The ACCC is urging consumers to shop around or at least to contact their electricity provider to ask if a cheaper electricity plan is available, following a decline in retail electricity prices in 2024 that many households are not currently benefiting from.

More than 80 per cent of Australian households in the National Electricity Network (NEM) could move to a cheaper electricity plan if they shopped around or contacted their electricity provider, the ACCC’s latest electricity inquiry report has found.

Despite the price of electricity falling between 1 August 2023 to 1 August 2024, many households remain on offers priced above the government safety net price meaning they are missing out on lower prices.

The government safety net price is the price consumers are charged if they have never shopped around for another price. They also serve as reference prices to make it easier to compare plans in the market.

“If you haven’t changed electricity plans in the past 12 months, chances are you are paying more for your electricity than you need to,” ACCC Commissioner Anna Brakey said.

The report found that households on offers which are more than a year old are paying $238 more per year than households on newer offers. It also found that the size of this ‘loyalty penalty’ increases with the age of the offer (when examining three years of flat rate offer prices).

Residential customer weighted average annual prices for newer and older offers by region, all offer types combined, assuming 100% achievement of conditional discounts, 2024  

Source: ACCC analysis of retailer pricing data. Nominal dollars, including GST.

“We are urging Australians to take some time this holiday period to have a look on the Energy Made Easy or Victoria Energy Compare websites to see if there is a better plan,” Ms Brakey said. 

“Alternatively, people could simply call their retailers to see if they have a better offer available. We know that customers that haven’t done this in a while are probably paying too much.”

“Further, it is important to read your electricity bill when it comes. Every three to four months, electricity companies are required to tell you on your bill if a cheaper plan is available. If you get this message, you are paying more than you need to,” Ms Brakey said.

Proportion of residential customers receiving ‘Better / Best Offer’ messages, all regions combined, from 1 January 2024 to 10 August 2024

Pricing in the retail electricity market is becoming more complex as more customers are on time of use or demand tariffs. There are also more customers on offers with multiple complex pricing elements, who may find it challenging to respond to these complicated price signals.

The report found that customers on time of use offers have lower calculated annual prices on average than flat rate offers. However, customers on demand offers had higher calculated annual prices, with 51 per cent of these customers on offers priced at or above the government safety net price. Customers on demand offers are not subject to the protections of the Default Market Offer.

“The increasing complexity in pricing as the smart meter rollout continues, presents a real challenge to consumers who are trying to reduce their electricity bills,” Ms Brakey said.

“While we are pleased that compared annual prices have decreased from 2023 to 2024 and more consumers are on offers below the government safety net price, a substantial proportion of households remain on prices above these levels,” Ms Brakey said.

Proportion of residential flat rate offer customers without demand paying more, equal to, or less than the government safety net price (DMO/VDO)

What consumers can do

Consumers should compare their current rates on the government comparison sites www.energymadeeasy.gov.au (for consumers in New South Wales, South Australia, Tasmania, the Australian Capital Territory and Queensland), and compare.energy.vic.gov.au (for consumers in Victoria).

If customers don’t want to or can’t shop around, they can call their existing retailer and ask for a better deal. Their retailer is legally required to provide that information, as well as information on how the price compares to the government safety net price.

Consumers should read their electricity bills, because the retailer is required to let them know, every 100 days (or every 4 months in Victoria) through a statement on their bill, if a better deal is available.

Customers should also check with their retailer or on energy.gov.au/rebates, to ensure they are receiving all eligible concessions and rebates available to concession card holders.

The full report, which also covers information about electricity retailers’ costs of supply and margins in 2023–24, is available at Inquiry into the National Electricity Market report – December 2024.

Background

Our retail pricing analysis presents customer-weighted calculated annual prices for flat rate, time of use and demand offers based on usage assumptions from the government safety net price. We present most of our results assuming customers achieve conditional discounts. Our results do not incorporate government rebates or solar feed-in tariffs.

In 2018, the Australian Government directed the ACCC to hold an inquiry into the prices, profits and margins in relation to the supply of electricity in the National Electricity Market (which covers NSW, Victoria, South East Queensland and South Australia).

This is the twelfth time the ACCC has reported as part of this inquiry.

The ACCC is also responsible for monitoring compliance with the provisions introduced by the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act, which is to ensure that any sustained and substantial reductions in retailers’ input costs are passed on to consumers, as well as provisions prohibiting specific conduct in the spot market and hedging contract market.

The report is available on the ACCC’s website at Electricity market monitoring 2018-2025.

The ACCC is required to report at least every 6 months. The next report is scheduled for July 2025.