News

NewsHow Power Prices are Completely Changing on July 1

How Power Prices are Completely Changing on July 1

From July 1, power prices in Australia will never be the same again.

The years of discounts as big as 45% in some states, and prices that are some of the biggest in the world, are over.

That’s because the federal government has acted to introduce a new ‘Default Market Offer’, or benchmark bill, for your electricity.

This change will affect millions of Aussies in the switching areas of SEQLD, NSW, and South Australia. And they may yet be copied in Victoria.

THE WINNERS

From July, anyone who doesn’t shop around will be put on this benchmark bill, which would reduce their current annual bills by $115 to $218, depending on where you live.

That’s great news for these people, who make up about 20% of the population in states where you can switch providers.

It’s also great for small business customers who don’t shop around and will save between $453 and $937 for an average business, depending on which state they are in (although why you’d own a small business and not spend some time keeping your bills down, I don’t know!).

But here’s the catch: the new default offer might mean the end of big pay-on-time discounts.

THE LOSERS

In other words, those who DO shop around could pay more in future than they do now.

That’s because currently, those who don’t shop around pay top dollar and they basically cross-subsidise the big discounts for those who hunt down the cheapest plans.

The AEMC and power companies have warned that this could be an unintended consequence of the reforms, which are similar to new rules in the UK.

There, the changes have also driven some smaller retailers out of business.

THE VERDICT

If you’re an on-time payer and you want to lock in a big pay-on-time discount for at least the next year, now’s the time to do it.

And if you’re a do-nothing sort of person, sit tight and wait for your price to drop on July 1 - but note that it still won’t be as cheap as if you shopped around for a market offer.

Join the conversation

FiftyUp Club
How Power Prices are Completely Changing on July 1

Share your views with other members. 

Want to leave a comment? or .
Read our moderation policy here.
Margaret
Margaret from NSW commented:

I am a Click Energy pay on time customer already 35% discount. Can I apply for the higher discount offered on 2 GB. 

gary
gary from NSW commented:

Hi Ian take your pick as to who to vote for I say take all their perks away if they don't perform, it should be performance based don't perform don't get paid. BLOW them UP and start again. 

Peter
Peter from NSW replied to gary:

Sounds like you are talking about politicians. 

Wilfrid
Wilfrid from NSW commented:

I am totally confused. I joined The 50up Club because of the Discounts and pay on time bonus. Yet it seems I was comparing apples with oranges. Why can't the regulators provide some guidance in comparing offers? Wilf 

gary
gary from NSW commented:

We are all still ''LOSERS'' this is a coverup so the government can say that they saved us money Why do this now when people have been in the same situation for years ONLY AT ELECTION TIME get rid of these LIERS holding us to ransom not good enough. 

ian
ian from NSW replied to gary:

Hi Gary, Which liars should we vote for,the big one's or the bigger one's 

Michael
Michael from NSW commented:

what a load of carbage !! until we get rid of the greenies , labour and liberals nothing will change. the sole purpose of these idiots is to bankrupt australia and nothing else. 

Desmond
Desmond from QLD commented:

WE live in far north Qld and our only provider is Ergon energy so it won't relate to us. 

Anonymous
Anonymous from NSW commented:

all that just to confuse further price issue . show up front your prices. 

Anonymous
Anonymous from QLD commented:

As usual the people in rural areas, in my case Townsville, will still have no relief from our exorbitant charges. The meter reading is one that in itself ridiculous. Judy. 

ian
ian from NSW commented:

shopping around is not that hard,but a big discount doe's not mean you will save money.The electricity rates are what you have to compare before you jump in to any so called discounts. sometime ago I nearly swapped suppliers until I looked at their rates out of blind luck and found them to be 5 cents per k/watt higher and now the same company do not disclose their rates until you sign up! This particular provider was on the FiftyUp site. Be careful and avoid contracts if you can . Ian nsw. 

Lou
Lou from NSW replied to ian:

Ian, why not name the provider that refuses to make known to you the rates they charge. U would take the time to contact a couple of government departments to see if this in fact legal. If you sign up with a company like that how do you know what you'll be paying. Bit late once you've signed up. This is a bit like shutting the gate after the horses have escaped. You get the idea. 

ian
ian from NSW replied to Lou:

Lou why not read the so-called deals yourself, or better still get on the blower and shop around like I did,you might be surprised at what you can get as the utilities hate to lose customers. If you have a gripe direct it to the FiftyUp club for putting these so-called "deals' to the people they are supposed to be helping.. Ian nsw 

Peter
Peter from NSW replied to ian:

That sounds just like Click. Offer a great discount, but charge exorbitant prices for their usage rates. 

