evening on Monday to Friday. Off-peak rates usually apply overnight on Saturday and Sunday, and shoulder times are everything in between.

Time of use tariffs may be a good option for people who tend to be out during peak rate times in the evenings, and home at low peak times during the day or on weekends.

Caveat: to qualify for a time of use tariff, you’ll need a meter that measures your electricity usage at different times of the day, like a smart meter.

Controlled load

For some appliances — like underfloor heating and electric hot water systems — you can be charged a controlled load tariff whereby the retailer charges a separate rate for that appliance and the energy it uses. Often that appliance has its own meter.

It is usually only for appliances that run overnight or in off-peak times. So controlled load rates are usually lower.

Do you wash your clothes in the day or night? Picture: Getty

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When it comes to gas, it’s more simple. Gas tariffs are a single rate tariff but you’re typically charged in tariff blocks. This means you pay a certain amount for the first part of your usage and a different rate for the next part (or parts). Some plans have seasonal rates, making them typically higher in winter (*cough* when you’re cold and cranking the heating… and sick, by the sounds of it).

Discounts

The most common discounts on offer include:

• Pay on time discount—when you pay the full amount before or on the due date. 
• Direct debit discount—when you allow the provider to take a payment straight from your account.
• Bundling discount—when the same retailer services your gas and electricity. 
• Paperless billing discounts—for customers who opt for email-only bills.

If you know you’re organised and will always pay on time, are happy to file your bills digitally or find a good gas and electricity plan, choosing a plan with conditional incentives could save you money.

Just be sure to find out if the discount is taken off the total bill amount or just the usage charge, and if it’s cheaper than simply choosing a plan with a lower tariff.

Some plans may also offer a ‘benefit period’ with incentives for a certain period of time. Typically this will be a discount or reduction in price for a length of time but they can include other incentives such as movie tickets and magazines. For example, you might get 10% off your total bill amount for 12 months. After 12 months, you’ll still be on the same bill but you’ll start paying the full amount.

Fees

When it comes to energy, other fees to keep an eye out for include:  

• Account establishment fee—when you enter into a new plan.
• Late payment fee—when you do not pay your bill on time.
• Disconnection fee—when your energy gets cut because you did not pay your bill.
• Reconnection fee—when you want to get your energy turned back on again after it was cut.
• Exit fee—when you want to get out of a plan early. This might also be called an ‘early termination’ or ‘cancellation’ fee

Knowing your energy habits will help you to choose the best plan. Picture: Getty

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Choosing a plan that’s right for you

In Australia, the federal government has been investing heavily into delivering a more affordable and reliable energy system as we transition to a lower emissions future. As a result, energy prices are changing so it’s important to keep on top of your energy usage and charges and shop around for the best deal.

The government website, energymadeeasy.gov.au allows you to easily compare your current bill with alternatives to help you find a cheaper plan. It also provides a tonne of information on ways to reduce your energy consumption to save our planet and your pocket.