Hundreds of thousands of Aussies will save on their power bills thanks to new reductions to base power prices set by the energy watchdog.
More than 750,000 Aussies in NSW, Queensland and South Australian on standing offers will see more than $100 shaved off their annual power bill from 1 July 2019.
The Australian Energy Regulator (AER) has lowered the default market offer (DMO) prices in order to stymie the ‘loyalty tax’ paid by long-standing customers paying high prices, according to AER chair Paula Conboy.
“Standing offers are no longer working as they were intended and this is causing financial harm to disengaged consumers. Our final decision will bring down bills for most people on those offers,” she said.
The savings was part of the Morrison government’s plan announced last October to introduce a ‘price safety net’.
Related story: Here’s how YOU can save up to $832 a year on your power bill
What’s a standing offer and am I on one?
According to Energy Consumer Australia, there two types of energy offers in the market at the moment: ‘market offers’ and ‘standing offers’.
Market offers are designed to be more competitive and offer sign-up incentives to help reduce costs.
Standing offers are the alternative to market offers. They are the default, government-regulated energy deals which don’t include any discount. You’ll likely be on one if you have never switched retailers, haven’t switched in several years, or if you recently moved house.
The idea is that the ‘standing offer’ acts as a safety-net making sure that you get a basic service at a reasonable price no matter what.
Who do the reductions affect?
It only affects Australians on standing offers, which are standard retail energy plans that are often set by the government.
The Aussies that will benefit from the reductions are approximately 758,000 NSW, South-Eastern Queensland and South Australian residents with Ausgrid, Endeavour Energy, Energex, Essential Energy and SA Power Networks.
15 per cent (473,519) of total NSW customers, 16 per cent (214,371) of total SE Queensland and 9 per cent (70,456) of total South Australian customers will see the savings.
How much will I save?
Depending on where you live, here’s how much you’re estimated to get back each year:
Between $129 and $181 for New South Wales (depending on distribution zone)
$118 for South-Eastern Queensland
$171 for South Australia
Small business customers on standing offers will also get to keep more money in the till. Here’s how much they’ll save per year:
Between $579 and $878 for New South Wales (depending on distribution zone)
$457 for South-Eastern Queensland
$896 for South Australia
Conboy urged customers to use the AER’s price comparison site EnergyMadeEasy to find the best electricity
“Market offers are almost always cheaper than the DMO, and shopping around for a deal that best fits the needs of your household or business is the best way to reduce your power bill.
“Our analysis has shown that calling your retailer and asking for a better deal can deliver real savings,” she said.
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