ian
ian from NSW replied to Peter:

bingo Peter, also another one I think it was called Atlinta or something like that. The main point is the fiftyUp club should be checking these so called deals out before advertising them, and the state government should step in and stop the ripoff called the supply charge. which after 100 years of having the gas and electricity connected what do the suppliers have to do? You can go outside and turn everything off and when your next bill comes there it is the "supply charge " If you want a good deal get off your bum and start ringing around and play them off against one another. Ian nsw 

Peter
Peter from NSW replied to ian:

Hi Ian. I was with Origin and changed to Click to take advantage of the better feed-in-tariff which was available. At the time, the rates and charges were the same as Origin. The first anniversary, Click increased the rates by approximately 80%, however I stayed with them. On the second anniversary, they increased the rates by another 50%. Because of their monthly instalment contract, I never received the "Pay on Time" discount because I was always in credit. Simply put, I had had enough(and they were still promoted by 50up club). I searched the internet and looked at about 25 different plans from several companies where I created an excel document with the rates, charges, discounts and feed-in-tariffs and information pertinent to my situation. I subsequently returned to Origin where I have been for the last 20 months. This time with a 3% pay on time discount and 22cents per kilowatt feed-in-tariff. I keep a daily record of my electricity usage and export in an excel document and use this to monitor my electricity usage. Every three months when I receive my invoice from Origin, I check the invoice against my records and input the information into another excel document which enables me to compare my Origin plan to about 20 other plans. Even with the huge discounts on offer from 50up club (as much as 45%), I am still way in front with my Origin plan. During the last 20 months I have paid a total of $90.92 to Origin and I am currently $121.05 in credit. 

ian
ian from NSW replied to Peter:

Hi Peter, I am the same as you and on the same deal and have not paid an electricity bill since 2012.I was lucky enough or smart enough to install solar panels when the FIT was 60 cents and when we had some money to spare added more panels.I am surprised you don't have a enphase wi fi fitted to your switchboard this will give you an app. on your pc and you would't need to use excel which sounds a little time consuming.Anyway best wishes Ian. ( perhaps more people should follow your lead as solar panels are a lot cheaper now ) 

Peter
Peter from NSW replied to ian:

Ian. I was not financially able to acquire the solar system when the 60cent FIT was about, although I researched a lot, Subsequently purchased Bosch panels made in Germany and SMA inverter, also made in Germany and Australian made tracking system supplied by a reputable solar company on a Green Loan I acquired from a Credit Union. All finalised last year, so now reaping the benefit of free sun power with a good electricity plan. When I am asked, I definitely recommend the investment in residential solar power. 

Anonymous
Anonymous from SA replied to ian:

wow in SA we were unable to fix in a FIT and now its 0.10c I have 16 panels have to pay as we no longer get any credit 

ian
ian from NSW commented:

Hi Anonymous, I am sorry to hear that, with 16 panels you should be able to run your house and get a small credit depending on how you use your appliances and lighting but I don't know enough about the number of people or the size of your house. May I suggest you look up a gentleman called " Finn Peacock " on your pc ,he is a solar engineer and helped me , You won't be sorry and it cost's nothing. Ian NSW 

Gertraud
Gertraud from ACT commented:

You are still saving on electricity since the energy generated while the sun is shining is first used by appliances in the house and only the excess is fed back into the grid. I do agree that the FIT of 10 cents is laughable, but the only way we mere citizens can fight that, is by installing batteries. 

ian
ian from NSW replied to Gertraud:

Hi Gertaud, the cost of batteries at this time is prohibitive . Until they fall in cost it is out of the question. You will find that any excess wattage you produce will go into the battery bank first before you export any kilowatts to the grid which will be virtually nil and to recover the cost of the battery's will take 10-15 years. We are prisoners of the system Ian NSW 

Peter
Peter from NSW replied to ian:

Hi Ian, I fully concur that the price of batteries is prohibitive at this stage. In my particular case, unnecessary. I spoke with a battery installer and supplied my usage and output figures to him. His reply "Forget about batteries as you do not use enough electricity to justify purchasing a battery system. I can sell you a battery system, but you would be wasting your money". 

ian
ian from NSW replied to Peter:

WOW Peter you actually found an honest tradie !!! must be your lucky day ..Ian NSW. 

Lorraine
Lorraine from NSW replied to Peter:

That’s the exact reason I change from Click 

Peter
Peter from NSW replied to Lorraine:

Yes. They suck you in with good offers, then after a while increase the prices hoping you wont notice. 

David
David from NSW commented:

I note that this proposed Default Market Offer is only in the submissions from interested parties stage. I wonder if the default offer suggested is based on what it costs the electricity provider, plus a reasonable profit margin, factoring in the need to maintain and upgrade infrastructure. The pessimist in me says the offer is based on what the providers were prepared to agree to, as long as they have wriggle room to increase profit wherever they can. 

Comment Guidelines
Energy

FiftyUp Club Energy Offer

FiftyUp Club Energy Offer