Origin Energy’s Predictable Plan: Is this the future of power pricing?
With a warmer than usual autumn predicted and winter on its way, lowering the household energy bill is top priority for many money savvy Australians like you. To make sure you never have to worry about bill shock again, Origin Energy has launched the Predictable Plan, which could be the next game changer in the energy market.
But does this new plan make sense for your home or should you look at it with a dash of caution? Read on as we talk about the plan’s key features, pros and cons and how it stacks up against some of the existing billing options available with other energy providers.
What is the Origin Energy Predictable Plan?
Origin Energy’s Predictable Plan marks the end of of nasty bill surprises because it allows you to pay a fixed amount for your energy usage for a period of 12 months no matter how much energy you use. The plan is available for electricity, natural gas or both and also comes with green energy options. You can choose to pay this fixed amount every month or fortnightly.
How’s the fixed amount calculated?
Origin use data from three months of billed usage at your current address and information provided by you about how you use energy at home to calculate the fixed amount you’ll need to pay through the year.
Who can apply for the Predictable Plan?
Since you need three months of billing history at your current address to determine how much you’ll pay, the plan is only available to existing Origin customers.
If you’re not an existing customer, but want to sign up for the Predictable Plan you first need to sign up for a usage-based plan and after you’ve been billed for the minimum required period to calculate the fixed amount tailored to your usage patterns, you should be able to switch to the Predictable Plan.
Pros: Why switch to the Predictable Plan
- Your energy cost will remain fixed even if there is an energy price rise
- You won’t experience any more bill shock even during high usage periods, such as winter, because you’ll pay the same amount no matter how much energy you use
- It makes household budgeting easier knowing what your energy bill is going to be
- There’s no exit fees! So if you’re not happy with the Predictable Plan, you can change to another plan any time
Cons: Why it may not work for you
- If you use less energy than what’s predicted, you’ll still end up paying the predicted charges. So say you’re going off on a holiday for three weeks, you’ll still have to pay for energy that you won’t even be using
- You won’t benefit from any energy price drop
- It’s only available for direct debit customers
How is the Predictable Plan different from bill smoothing?
Bill smoothing refers to a payment cycle where instead of receiving quarterly bills, the energy company gives you the option to spread estimated power costs across equal monthly, fortnightly or even weekly installments. These installments are based on your usage history and your account is reassessed every few months to check if your consumption has been over or under what was estimated. Based on this review, and if there are any changes in the market energy rates, your payments are readjusted if required.
The Predictable Plan on the other hand is not subject to any market changes and does not change the fixed installment no matter how much energy you use.
How is the Predictable Plan different from a fixed rate energy plan?
While a fixed rate tariff plan fixes the unit cost of gas or electricity, you still get billed based on your actual household usage. So for instance, in winter you’ll have a higher bill if you consume more energy for heating up your home. Fixed rate contracts are also generally locked in for a longer duration, say 2 years, and usually have an exit fee if you switch before the fixed period ends.
With the Predictable Plan your bill is fixed no matter what time of year it is and there isn't an exit fee.
The launch of innovative pricing offers like the Origin Energy Predictable Plan sparks further competition in an already competitive energy market. This means that you can look forward to other energy providers launching new offers as well, leaving you with a lot more choice and saving options.
So to stay tuned with what other big retailers like AGL and EnergyAustralia come up with next to pique your interest, and to compare some of the best gas and electricity plans for your home, check out Mozo’s free online energy comparison tool and the latest news in the energy sector.