Do energy bill discounts confuse you? Here’s what’s been done to help.

Ceyda Erem

20 Feb 2019

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Energy retailers are set to feel the heat with new regulations being imposed on unclear and unfair billing practises.

The federal Government has asked the Australian Energy Regulator (AER) to investigate ‘pay-on-time’ discounts used by both electricity and gas retailers.

This move by the federal government may have come in response to findings in the ACCC’s Retail Electricity Pricing Inquiry, which suggested that energy retailers have made bill discounts unclear and cannot be compared to other offers in the market.  

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“There’s a lot of confusion around bill discounts because you can’t compare them fairly, there’s a lot of inconsistency between retailers. Some may offer you a discount off the entire bill and others are only off your usage charges,” said Mozo Energy Expert, Nathan Warne.

The regulatory body also went on to say that pay on time discounts were ‘excessive’ and, rather than a reward for good customers, were punishments by the retailer for customers who failed to pay their bills on time.

“Being charged more can be especially unfair for loyal customers because there are cases where payment could take a couple of days to go through, like BPAY,” Warne said.

To improve the clarity of offered discounts, the ACCC has recommended that any advertised discounts are to be made unconditional as well as restricting conditional discounts so that they are merely a reasonable saving made by the retailer from meeting the condition.

According to Warne, while this is good news for confused Aussies, more work could be done to help households get a clear picture of just what they’re signing up for.

“It’s a good start, but I also think there needs to be a consistent standard when advertising discounts. More transparency among retailers might make it easier for customers to make sure they’re getting the right energy plan.”

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Putting the power back into the hands of customers

And it’s not just the use of discounts up for debate, as Victorian Parliament is set to abolish standing offers in order to put an end to retailers ripping off customers by as much as $500 a year on their power bills.

This decision may have been a response to recommendations by the ACCC to abolish standing offers entirely and replace them with lower default offers that are no higher than a level determined by the AER.

Standing offers are typically priced higher than market offers, which in most cases, means the energy retailer will have little motivation to help customers find a better value plan.

And that’s exactly the argument made by Victorian Premier, Daniel Andrews.

“We know that our energy market was not working for ordinary hard-working families,” he said.

"The power simply was not with them when it came to determining how they might get the best deal, the best price and the certainty they were not being ripped off by big, greedy energy companies.”

Data by the Australian Energy Market Commission revealed that a comparison between the median standing offer and the minimum market offer left Victorians coughing up around $652 more than they needed to.

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So if you want to take back the power and make the switch to a better value plan, our energy cost crunch calculator not only gives you the option to take discounts out of the equation, but it’ll give you instant quotes from providers in your area. 

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