What is the best way to switch energy suppliers?

WeMoney

If you could switch and save up to $247 per year* on your energy bills with a better deal, would you consider it? And what if we say you can do all of those, including comparing and selecting plans seamlessly at your fingertips, would you feel confident in your decision to switch? Also, did you know that switching energy providers with WeMoney is as simple as 1, 2, 3,? It’s hard to believe, we get that a lot!

Don’t just take our word for it; get all the facts you need to know about how to switch fuss-free to a better deal so that you could potentially save hundreds of dollars.

Let’s get to the following commonly asked questions:

  • Why should I switch?
  • Who can choose their energy provider?
  • How should I go about switching?
  • What should I look for in an energy provider?
  • How long will it take to switch to a new energy provider?
  • How do I switch?
  • Do energy providers check my credit score? And, will this affect my score?
  • Will a utility company refuse to take me on as a new customer if I have bad credit?
  • Do I get charged if I change my mind after switching?
  • What are some of the common myths about energy switching?
  • What if I do switch?
  • Am I paying too much for energy?


Q 1. Why should I switch?

Whether you’re moving home or looking to find a better deal for your existing property, here are a few things that might help you to get a bigger picture of why switching to a new provider with a better deal could potentially save you precious money and time.

Move to a better deal

Many Australians are tipping “off a cliff” due to debts piling on energy bills. An Australian Energy Regulator report (2020) from The Morning Sydney Herald News reveals that household energy debt has jumped by 21% to $124 million between March and November 2020. Which means nearly 171,500 people are in debt and owe an average of $908 each while another 73,100 customers on hardship programs with an average $1371 of debt. So why pay more than you need to?

Although energy prices have moved slightly downward in recent years and are expected to drop further, living costs on the other hand, are still on the rise. So you might be wondering now: what should I do then? Well, you don’t have to pay high prices if you’re not happy with the service you’re getting with your current energy provider or you feel like it's becoming too expensive for your household budget. With the amount of service providers these days it’s incredibly easy to  find a better deal that suits your financial circumstances.

Discover greener alternatives.

Are you looking to reduce your carbon footprint and use renewable energy instead? The good news is there are a number of energy utility providers now offering more renewable and sustainable energy options, such as hydro, solar, wind and biomass. If you’d like to reduce your impact on the environment and focus on sustainability, then get a cleaner, greener energy plan by aligning with a service provider who cares about the same things as you.

Find a plan with a flexible contract

Looking for a plan that doesn’t penalise you for terminating it early or making changes to your account, or a plan that allows you to lock in your rates for a period of time? Then find the right plan that meets exactly what you are looking for. For example, a pay on time discount may not be beneficial if you often struggle to pay your bill on time. So ask what options are available for you if you fail to meet the condition. And things like all prices and charges, your rights and obligations. Do you get a discount if you renew with the same provider you are about to sign up with? What happens if you wish to change providers?

Although there are so many well-known providers, including WeMoney’s partners out there both online and office, choosing the most suitable offer can be difficult, so understanding how and when you use energy is helpful.

When rumors arise about a price increase

Usually, before any price increase, rumors will surface beforehand. Even if one provider has raised their prices, other suppliers will most often follow in their footsteps. This is when you should start comparing quotes to find the best deal that suits your needs.

Determining your preferences and needs will help you limit your search when you are considering a new supplier. You will need to determine the type of energy supply you need, as well as price, flexibility, or other services that you care about. The move of switching suppliers, if calculated and well-considered, will save you from spending more money than you should.

It doesn't cost you a thing

WeMoney offers a free energy switching service right all in the palm of your hand. Saving money on electricity couldn’t be easier. We can help you find you the best energy deal possible from our panel of leading energy retailers, based on your preferences.


Q 2. Who can choose their energy provider?

