July is over, so that means that the Default Market Offer (DMO) and Victorian Default Offer (VDO) may have changed, and this means that energy retailers may have also changed their prices. These price changes mean over 700,000 families and businesses can potentially save hundreds and thousands in yearly energy bills. For consumers in VIC, NSW, QLD and SA, your energy providers will have new information sent out regarding their energy tariffs and plans. Now is the best time to be looking around at different offers from different electricity retailers to see which one benefits you the most and allows for the most savings.
Every year in July, there is a change in energy costs. The Default Market Offer (DMO), as the AER Chair Claire Savage puts it, “acts as a safety net”, for Aussies to access the essential service at a primary cost. Energy providers then adjust their rates and tariff plans in accordance. As Savage suggests, shopping around for better energy deals is an excellent start as most retailers are bound to have cheaper deals for those who look for them.
If you are unsure about your energy plan, then chances are you are on a standing offer contract from your energy provider. Compared to the market offers, standing offers see changes in pricing every six months, while market offers can be priced differently before your next billing. A standing offer is the absolute capped amount of energy. Looking for better deals can mean hundreds of dollars in savings on your energy costs. So, why do energy rates change?
From the plant where the energy is generated to your fingertips when you turn ON the switch, your power has to travel through four main stages, which will define your energy cost.
- The cost of purchasing the electricity and gas from the producers/generators – wholesale cost.
- The wires, poles and pipes for the transmission and distribution of energy along with their maintenance and metering which is charged by the distributors – network cost.
- Other costs your energy provider incurs such as complying with government plans like the Renewable Energy Target.
- Lastly, the retail amount charged by your energy provider- retail cost.
The fluctuation and changes in these areas impact the energy rate and your overall energy cost and savings.
Your energy bill is a sum of the usage rate along with the supply charges. The usage charge is for the energy consumption, and the supply charge is for the service providers who put the infrastructure to transmit that energy to your houses and businesses.
The energy market is a competitive landscape. For consumers, this means that better prices might be just around the corner. Comparing energy prices from different retailers along with the details of their plans: the perks, conditions, and discounts can save an average household roughly $116 and a small business $441 in annual energy spending.
How to find the best energy deal?
Select and Switch can help you, by working on your behalf to bring you great deals and offers from leading retailers of energy services such as electricity and gas, as well as telecommunications, cyber security, fuel cards, solar, and more. Select and Switch will help to clear the confusion of finding a better offer, by understanding your usage and needs, and then providing you with the best solution from our panel of partners.