In recent years Australian electricity providers have made it easier for consumers to find and compare companies. Even with that knowledge, plenty of Aussies aren’t asking their providers for a better deal because they feel they don’t have leverage.
But, you do! In fact, depending on your negotiation skills and plan selection, you could save hundreds of dollars.
Default (Standard) Contracts vs. Market Offers
If you haven’t changed your Australian electricity provider in a while, you’re likely still on a standard contract. Anyone who is currently on a standard plan is paying the maximum a retailer can legally charge you.
However, market offers are contracts designed by energy companies that provide their consumers with competitive rates, bill credits, discounts, and incentives.
As of July 2019, many Australians also have access to the Default Market Offer (DMO) in New South Wales, Queensland, and South Australia or the Victorian Default Offer (VDO) in Victoria.
While these offers are lower than default contracts, they’re higher than market offers because they’re government-regulated and thus, don’t provide the consumer with discounts.
How to save money: If possible, immediately switch to a market offer contract to save hundreds of dollars a year.
You won’t even have to switch providers most of the time because every Australian company usually has a market offer cheaper than their default contracts.
Understanding Reference Price vs. Default Market Offer
You may see electric companies use reference price and Default Market Offer (DMO), but they mean the same thing. Be aware that some companies may try to confuse you by using both terms.
For example, if you call your electricity provider and ask what the DMO is in your area and they answer with “the reference price is $1,716,” they are referring to the same number.
How to save money: Although it can be stressful to get accurate price information from customer service staff, know that this is a tactic they use to fool people.
If you’re up on your terms, you’ll find the deal you want. Don’t settle for a company because you’re frustrated.
Do Your Homework Before Calling Companies
Electricity companies love consumers that don’t research because they can offer you a higher rate than their competitor. They may also give you a rate that isn’t actually their cheapest or won’t provide the best coverage for the cost.
To find the cheapest rates, you have to find them yourself. Compare electricity plans and prices in your state to know how much you’ll save.
How to save money: While searching for different electric companies, pay attention to the price the company is offering and what is offered in that package.
Maybe one company is offering $1,000 for their basic plan, but if another is charging $1,200 for an upgrade, that could be worth it. Know what you want from your electricity company and make that your focus. In addition, you may consider asking an electrician to inspect and/or repair your home’s electrical system and assess its overall energy-efficiency. You will need a level 2 electrician Wollongong for overhead and underground cables.
Speak to Your Electric Company Before Leaving
Switching your electricity over is a hassle, so always speak to your current company before jumping ship. You’d be surprised what an electric company is willing to do or pay to keep you as a customer.
When you feel you’re well researched, make a call to their customer service team. Then, start the conversation by explaining you found a better deal than what they’re providing.
How to save money: Before the negotiation, make sure you have a clear mind.
Depending on the price difference, your electric company will try to say they can’t offer that kind of discount. Immediately tell them that you’ll leave and see if they will try to match that deal or go lower.
If you’re sure you want to leave, explain you’ll stay if they can offer a deal that’s less than the discount you found. They’ll agree as long as this amount doesn’t go beyond their limit.
Ask Your Provider for Their Best or Cheapest Offer
Sometimes negotiations won’t go anywhere, and that’s okay. It doesn’t mean you failed to get the best offer; it could just mean that the discount you found is beyond their limit. If you still want to stay with the company, ask about the best or cheapest plan.
Companies will withhold “secret plans” and only give them out to people who ask for them or threaten to leave.
How to save money: At this point, you may want to switch over to the other electricity provider if their offer isn’t good enough. Or, you could avoid the added cost of set-up. It’s up to you.
