Are prepaid energy plans the answer to Australia’s high energy bill strife?
In an idea borrowed from your mobile phone bill, prepaid energy plans just might be the newest solution to rising power bills, designed to help customers better manage their electricity use and budget.
Energy giant AGL has recently launched a new prepaid bill option, which allows customers to pay for their electricity upfront in weekly or monthly installments. These smaller, more frequent payments are designed to help spread out the expense of a power bill, in order to give Aussies better control over their budget.
Customers signed up to the prepaid option can also track how much energy they’ve used through a mobile app, so they can keep an eye on how close they are to reaching their credit limit.
A customer's credit doesn’t expire, just rolls over to the next month if it’s left unused and there’s no risk of suddenly being cut off if the credit runs out - instead, if their balance hits zero, customers are rolled onto the standard variable rate plan on a “post-paid” basis.
“Pre-paying your power bills could be a useful tool for Aussies struggling to meet large lump sum payments each quarter, provided the rates on offer are a competitive deal,” said Mozo Director Kirsty Lamont.
“It minimises the risk of bill shock, since you're dealing with smaller payments more often, plus you’ve got the opportunity to monitor your power usage and how it fits into your budget, instead of scrabbling to pay an unexpectedly high bill after the fact.”
At the same time, some mobile and broadband providers are beginning to move the other way by entering into the energy retail space. Amaysim has already made the move, launching its energy plan offers this year and if Morgan Stanley research is to be believed, others - including big player Telstra - may follow.
According to analysts, some of the benefits for Aussies could be price discounts when they bundle mobile, broadband and energy together, as well as the convenience of dealing with only one provider for all these services.
But Lamont cautioned that some Aussies may risk falling into the “lazy tax” trap.
“The danger here is that if people decide to get their energy plan from their mobile phone provider simply because it’s easy, they run the risk of paying too much for the convenience. It’s important to compare your energy options and make sure you’re only choosing the easy option if it's not going to break your budget,” said Lamont.
In fact, no matter which energy provider you’re with, regularly reviewing your setup to make sure you’re still getting the best value is a great habit to form. So get started today by comparing energy plans for your area.