In July 2019, the Australian government introduced the energy reference price: a cap on the figure electricity retailers can charge for standing offers.
The welcome move was designed to make the notoriously confusing process of choosing a retailer fairer and more transparent for customers.
Below, you’ll find out everything you need to know about the energy reference price. From how it works to the benefits of the regulation.
What is the energy reference price?
The Australian Energy Regulator (AER) sets the energy reference price and is the most an energy supplier can charge you through their standing offers. A standing offer applies to a customer who does not actively choose an energy plan or may not be eligible for a market offer.
This helpful price cap will enable you to compare offers from leading retailers without the confusion that existed.
Before the energy reference price was introduced and the market was deregulated, some customers saved money while others were left paying far too much by sticking with their energy supplier.
Energy retailers now have to put their offer next to the energy reference price to decide whether or not you are getting a good deal. The energy reference price is designed to help those who aren’t accustomed to comparing energy rates, as you will always have a benchmark to go off.
How does the energy reference price work?
The Australian Energy Regulator (AER) sets the energy reference price every year by assessing the local area’s usage and supply charges. This means that the reference price will vary depending upon where you live.
Who does the energy reference price affect?
The energy reference price affects customers across New South Wales, South Australia, and South East Queensland. In Victoria, there is a similar scheme known as the Victorian Default Offer.
How do I find the best electricity deals?
The energy reference price has made it easier than ever before to find the best electricity deals. Simply look at the percentage difference from the reference price. The bigger the difference in the reference figure, the better the deal.
How does the energy reference price help?
#1. It’s fair for everyone!
The energy reference price is a government-controlled cap which means retailers can’t charge you more for standing offers. This is great news for those new to comparing energy plans or who are too busy to spend time analysing the market, as it creates an easy-to-read environment for everyone.
Now, it’s never been easier to search for the best electricity deals on offer as you can rest easy knowing that the discounts are taken off a comparable rate offered by all retailers.
#2. You don’t need to do anything.
If you are on a standing offer that is more expensive than the reference price, you don’t even need to do anything, as the lower prices will be automatically applied. However, it is still worth investigating to see if you can find a better deal elsewhere.
#3. It’s easier to compare deals.
The energy reference price is a benchmark figure designed to make it easier for you to compare gas and electricity plans on offer from different suppliers.
Now, the reference price can be seen next to the annual cost of each plan alongside a percentage that shows how much you will save in comparison, making it easier to compare deals.
The energy reference price has made it easier than ever before to find the best electricity deal for you, as the market is now more transparent for everyone – no matter how much experience you have in comparing plans.
Hi, I’m Anna the Editor of Beauty and Lace.