Electricity Retailer Deal: Too Good to Be True?

[Deactivated] on 08/08/2015 - 10:24
Last edited 08/08/2015 - 11:40 by 1 other user

When we moved into our home two years ago we went on a no contract deal with a major energy retailer, fully realising we'd be paying a little bit more compared to being on a contract. Since then I've been "shopping" and comparing, but had not found anything that I liked. Without exception all contractual arrangements with energy retailers seem very one sided with no consumer safe guards. The only upside is that most give a "discount" for prompt payment.

Anyway, a deal promoted through the motoring organization I belong offers a 22% discount on prompt invoice payment before the due date. Tariff rates quoted are on par or slightly better than what I am paying now. The feed in tariff is slightly less than what I am getting now, which is bugger all.

The 22% discount seems significantly better than what I have found elsewhere. The contract is two years and there is a "get out of jail free" option if their non regulated charges increase beyond the CPI.

I should add my cynicism about these deals was heightened after I recently met someone who bragged about the "invoicing" business he had an interest in. He claimed he and his partners were getting 10% from each invoice processed. You can guess what business they were billing…

Assuming that I have done my home work that the deal itself is the best I can find, the question remains can the energy retailers be trusted, especially when the deal sounds just a little too good to be true?

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  holdenmg on 08/08/2015 - 11:06

  "Without exception all contractual arrangements with energy retailers seem very one sided with no consumer safe guards."

  Huh…

  In SA we have http://www.ewosa.com.au/

  Otherwise:
  http://www.aer.gov.au/node/10921

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  pjetson on 08/08/2015 - 11:53

  +5

  Just the headline "discount" rate isn't very helpful in comparing retailers. The daily service fee is usually well over a dollar, so can be a significant part of the bill, and most retailers do not discount the service fee. Rates and service fees vary so much between retailers that a sensible comparison can be very difficult, and must rely on information from your own past bills.

  For my particular circumstances, a retailer offering only a 10% "discount" was in fact cheaper than a retailer that offered a 38% discount.

  The retailers can be trusted only to have their own best interests in mind, and that means making the most money from each and every customer. That's not so say that they lie or do not fulfill their promises, just that there might be (and often is) more to the deal than the numbers in the biggest font.

  about the "invoicing" business he had an interest in

  Many people don't seem to realise that most energy retailers are only invoicing businesses. They have absolutely nothing to do with energy distribution or supply. They exist only as middlemen.

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  glopmaker on 08/08/2015 - 13:21

  +2

  Don't accept anything that offers discounts. Did you say they were offering 22% off a different different tariff to what you had. Doesn't that say something about Tariff rates? And as for early payment discounts, that's a joke. pjetson is spot on. The middlemen are making bucketloads out of consumers forgetting.
  Get prices for Nett Rates only. Ignore "Discounts"
  And while you're at it, send your motoring organisation packing

  • 

    emibel19 on 08/08/2015 - 19:58

    +1

    Ignoring discounts doesn't make sense to me. What's wrong with comparing what you will actually pay, based on current usage and/or future estimates? That requires knowing the basic rates and discounts (assuming you will meet the conditions required for the discount).

    • 

      Kevan2 on 08/08/2015 - 20:05

      and check with motoring organisation if they recieve a "connission" opps commission for referal/sale.

      • 

        emibel19 on 08/08/2015 - 20:08

        Why should the consumer care about that?

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  Kevan2 on 08/08/2015 - 20:18

  this may or not show a conflict of interest. True the organisation is for the benifit of members, but sometimes it is a long and winding road where you could lose your way.

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  nrg2010 on 08/08/2015 - 20:39

  +2

  22% off what?
  Some companies offer the discount off usage and some off the total bill.
  For me a 17% discount off the total bill is better than 22% off the tariff rate.

  You need to set up a spreadsheet and enter some usage data if you are really interested in making a saving.

  Start with how many kWh you use per day, and work out if TOU billing will work for you. Heaps of info out there in the cloud, dude

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  pjcook on 09/08/2015 - 07:52

  powershop.com.au

  • 

    deal88 on 09/08/2015 - 08:05

    I would totally recommend Powershop.

    • 

      glopmaker on 09/08/2015 - 09:26

      That's what I am getting at. I love Powershop. I just mentioned them to Momentum, and immediately got competitive rates = no discounts. Don't doubt that the average consumer has to believe in the notion that 25% off is better than 20% off, probably because they have either no hope of or no interest in understanding the underlying pricing.
      Who knows if Powershop is cheap, if they are not offering a % discount?
      I'm a cheapskate in every way, and I did it all on a spreadsheet. I found out that my offpeak, or whatever they call it this week, was the ONLY key to saving.
      But you do have to be a dedicated headcase to wade through the crap.
      Guiguy is your classic consumer. The rates look to be a bit better so how's the discount? wow! 22%! He must be better off, and the only cost is making sure he pays by a certain date. What could be simpler?
      Maybe it's time Ozbargain got into the game!

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  mmecholet on 14/08/2015 - 10:24

  QUEENSLANDER! No Powershop available here.
  Anyone have any recommendations for best value electricity supplier in S E Queensland?
  ORIGIN is my status quo.
  ALL including GST: Supply fee 11 Supply fee 31 Tariff 11 Tariff 31 Solar feed
  ORIGIN 1.280378 .0319 .244616 .136928 .06/kw
  Unclear if existing customer re-signing will qualify for ‘carrot’ of $50 after 3 months & 10% Pay on Time discount (usage only, after solar feed deduction). Charge 0.6% for cr card payment.
  ENERGY AUSTRALIA charge about the same – but will not divulge their solar feed rate without a phone call.
  CLICK charge an amazing $1.55 daily supply charge, with all peak/off-peak higher than Origin; 6c/10c/12c solar feed tariffs, with other charges escalating more than proportionately.
  DODO 1.2980 .25465 .13915 .04/kw
  Also very interested if anyone knows of reasonably priced battery system as way to use my own solar production, eventually doing away with power company altogether. Big ambition; small purse.
  Sorry; have tried to re-edit tab columns re ORIGIN charges, but Word won’t play ball