Small energy providers, big discounts. Time to ditch the Big 3?
Haven't looked beyond AGL, EnergyAustralia or Origin Energy for your electricity plan? It might be time to give the smaller providers a shot.
Finder's research reveals smaller providers are slinging some of the cheapest electricity plans in NSW, VIC, south-east QLD and SA with a difference of as much as $380 a year.
Our exclusive stats come just as the Australian Competition and Consumer Commission (ACCC) reveals its latest report, urging households to contact their energy provider to haggle a cheaper rate or compare plans to potentially save up to $600 per year.
Small energy provdiers vs the Big 3
We compared annual price estimates for electricity plans for August 2023 for a 2-3 person household on a single rate tariff. We used the same postcode for each provider per state.
Our analysis follows changes to the benchmark pricing set across the 4 states by the Australian Energy Regulator (AER) and the Essential Services Commission for VIC. The benchmark pricing is there to help households compare energy plans.
It's known as the reference price in NSW, QLD and SA and Victorian Default Offer (VDO) in VIC.
Keep in mind: Annual estimates can vary household to household so it's best to compare electricity plans for your postcode before signing up with a new provider.
Head to your state to see how the Big 3 - AGL, Origin Energy and EnergyAustralia - stack up against other providers as we list the 10 cheapest plans in our database for your state.
Cheapest energy providers in NSW
In NSW, there's a $380 per year price difference between the cheapest plan in Finder's database and one from the Big 3.
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Cheapest energy providers in VIC
The Big 3 aren't doing too shabbily in VIC - there's a lower $140 per year price difference between the cheapest plan in Finder's database and the one from AGL as you can see from the table.
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Cheapest energy providers in QLD
Interestingly in QLD, there's a $330 per year difference between the cheapest plan from a small provider and one from AGL.
In fact, AGL is the only one from the Big 3 that makes it on our list of the top 10 cheapest plans in QLD.
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Cheapest energy providers in SA
At least 2 our 3 plans from the Big 3 have made in on our list for SA but there's still a $370 price difference between the cheapest energy plan in our database and one from Origin Energy as you can see from the table.
Can I trust smaller energy providers?
When it comes to energy plans, households tend to trust the Big 3 as they've heard of them. It's similar to how you'd trust Telstra, Optus or Vodafone for your mobile plan.
But going with a smaller provider can be relatively low risk. If you're unhappy you can always switch given there's generally no exit fees or lock-in contracts to worry about these days.
The main caveat would be that sometimes the Big 3 can offer extra bells and whistles on their plans. But if you only care about price, a smaller provider should be okay.
"I've been with EnergyAustralia in the past before I switched to GloBird Energy since it was the cheapest plan for my place when I was comparing," Michelle, utilities publisher at Finder said.
Honestly, haven't seen much of a difference by going with a smaller provider. The only thing with EnergyAustralia is that I liked they offered carbon neutral energy after 6 months of sticking with them.
Ask your energy provider for a cheaper plan or compare, says ACCC
Recent letters seen by the ACCC from energy providers to households in NSW, VIC, south-east QLD and SA include eye-watering information on their price hikes:
- These new rates are 21% above the DMO reference price, however, can be 4% above the DMO reference price if you pay on time.
- This Energy Plan is 19% more than the reference price.
- Due to the variation in our rates from 1 July 2023, your plan will be 9% greater than the reference price.
According to the ACCC, the average household on a market offer that is 21% above the reference price could save $400 per year by switching to a standing offer.
The savings can then jump to $600 per year by moving to a market offer that's 10% below the reference price.
Good to know. Market offers are generally more competitive as opposed to standing offers, which act as a safety net for households that don't negotiate with their provider or actively engage in shopping around for an energy plan.
"The government safety net price for electricity is there to protect you, and you should not be paying more than it," ACCC Commissioner Anna Brakey said.
We are seeing evidence of a significant reversal in the role of the safety net price, which was designed as a maximum price to protect disengaged consumers but is becoming a cheaper option for many people.
"We know many Australians are currently struggling with high energy prices and broad cost of living increases, so it is worthwhile to set aside some time this week to call your energy company and ask if a cheaper plan is available."
Compare energy plans for your household so you can potentially lock-in some savings on your household bills.