People who live in the following Australian regions can choose their electricity providers:

  • Australian Capital Territory - Yes, but there may be slight variation in pricing as this is a regulated market.
  • New South Wales -  Yes
  • Northern Territory - Yes, there are two retailers, Jacana Energy and Rimfire Energy, but there may be slight variation in pricing as this is a regulated market.
  • South Australia - Yes
  • Queensland - only available in South-East Queensland
  • Victoria - Yes
  • Tasmania – Yes, but options are limited. As said, there are three retailers, Aurora Energy, 1st Energy, and Future X, but there's little variation in pricing as again this is a regulated market.

Q 3. How should I go about switching?

This section will guide you on things, say a checklist on what you should be looking at before choosing to switch.

☑️ Determining your needs

First and foremost, before deciding on whether it’s better to change providers or not, determine whether you are satisfied with your electricity and gas services, or if you would prefer a dual fuel contract that can cover you both services by the same company. Once you determine your needs, there are some questions that you need to answer before you start comparing different energy providers.

Recommendation:  First comes the location you are based in (see the above section), followed by your exit fees, meter numbers (this type of information on your bill receipt) and etc. All these answers will limit your search. So continue reading to find out more.

☑️ Exit Fees

Second step is to check whether there are any exit fees if you decide to leave your current contract early. Here are 3 simple steps to cancel your contract:

  1. Contact your energy retailer either over the phone or online or you may be able to find this information on your electricity bill.
  2. Provide them your correct information, for example, your account number and proof of identification.
  3. Pay an exit fee or any outstanding bill if there is one.

And don’t panic if it turns out that you will be charged an exit fee for switching. Because usually in cases like this, the fee might be lower than the potential savings with your new provider.

However, it’s still good to have this information up-front to avoid any nasty surprises. For instance,  be mindful of last minute outstanding bills which are capable of causing a delay in cancellation before the final bill comes in.

Note: Contracts usually vary from 6 months to 2  years for both residential and business customers. That means your early termination fees may slightly vary depending on how long you have left on your contract.

Recommendation:  See if you can find an energy provider that can offer you a contract on a no-lock-in, month-to-month basis.

☑️ Check your tariff, rate and usage

The next step is to grab your latest electricity bill and check how much you’re currently paying.

Your bill will be made up of different charges and a tariff, which is the price you’re charged for the energy you use and this in turn determines your rate.

Different tariff rate types apply and depend on where you live (your distributor zone) and the type of meter you have at home and therefore the charges shown on your bill may include: :

  • Daily supply charge -  the amount you pay to be connected to the electricity grid. Also called the 'service to property' charge, fixed charge or service charge, they are usually shown on your bill as a daily rate. Daily supply charges are not based on how much energy you use.
  • Usage charge -Also known as the consumption or variable charge and is the charge for the electricity you use. It will appear on your bill in cents per kilowatt hour (c/kWh).

Moreover, you may be billed under one of the following types of tariffs:

  • Time of use - You apply different prices for electricity at different times of the day. Time is divided into Peak, Shoulder and Off-Peak periods So you pay  different prices for electricity usage depending on the time of day. Shoulder periods are the times between peak and off-peak.
  • Single rate - There are no peak or off-peak periods. This means that you pay the same rate whatever time of the day you use energy. The rate is usually lower than the peak rates of a time-of-use tariff.
  • Controlled load (or two rate) - you pay per kWh for appliances that are on dedicated circuits connected as a Controlled 2 Load. Generally, it is for electricity that's usually available for a longer period each day – for example, an electric water heater or pool pump.

Recommendation: It can be handy when comparing offers to check how many kilowatt hours (kWh) you typically use in a billing cycle and, if possible, during peak seasons – i.e. winter and summer. So make sure you know, that way you can figure out how much you could really be saving by switching providers.

☑️ Compare the whole plan

The cheapest electricity plan will be different for everybody. It will depend on your circumstances, including:

  • where you live,
  • your power consumption,
  • the distributor, and
  • available providers in your area.

