Victorians winning the power bill battle: How can you beat them?
New research shows that Victorians are more likely to switch energy retailers and save on bills.
Victorians are the Australians most likely to switch energy retailers, with around 6.6% of Victorians signing up to a new plan every quarter between 2018 and 2020. This is significantly higher than NSW (4.8%), Queensland (3.6%) or South Australia (4.5%).
Source: AER Annual Retail Markets Report 2019-20A $50 plan-switching incentive offered by the Victorian government during this 2-year period explains some of it, though Victorians have maintained the highest switching rates since 2016.
And while Victorians may switch more frequently, it's actually customers in other states who stand to gain the most by following their lead.
Why the rest of Australia can save more by following Victoria's lead
Reason 1: Victoria has cheaper bills
Here's how the median energy bills for Victorians between 2019 and 2020 compare to other states (averaged across all distributors, for market offers):
| State | Median energy bill (market offer) |
|---|---|
| VIC | $1,467 |
| QLD | $1,694 |
| ACT | $1,723 |
| SA | $1,808 |
| TAS | $2,428 |
| NSW | $1,753 |
Source: AER Annual Retail Markets Report 2019-20
As you can see, Victoria's median energy bills are $200 or more cheaper than any other state and at the same time are switching the most.
It illustrates that customers in other states like SA, Tasmania or NSW have much higher bills and could likely benefit from switching too.
Reason 2: Large gaps between your old plan and new plans on the market
If you are with the same provider for a long period of time, you might be put onto what's called a "standing offer", which is often okay, but it's not the best deal or "market offer" out there.
The larger the gap between a standing offer and a market offer, the more you could stand to save.
| State | Median energy bill (market offer) | Median energy bill (standing offer) | Difference between standing and market offers |
|---|---|---|---|
| VIC | $1,467 | $1,666 | $199 |
| QLD | $1,694 | $1,816 | $122 |
| ACT | $1,723 | $1,937 | $214 |
| SA | $1,808 | $2,051 | $243 |
| TAS | $2,428 | $2,536 | $108 |
| NSW | $1,753 | $2,107 | $354 |
SA, the ACT and NSW have larger gaps between standing and market offers, so if you're in one of these three states, you could benefit a lot by switching.
Reason 3: You aren't happy with your energy provider
When a retailer provides consistently poor service or doesn't treat you fairly, you're more likely to shop around for something better. Here's how complaints from residential customers varied from state to state between 2019 and 2020, which is a good metric of customer satisfaction.
| State | Percentage of complaints by customers |
|---|---|
| VIC | 2.3% |
| NSW | 2.6% |
| QLD | 1.4% |
| SA | 3.0% |
| TAS | 4.3% |
| ACT | 0.7% |
Source: AER Annual Retail Markets Report 2019-20
Victoria falls roughly in the middle as far as complaints go. But, while it may be a contributing factor for Victorians to switch, low customer satisfaction is a more pressing problem in Tasmania and SA – especially when it came to billing (2.7% and 1.7% of total complaints, respectively)1.
1 Source: AER Annual Retail Markets Report 2019-20
There's an opportunity here to switch to a provider with fewer complaints.
Conclusion
Based on this analysis, we can't pinpoint a compelling reason for why Victorians would be more likely to switch than other states; however, there's a chance that there's simply better awareness in the state.
What we do know is that customers in other states – especially NSW and SA – stand to improve their energy situation by comparing options and picking a new provider.
While Tasmanians are also in a very poor spot, the Tasmanian market has little competition and not much in the way of better choices.
Image: Getty
