The Australian Energy Regulator has defined a reference price for electricity offers. This is designed to act as a safety net for customers who don’t shop around and could otherwise be left paying a huge rate.
The reference price was set by the regulator and was launched on 1 July 2019. It will be updated annually.
In and out
- In: the reference price is for ‘Anytime’ offers - i.e. single rate tariffs, and ‘Time of Use’ tariffs, with or without controlled load.
- In: reference prices vary by distribution region (eg Ausgrid, Energex or SA Power Networks) and are based on an average annual level of usage that’s set by the regulator.
- Out: Solar feed in tariffs are not allowed to be taken into account when calculating where an offer sits against the reference price.
Our price guarantee
It’s worth bearing in mind that if we do have a product designed specifically for solar customers, the cost may work out more than the reference price if the benefit of the solar feed in tariff isn’t taken into account. We never expect that to happen, as it would be unusual for someone without solar to choose a tariff that’s designed specifically for customers with solar.
How it affects you
Thanks to the reference price, we’ll now see an end to the silly and made up discounts such as “43% off your usage charges”, which had become commonplace amongst certain retailers. As has been reported in the media, these offers were often worse for customers than undiscounted offers.
When viewing energy offers in NSW, Qld, SA, ACT and Tas, you’ll now see prices shown relative to the reference price. For example, instead of a (very unscrupulous) retailer saying “it’s 43% off!” (and in really small print “it’s 43% off a very big, made up number”), you’ll now see them say something like “it’s 2% less than the reference price”.
This means that it’s easier to compare energy plans on a like-for-like basis.
Traps
Reference prices need to be shown based on an average level of usage. This level is set by the regulator. Your usage could be quite a lot more or less than this average level, so it’s worth checking the small print to see how much usage makes up each comparison.
For example, in the Ausgrid (Sydney) region in NSW we’re required to put an average level of usage of 3,900kWh per year into our comparisons. The average usage our existing customers have in the Ausgrid region is typically 5,900 kWh per year.
Our support
We fully support reference pricing. Too long have retailers gamed customers and made huge margins from making up random numbers and often earning upwards of $1400 per year through foregone discounts when customers don’t meet all the necessary conditions.
Energy Locals doesn’t earn money from usage. Instead, we charge a fixed membership amount on a monthly basis. In most cases this is included in our daily charge for simplicity. We’re proud to have never played the old school games of big percentage discounts and welcome a more level playing field so that customers can take more informed decisions.