If you were given the option to pay a higher, or lower rate for your electricity, and there were no strings attached for paying the lower rate, which would you choose?
What Is Energy?
Unlike cars, clothing or accessories, energy is two things:
1. An essential service - it is essential to our survival and standard of living;
2. In most cases, a homogenous product - whether it is purchased from energy company A, B or C, it is the same thing.
Only 15% Of Australians Are Paying Less Than They Need To
As Martin asked earlier, if you were given the option to pay a higher, or lower rate for your electricity, and there were no strings attached for paying the lower rate, which would you choose? At a guess, the majority answer would be, pay the lower rate.
Sadly, the data suggests that only 15% of Australians are paying less than they need to for their energy bills, and the remaining 85% could save on average, at least one monthly bill, up to one quarterly bill every year (Source: energy bill review campaign conducted by YourPorter).
These numbers may sound staggering and the reality is, they are. In the key issue statement of the Australian government’s 2019 report, 'Australia’s cost of living over the last decade”, it opens with 'recent increases in the cost of domestic electricity and gas…reignited concerns around the increasing cost of living in Australia'. The bottom line is, electricity and gas are essential services and the increase in cost to Australian homes for these services, is highly concerning to the government.
The report showed that in the ten years between 2009 and 2019, the cost of electricity had doubled (increase of 100.9%) as in table 1 below, coming second only to tobacco. Gas (along with other household fuels) was not too far behind in fourth position with an increase of 75.6% in the ten-year period. If we were to put this in monetary terms, in 2009 what would have cost $100 for electricity and $50 for gas, would’ve cost $200 for electricity and $87.50 for gas in 2019.
With electricity prices doubling in the last ten years, we must ask if this trend is likely to continue. We can hope that it doesn’t, but there is little we can do as the consumer, to change how much we are charged by the energy retailers.
What we can do is be more aware of how much we are paying and what else is available, but navigating energy providers and their many plans, can be confusing, difficult, or both.
So What Are The 15% Doing That You Are Not?
It is likely that many of them are reviewing their bills at regular intervals to keep their current provider/s in check. There is not a lot of value in scheduling this exercise every three, or even every six months, but at least once every twelve months. The ten minutes it takes to save one monthly, or even one quarterly bill, is time well spent.