You’re paying $807 more for power than you need to
Our electricity market is defective, but that's no reason to spend over the odds.
Despite bluster from politicians, power prices are continuing to rise. Prime Minister Malcolm Turnbull has ordered power companies to send letters to 2 million households highlighting that they may be able to find a better deal by shopping around and ordered them to do so by Christmas.
Three months does seem a long time to draft what should be a fairly simple letter: "We may be overcharging you, why not check?" As a strategy, its effectiveness is questionable. Chances are that anything you receive from your power company that's not an actual bill will head straight to the recycling bin. It smacks far more of a quick political bandaid (find something to blame other than the vacuum that is current energy policy) than a meaningful solution.
However, there's an equally important point to make here: across most of Australia's population, you do have a choice of power suppliers, and it can make a big difference to your bill. How big a difference? On average, there's an $807 annual difference in the cheapest and most expensive plans available for a family of four.
To find that figure, we compared the most expensive and cheapest annual plans available in three states (New South Wales, Queensland and South Australia), averaging six representative postcodes and up to 50 plans in each location. We chose those three states as they had directly comparable data; Victoria has the most open competition of any state, so we'd expect the gaps to be even bigger. You can see the figures for those three states below:
Granted, some states have minimal (Western Australia) or zero (Tasmania, Northern Territory) choice about their power supplier. However, if you do have the choice, you really should compare your available options and make sure you're not paying over the odds.
Yes, it would be nice if we had a mature and sensible discussion about our future power needs rather than the squabbling toddlers' approach that predominates now. And yes, even after comparing you might still feel like power is too expensive. But why keep paying hundreds a year more while Canberra tries to sort itself out?
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on finder.com.au.
- Money Hack: Earn Qantas Points by protecting your business vehicles
- Stop and give-way intersections most dangerous for cyclists
- New on Netflix Australia and Stan in June 2018: Farewell Sense8, we hardly know youse
- Bitcoin and cryptocurrency round-up 25 May 2018
- US regulators going after crypto-market manipulators