Keep in mind that getting a great deal on electricity and a plan that works for you isn’t just a case of finding the cheapest rates. Be sure to look at the big picture, including:

  • Discounts and benefits - Are you eligible for any special introductory offers? Are there discounts for paying via direct debit or by the due date (if so, check whether the discount applies to the usage charges only, or is deducted from the total amount)?
  • Fees and charges - Are there any fixed costs or service fees? What are the late payment fees? Are there fees for exiting the contract or moving?
  • Duration of the contract - Are you locked in or free to exit at any time? (read the following section for more details)
  • Billing cycles and options. Will your bills arrive monthly, bi-monthly or quarterly? Does the supplier offer an option to pay in instalments? How can you pay – through your bank account, or by credit card?

Recommendation: As always, be sure to check the terms and conditions carefully before signing up for any contract no matter how easy it is to  switch.

☑️ Make the switch

When you’ve compared all the offers and found the one that best suits your budget and lifestyle, the rest is easy – simply contact the provider in question and they will organise everything for you.The switching process typically doesn’t take long, but it can vary across providers, so it’s a good idea to check.

Recommendation: Alternatively, if you’re working through an energy switching provider such as WeMoney, all you need to do is upload your latest bill or enter your contact address and we’ll take care of the rest from sign up to fully set up!


Q 4. What should I look for in an energy provider?

There are some basic points to look out for when choosing a provider:

Does the contract offer a fixed rate and period?

Speaking of contracts, consider the type being offered. In some areas you can choose between two kinds of offers – a standard retail offer and a market retail offer. A market retail offer is when electricity providers can set their own prices. So when comparing energy plans, you’ll notice some providers offer fixed supply terms and even set rates for a period. This fixed rate can be a good thing if energy prices are rising in the market. However, you’re locked into your contract and may need to pay a termination fee if you wish to switch to a cheaper deal. For any commitment-phobes out there, the good news is that many plans these days come with no exit fees.

Are you receiving a ‘market offer?

In 1 July  2019 the Default Market Offer (DMO), an electricity tariff set by the Australian Energy Regulator (AER) was introduced in NSW, SA and south-east Queensland whilst the Victorian Default Offer (VDO) was introduced in Victoria. The purpose is to effectively serve as a price cap for electricity for those previously paying the highest prices, on contracts known as ‘standing offers.’ That means, DMO will act as a reference point for power prices, which is aimed to protect customers who do not engage in the energy market. For instance, to put a fair price cap on the maximum amount you can be charged for electricity. If you aren’t receiving a market offer, which has cheaper rates than the DMO or VDO, then you could be missing out on potential savings. Even little changes like this can make a big difference in your pocket.

Does the provider offer any concessions on their energy plans?

If you hold an eligible concession card like health care cards and Department of Veteran Affairs (DVA) Gold Card or DVA Pensioner Concession Card, you may be able to claim  rebates and concessions from the state or federal governments on your behalf.

Find out if you are eligible for government concessions, rebates or grants by clicking on your state of residence. And keep an eye out for these concessions as you compare energy plans.

What is the provider’s customer service like?

Be sure to consider how the provider handles service requests. Usually, you can complete service requests over the phone, but there is a growing number of businesses that offer online services, including WeMoney for more efficient customer experience. For example, once you upload your bill or enter your address, our system picks up all the details needed  to get you a tailored quote.


Q 5. How long will it take to switch to a new energy provider?

The switching process can take up to three months depending on the provider you choose and how often they read your electricity and gas meter, so it is best to check with them.

According to National Electricity Market rules the energy services must read your meter at least once every six months, but some read your electricity once every three months as well. So this timeframe is necessary for your new provider to get an accurate reading before they start billing you.

Also there are other providers with whom it is possible to switch immediately when changing to a new deal. To do this, you’ll need to apply for a special meter reading on a specific date approved by your retailer. Be mindful, however, that additional fees may apply if you decide to go this route.

If you’re looking for an easiest way to compare offers, you can do it with WeMoney for free here.

Note that you won’t be impacted when you switch energy providers (i.e. you will still receive an energy supply and a final bill from your previous provider for the period before the new provider took over.


Q 6. How do I switch?

Traditional method of energy switching

If you want to switch your energy provider, simply contact your new provider and apply for the new plan. The new provider will take care of the handover.

