Yahoo Finance Energy providers tell customers to switch to cheaper competitors ‘ASAP’
Two small energy retailers are urging their customers to switch to other retailers without delay to lock in better deals in the face of ‘incredible’ volatility in the energy market.
ReAmped Energy, which has managed to attract 70,000 customers since launching in Australia in 2019, has encouraged customers to switch to retailers “ASAP” while there were still good deals available.
The company said it had no choice but to double its prices for customers in the face of skyrocketing wholesale energy costs.
It has also stopped taking on new customers.
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Another new entrant to the market, Discover Energy, has also urged its customers to find another electricity provider because it has no choice but to up its prices.
Wholesale energy prices, which make up around 30-40 per cent of the total bill, have been rising steadily all year, prompting energy retailers to start hiking rates for customers.
“This is an incredibly volatile time for the energy market,” ReAmped Energy CEO Luke Blincoe said.
“We know many Australian households are already facing cost-of-living pressures and we don’t want to contribute to this any more than needed.
“So, 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.”
Don’t delay
Blincoe wanted customers to move fast because there was only a brief window of opportunity to secure a good energy deal before prices would likely start increasing on July 1.
Compare the Market spokesperson Chris Ford said prices would start climbing once the “default market offer” (DMO) offer was introduced to the market on July 1.
The new DMO offers - revealed last week - are safety net prices set by the energy regulator to stop retailers charging unjustifiably high prices.
In the face of high wholesale costs - driven by the war in Ukraine, unplanned generation outages, slowing investment in new capacity and other issues - annual electricity bills are set to rise by as much as $227 for some Australian households on the DMO price.
That means households have a month to secure a better deal before all retailers are likely to start upping their rates.
“Several retailers have already started to pull up the drawbridge so customers need to act fast to get themselves onto a better deal now before it’s too late,” Blincoe said.
“There are still a handful of competitive deals in the market. No one really knows how bad it will get so we want people to act now.”
Brett Mifsud, energy expert at Compare the Market, said smaller retailers were more vulnerable to surging wholesale prices because bigger players have longer-term contracts with generators for greater volume since they have millions of customers.
“They can project how much it will cost to buy electricity that they sell to their existing customer base and new customers,” Mifsud said.
He also said bigger companies also usually own generation assets like wind farms and power stations, which allow them to make long-term purchases.
“Smaller players aren’t able to contract the same volumes, so their prices are higher or they’re purchasing in the spot market, at whatever the current market price is. They have to pass these costs onto their customers," he said.
He also said retailers with a clean energy focus may be better insulated, as the current volatility is largely impacted by coal.
“However, their success still depends on where they are buying from, how much volume they contract from renewable sources, and how good they are at predicting how many customers they can support."
How to found a better deal
Energy customers can access government energy websites to compare energy prices.
Victorians can visit Victorian Energy Compare, while other states and territories can use Energy Made Easy, which is a federal government website.
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