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Things to consider when choosing the cheapest energy plan

When it comes to cutting back on your energy bills, shopping around and checking out a variety of energy providers is one of the most effective methods.

There are plenty of online resources and tools for comparing energy prices that are provided by the government for free. They may look at all of the energy merchants in your area to see which ones are offering the greatest deals.

In order for you to to start using these services, you need to have access to a device with internet connection, a recent bill, and some essential home details are required as well.

Users can save hundreds of dollars on their energy bills by running the comparison and taking important factors in consideration. All it takes it a bit of research, which we have done for you in this article. So here the factors that you need to keep in consideration when comparing different electricity providers in your area.

1. Costs associated with energy use

The amount of energy you use is multiplied by the price per unit to arrive at your bill. According to the time of day you use your electricity and the type of contract you’re on, the price per unit can fluctuate widely. Additionally, the cost may differ based on where you live, as each state and territory sets its own prices for the various energy supply components.

The daily supply charges on electricity bill (sometimes known as a service charge or a fixed charge) and the use charge are the two portions of your gas and electricity tariff (a consumption or variable charge).

Even if you don’t use any electricity or gas, this daily supply price shows up on your bill as a total or in cents per day.

When you use electricity or gas, you’ll be charged a usage fee that’s calculated based on the amount of electricity or gas you use per hour or per megajoule (c/MJ) on your statement.

2. Contracts and offers

If live in an area that is a highly competitive market for energy providers, You may have a choice in which energy retailer to use. Despite the fact that you may only have access to one provider in your area, they may be running multiple promotions. Knowing how and when you consume energy helps when it comes to selecting the best deal.

You can save money by shifting energy-intensive tasks like washing and cooking to off-peak hours if you have contracts that encourage you to use energy efficiently.

However, if you have to use heating and cooling systems during peak hours, your expenses may go up. You may end up spending more if you sign a contract that isn’t right for your household or way of life.

Before signing a contract, be sure you have read all of the terms and conditions.

  • You can find out if switching is advantageous by speaking with your current retailer and inquiring about the benefits of doing so. If you’re wanting to save money, find out how much electricity costs per kilowatt hour (c/KWh).
  • Find out how much the daily supply charge is and see if it covers the same number of days as the one on your current electricity bill.
  • Inquire about any additional fees, such as late payment or early termination of the agreement.
  • Check to see if the deal includes any perks or savings in addition to the regular price.
    If you can’t meet the criteria of the discount, it may not be worth it to take advantage of the offer. For instance, if you have trouble paying your bills on time, a pay-on-time discount may not be useful to you.

Read the contract terms and conditions carefully before accepting a new energy offer. It’s a good idea to have a friend or family member double-check your work.

There are laws in place to ensure that customers’ interests are protected when it comes to energy. Any contract must be provided to you in written form by your retailer. The following details must be included in the price of energy fact sheet:

  • everything from the cost to the fee
  • termination fees and penalties for early resignation
  • contract’s start and end dates, billing and payment details, and your rights and responsibilities are all listed here, too.

You have 10 business days from the time you accept to cancel your agreement without incurring any fees.

Billing issues

You can request a review of your energy bill if something doesn’t seem right about it. Contact your state or territory’s energy ombudsman if you’re not happy with their response. Arbitration by an ombudsman is completely free.

Instead of getting a hefty quarterly bill, you can have smaller amounts automatically taken to relieve financial stress. Check with your retailer to be sure your energy costs have not increased.

You should talk to your retailer if you’re having trouble paying your bill. In the event of a financial emergency, their hardship policy will detail all of the potential solutions. A payment plan could help you avoid disconnection, interest, and other charges.

If your store sends you a disconnection notice, get in touch with them right once to talk about your choices. The only time you should be unconnected is on weekends and public holidays. There are additional safeguards for people who are registered as being in need of a life-support system.

Comparing existing provider with other plans

A ‘fact sheet’ for each retail electricity plan is required to be published by electricity retailers. Energymadeeasy.gov.au has these, which describe the prices and terms of each package as well as any additional fees.

For instance, visit the government comparison site Victorian Energy Compare if you live in Victoria, or go to energymadeeasy.gov.au for free retail plans if you live somewhere else with the option to switch.

There is a wide range of plans available depending on where the property is located and which electricity distributor serves the area.

Keep an eye on fluctuating prices

Energy prices fluctuate from time to time, but they have seen a steady decrease in the past few years. The decrease in prices is definitely a huge bonus following a sharp increase in power prices due to rising network costs a decade ago. With that in mind, you must gain some basic insight into how and why power fluctuate. This will give you a broader perspective and help you choose the cheapest retailer.

An increase in peak demand (such as hot summer days), population expansion, and higher criteria for power reliability have all led to higher network costs. Ageing poles and wires need to be replaced, and network costs are rising as a result.

For new gas resources, greater development and production costs are one factor impacting gas prices. Other factors include state and territory limitations on offshore gas development, moratoria, and regulatory uncertainty.

The east coast’s wholesale power and gas rates fell to their lowest point since 2015. The Australian Government’s Big Stick legislation and the implementation of Default Market Offer are two factors contributing to the decline.

Get familiar with bill reading

You do not have to be an engineering student to get the know-how of how electricity bill is calculated. You may enjoy receiving a monthly power bill if you are a business owner, homeowner, or even an apartment renter. And, if you’re like most people, you probably don’t give the itemised costs a second thought, instead scanning the total, paying it, and moving on with your life.

Give your electric bill a comprehensive examination the next time you receive it. You’ll see a breakdown of the various charges that make up your overall energy bill. Are you unsure of what you’re looking at or what you’re being charged for? You’re not the only one who feels this way. Let’s take a look at your electric statement and figure out what all those line items and charges imply.

Electricity is measured in kilowatt-hours (kWh), and most costs are computed using a rate per kWh that varies depending on the type of organisation that consumes the energy (i.e. residential versus commercial). You can go to your utility company’s website to learn the rate that applies to your bill (we found National Grid, Eversource, and Unitil rates for you).

The two sections of a typical electric bill are delivery and supply. The delivery rate is the fixed cost imposed by the utility to cover the expense of transporting electricity from the generator to the consumer. Power lines, natural gas pipes, transformers, and other physical equipment are all part of this.

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