Here is what the steps usually look like:

  1. Give your metering info (NMI -National Measurement Institute) to your new retailer.
  2. They make the switch for you.
  3. You get a cooling-off period in case you change your mind.

Note: You can find your NMI on your bill or you can ask your existing retailer.

WeMoney method of in-app energy switching

Here is what the steps look like with WeMoney partners:.

  1. Upload your electricity bill or search your address
  2. See potential savings from providers
  3. Switch and save.

And the best part? You can save up to $247 per year*. Plus you can also compare offers from major retailers including: Powershop, Synergy, Diamond Energy, Sumo, 1st Energy, Energy Australia, Lumo Energy, Momentum Energy, Nectr, OVO Energy, and Red Energy with more on the way -- all for free at your fingertips. It’s really that simple!

We have to preface however that our service is only available to customers  in NSW, VIC, QLD and SA for now.

Q 7. Do energy providers check my credit score? And, will this affect my score?

Yes, some providers may wish to conduct a credit check before signing up with you just to be cautious about taking on any customers who have failed to keep up with payments on their energy bills in the past.

Because even though your utility bills are not a type of credit agreement like a loan or mortgage, failing to keep up with your energy payments could result in harming your credit score. As for this case, any missed/late/overdue payments will show up as defaults on your account and your credit report, which could, in turn, impact your score.

This is why it’s important to remember that if you hurt your credit score, it will take some time to build it back up again, so try your best to keep up with all of your monthly payments and make sure you pay them in full and on time, if possible.

Note that energy providers check your credit score by carrying out a ‘soft search’ to check your details, but this does not impact your credit score. Long story short, it’s your payment defaults that affect your score and report.

If you’re looking to improve your credit score, grab your free credit score check with WeMoney.  


Q 8. Will a utility company refuse to take me on as a new customer if I have bad credit?

There are two main things your new providers will consider before choosing to sign up with you if you have a bad credit.

First, if they discover that you have missed recent payments on a utility bill, this may affect the type of deal they will offer you.

Secondly, If they believe that you are at risk of missing or defaulting on your electricity bill payments, then you may be required to put down a deposit for paying your energy in advance or have a prepayment meter fitted; which also essentially means you might not be able to sign up for a “pay as you go” plan!

Note:

  • The good news: they generally tend to look at utilities specifically so you do not need to worry about other factors (for this case) that impact your credit score.
  • The bad news: prepayment meters generally cost more for customers with poor credit, so be mindful of this fact when you look to switch with new energy providers.

Q 9. Do I get charged if I change my mind after switching?

You have five to ten business days, which is also known as the cooling-off periods  (excluding weekends and public holidays) if you change your mind after you've signed up for a new energy retailer. So any day before this cooling-off period ends, you can cancel your plan without incurring any fees or penalties.

Additional tip:

If you're being email-spammed or called by telemarketers, don't feel pressured to make a decision on the spot. With phone calls, for instance, be explicit when discussing energy deals with them so they don't switch you over without your satisfaction or consent. And, if you don't want to be contacted by telemarketers, you can register with the Australian Government's Do Not Call Register.

Q 10. Busting 7 common myths about energy switching

In this section, you will debunk some of the common myths about energy switches. Simply put, you’ve nothing to lose, and lots to gain by performing an energy price comparison and switch suppliers!

Myth 1: They will interrupt my electricity and gas supply

False. Your energy switch should be totally seamless. Meaning?  You are only changing providers, not distributors and therefore, your old and new energy providers will work together to complete the change. Thus,  you will go from one to the other just like flicking a switch, so to speak.

Myth 2: There's too much of time involved in switching energy suppliers

False. As mentioned above, energy switching is fast, staggeringly easy and free to compare. A lot of people who have never done it before and just assume it will be a real process. The reality is it takes 5 to 10 minutes or less on the phone or a few minutes  via our app. In app for example,  we take care of the entire process so that you get a tailored quote that meets your needs.  All you need to do is  once you upload your energy bill and enter an address.

