Cheaper energy prices for small businesses could be just a phone call away, the Australian Competition and Consumer Commission (ACCC) says, as the cost of some electricity deals soars above the ‘safety net’ offered to energy consumers.
On Thursday, the competition watchdog issued a fresh warning over some energy plans offered by retailers to small businesses and homeowners, which have spiked in cost over recent months.
In Victoria, the cost of one plan identified by the ACCC has risen 21% above the Victorian Default Offer — the ‘safety net’ price offered to Victorian consumers, which also assures retailers a fair margin on the energy they provide.
Every energy consumer has the right to receive those ‘safety net’ rates through standing offer contracts with an energy provider.
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But energy providers are not required to shift consumers onto those rates if the market offer originally offered to them by the energy provider balloons in price.
It is crucial for small businesses to check their rates and if a standing offer contract is cheaper.
“We know that many Australians are likely paying more for electricity than they need to because their recently increased rates are higher than the safety net built into standing offer contracts,” said ACCC commissioner Anna Brakey.
Where the safety net price once served as something of a maximum buffer on energy costs, the fact some market offer contracts are more expensive means there has been a ‘significant reversal’ in the role of standing offer contracts, which are “becoming a cheaper option for many people,” Brakey added.
Swapping from a sharply-increasing market offer contract to a standing offer contract can be as easy as calling a power provider and asking to switch, Brakey said.
While some contracts are becoming extremely expensive, the ACCC notes that 90% of market offers currently being advertised actually offer rates below the ‘safety net’ price.
Small businesses stand to save even more by comparing market offer contracts between providers to determine what works best for them.
“We strongly encourage households and small businesses to use the Government comparison sites Energy Made Easy and Victorian Energy Compare to find a better offer,” Brakey added.
The focus on energy prices comes after a deeply tumultuous 18 months.
Global turmoil in the energy market has resulted in wholesale price increases, meaning even the reference prices offered to small businesses have risen dramatically in recent months.
Energy prices for some households and small businesses on those default offers rose as much as 29% on July 1 this year.