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The Cost Of Switching Electricity Providers

12 Mar 2022

While it technically doesn’t cost a thing to swap electricity providers, many unsuspecting consumers have fallen into the trap of predatory short term deals.

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The price of your power bill is linked to a wide variety of factors such as your local climate, how many people you live with, what types of appliances you own, and even the tariffs provided by your electricity supplier. While no two power bills are ever quite the same, if you’ve found yourself noticing that your power bill is more expensive than it used to be – you’re not imagining things. 

Utility residential electricity prices have risen steadily in the last decade. According to a recent report conducted by the Federal Government, the average household energy debt for gas and electricity has increased 12% from $897 in 2019 to 2020, to $1,000 in 2020 to 2021. Even more concerning is the fact that the average electricity debt for a customer upon entry into their retailer’s “hardship” program grew 21% over the same period, from $1,304 to $1,584. 

While many saw solar power as the solution, this alternative isn’t viable across the board. Not everyone is in the position to shoulder the up front costs associated with it’s installation, while renters aren’t in the position to have such a choice. Sick of feverishly monitoring their power consumption at the cost of their lifestyle, many people opt to swap electricity providers as a means to spend less – but is it really a good idea or not?

What To Know Before Swapping Electricity Providers

Above all, it’s important to determine your households power needs before making the decision to swap electricity providers. Are you satisfied with your current services, with the only exception being the price? Would you prefer a dual provider who can cover both your electricity supply and your natural gas connection? Do you want a standard contract that cannot be changed by the retailer, or a market contract that has varied terms and conditions and may cost less? 

Depending on which state or territory you reside in, your options for electricity providers can be as limited as choosing between just two separate suppliers. Different tariff rate types apply and vary depending on your postcode, and the type of meter you have at home with the types of charges listed on your bill usually including the following – 

Daily Supply Charge –  This is the amount you pay to be connected to the electricity grid. Also called the “service to property” charge, fixed charge or service charge, these are generally shown on your bill as a daily rate. Daily supply charges are not based on how much energy you use, try to think of them as a fixed service fee. 

Usage Charge – Otherwise known as the consumption or variable charge and is the charge for the electricity you use, your usage charge will appear on your bill in cents per kilowatt hour (c/kWh). Unlike the daily supply charge, this is a variable cost that will reflect how much or how little electricity your household is using. 

If you’re on a mission to pay less on your power bills via opting for a new supplier, it’s important to note that how you’re charged does vary depending on the operator. Electricity providers will often charge power consumption based on time of use (peak, shoulder or off peak), or at a flat rate. While the former has fluctuating prices based on how many people are at home using power at any particular time of the day such as early evening, the latter is usually a median rate that is lower than peak usage charges. 

As a consumer, it’s important to be wary of comparison websites that filter options for electricity providers. Keep in mind that particular products or providers may be promoted or recommended more heavily than others because of commercial arrangements. To the unsuspecting customer looking to swap electricity providers, many fail to read the fine print when it comes to extremely cheap introductory offers, but are shocked when they discover that these are often only twelve month contracts. After the introductory period ends, the tariffs go up in price and can land a customer in a more expensive contract than the one they originally had before the swap. 

To avoid getting caught out, look for electricity providers who are able to offer favourable rates over longer periods of time. While consumers do usually have the option to exit the contract after the introductory period, unless you’re willing to swap electricity providers every twelve months or so, you may be better off staying where you are or negotiating directly for a loyalty based discount. Remember that electricity providers are ultimately run as businesses – and brands of this size not only want to attract new customers, but to retain their existing ones as well. 

How To Save Money On Your Monthly Bills

Kyco is a member based buying group that ultimately aims to save Australians money on their energy, health and insurance bills. The more members we have, the more negotiating power we have to arrange low, long-term deals with service providers.

Kyco doesn’t play one provider off against another taking commissions of up to 30% like most comparison sites. Instead, we’re leveling the playing field with a low 3% capped commission. It’s free to become a member, and with no lock in contracts or unexpected price hikes, spending less on your annual bills has never been easier. 

To be amongst the first to revolutionise how much ordinary households should be paying for bills, join us today and help make the cost of living more sustainable for everyday Australians.