Myth 3: I can’t compare energy fairly through a comparison service

False. Energy comparison tools are designed to show you the best energy deals from a wide range of providers. You can filter your results according to your precise needs – green energy, dual fuel, payment method, and so on – and make your choice. Many comparison tools will also include the estimated pricing for providers that you must contact directly or email them if you want to change energy suppliers, even if selecting them means not using the comparison site.

With WeMoney partners for instance, you can compare offers from major retailers including: Powershop, Synergy, Diamond Energy, Sumo, 1st Energy, Energy Australia, Lumo Energy, Momentum Energy, Nectr, OVO Energy, and Red Energy with more on the way!

Myth 4: I’m renting so I need to stick with my landlord’s plan

Not always true. This depends on your landlord, as well as who pays for utilities plus whether your home is part of an embedded network where all of the properties (e.g. in the apartment block) are supplied by the same company.

If you pay for your energy use on your own, and provided your landlord permits it, you will be able to compare energy tariffs, find the best energy deals and ultimately switch energy suppliers according to your wish. So you should always check with your landlord and also make sure to read your rental agreement carefully before deciding to switch.

While you’re not entitled to switch energy providers if your landlord is paying the energy bills, if you feel you’re being unfairly charged then it may still be worth finding the best energy deals for your circumstances and approaching your landlord with these better options. Bear in mind, though, that they are under no obligation to make an energy switch to secure a cheaper tariff for your benefit. But make sure you understand what you’re getting into first.

Myth 5: Switching will only save me cents, not dollars so it’s not worth my time

False. Energy suppliers usually save their best energy deals for new customers, so switching could save you a significant amount – particularly if you’ve never done so before. According to WeMoney partners, for instance, the average customer can save up to $247 per year, which isn’t bad for a few minutes of work  – that’s the equivalent of a cheap and cheerful holiday or a year’s subscription to a premium movie channel.

Myth 6: I have to deal with the hassle of telling my current supplier about the change.

False. Once you’ve told your new provider you want to move, they’ll take care of this for you. Your old supplier will send you a bill for the energy you’ve used up to that point, and once you’ve paid them as you usually would (or they have given back the money they owe you), you needn’t give them another thought.  Otherwise, with WeMoney, it only takes minutes to see if you could save with partners simply by uploading your latest energy bill or entering your address in-app and we’ll take care of the rest for you.

Myth 7: I can’t access the internet, so I can’t make an energy switch

False. While online price comparison sites services are one of the simplest ways to compare energy deals, many of our partners like Red energy, Sumo, and so on also have offline-approved switching services such as call centres to help you make an energy switch. The process is like online price comparison, where you share your post code, energy bill reference number, and current provider you’re with. You will then be presented with the top choices for your criteria and you’ll be able to make the switch over the phone.


End of story: If I do switch

If you do switch, make sure you check the full details of the plan. To help you make the right choice, ask the following questions:

Questions to ask the provider

  • For electricity, what is the cost per kilowatt hour?
  • Are there any fixed costs or service fees?
  • How long is the contract? What about the terms and conditions?
  • Are there any exit fees on the contract?
  • If I get a longer contract, is it cheaper?
  • Can prices go up during the contract?
  • Do I get a bonus for early payment? Or, for perfect credit performance?
  • How do I pay? Bank account, credit card or cash?
  • Are there exit fees if I want to leave the contract early? If so, how much are the exit fees?
  • What about late fees if I don’t pay my bills on time?
  • Can I save more by consolidating my electricity accounts with gas accounts? Can I get a bundle discount if I decide to do this?

Once you are happy to proceed with the potential offer, don’t forget to ask for an offer summary.

Paying too much for energy?

Check now if you’re on the best deal. fast, easy & free comparison with WeMoney partners in-app here.


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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.

Things you should know

*Average savings is based on average annual savings from all Accurassi Australia (A WeMoney Partner) Australian comparisons. Accurassi estimates your annual costs based on either your uploaded bill, average daily usage or the default offer valid for your area. Any shift in electricity usage habits can either increase or decrease actual annual costs.

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