Energy providers are telling customers to switch: Is yours next?
ReAmped Energy has sent out a letter to more than 70,000 customers to go elsewhere or watch their bills double.
Soaring wholesale electricity prices have hit Australian energy retailers hard. They're being left with no choice but to pass on costs to customers.
One such example is ReAmped Energy, one of the fastest-growing energy providers in the country since 2019. It's been popular among Aussies for offering competitively-priced power plans.
However, in a letter to over 70,000 customers, it said it could no longer help people save money.
"...We are in the unpleasant position of advising customers that they can get better prices with other providers, and they should seek them out as quickly as possible," said ReAmped Energy CEO Luke Blincoe, in a media release.
ReAmped Energy says it isn't going out of business and will continue to "serve customers that remain with [it]".
Other providers impacted by soaring prices include Discover Energy and LPE in Queensland. We'll be seeing the full extent of price changes to all customers in the next few months, either before or after the annual 1 July energy price reset.
Why are energy prices skyrocketing?
According to the Australian Energy Market Operator's latest report, wholesale electricity prices have more than doubled in the last 12 months due to the situation in Europe and demand at home driving up coal and gas prices.
Given wholesale prices make up 30-40% of a customer's energy bill, there's no avoiding the impact of rising costs on your energy bills.
On top of this, the Australian Energy Regulator said it was going to raise the benchmark set for power prices, with changes to come into effect from 1 July.
This tariff is also known as the Default Market Offer. Here's a look at how different states will be impacted:
- New South Wales. Price increase by 8.5% to 18.3%
- Queensland. Price increase by 12.6%
- South Australia. Price increase by 9.5%
In Victoria, the state's Essential Services Commission determines its own default offer and said it was raising the price cap by 5% which is much lower than the other states.
In light of everything that's happening in the energy market, every Aussie needs to assess their bills, look out for communications from their power company, shop around and lock in a good energy deal before all hell breaks loose.
If you haven't switched energy plans in a while, here's what to watch out for
Switching energy plans can be daunting for most, especially if you haven't taken a run at it for a long while.
However, it can also be easier than you think as long as you know how to get started and what to look out for.
1. Discounts
Energy plans will be presented to you a little bit differently from each provider. The first thing you should look out for is the discount.
For example, it could say 22% less than the reference price or it might frame it as 20% discount guaranteed.
They both indicate the same thing which is the difference from the reference price, a benchmark set by the government to help you see how good a plan is at a glance.
In Victoria, this is called the Victorian Default Offer (VDO).
You could also look out for additional perks and sign-up credit. Some of the best offers include:
- AGL: Up to $150 credit and more savings when you bundle. Sign up here.
- EnergyAustralia: Get up to $100 credit. Sign up here.
- Origin Energy: Earn 10,000 Everyday Rewards points and save with bundles. Sign up here.
2. Variable vs fixed rate plans
You'll come across 2 main types of energy plans when shopping around: Plans with no contract term or a fixed plan that has a benefits period.
If you find a good deal, it could be worth locking in a plan with a 12-month benefit period.
Some fixed-rate plans do exist but they're fast disappearing. If you're looking to escape the volatility in the energy market, it could be good to move fast and lock one in.
Most come with a 12-month fixed-rate guarantee so you can rest easy for a full year.
Some options include:
- Red Energy's Living Energy Saver Plan (NSW, ACT). Read our review.
- Origin Energy's Origin Go plan (NSW, VIC, QLD, SA, ACT). Sign up here.
- Tango Energy Home Select plan (VIC, SA). Read our review.
Compare all energy plans on Finder to find the right deal for you and your household.
3. Disconnection fees and other costs
You could be charged a disconnection or reconnection fee by your energy provider when you're moving house.
If you're a renter and will be looking to move homes over the next few months, then this cost will be especially important to you.
Before switching energy plans, find out how much the provider plans to charge for this. Compare costs before confirming your choice.
You don't want to pay over a $100 in disconnection fee when another retailer is offering it for $12 or so.
Before you switch make some calls
Don't shy away from calling your current provider. It could be that it will give you the option to move to a cheaper plan which could save you the hassle of switching.
However, make sure you ask whether the rates will change in the coming weeks given energy prices are going to reset from 1 July.
Second, before switching to another provider, ask questions about any fees that may not be clearly stated on a plan. For example, does it charge for meter reads?
Bottom line: If your provider says it's hiking up your bills by 10-15%, it's time to switch.
Thinking it's time to switch? Compare energy plans on Finder and lock in a better rate.
