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Comparing electricity plans just became a whole lot easier


Electricity prices in Australia have increased over the last few years. However, there’s a silver lining in sight. The Federal government recently implemented the Default Market Offer (DMO), or if you’re in Victoria, the Victorian Default Offer (VDO).

The DMO and VDO deliver better rates to consumers by promoting healthier competition among energy retailers. They were introduced to replace Standing Offers, which were uncapped prices set by each retailer, and used as reference points for discounts.

What were Standing Offers?

Before the DMO and VDO, retailers had control over their Standing Offer price and could choose to increase or decrease the value as a reference price for discounts. By raising the reference price, retailers could spruik a more attractive discount to win more business. It was an unfair system that made comparing rates and discounts very difficult.

There are only a few reasons why you might have been placed on a Standing Offer, including:

  • Your contract expired, and you did not opt into a cheaper plan or were not advised by your retailer to do so.
  • You moved to a new property that was previously supplied by your retailer, and they were still the responsible retailer for that electricity meter. Until you elected a cheaper plan and gave the retailer your consent, you may have been placed on their Standing Offer.
  • You specifically opted into a Standing Offer.

Either way, you would have paid a premium for your energy - probably hundreds of dollars more on your annual electricity costs. Many consumers are not accustomed to reviewing their energy costs. If you happened to fall into a Standing Offer, it was in the retailers best interest to leave you there as it’s more profitable for them.

To help put more power back in consumers hands, the Federal government introduced DMO and VDO. But how do the DMO and VDO work, and how will they affect you?

The Default Market Offer and Victorian Default Offer

The DMO and VDO took effect on 1st July 2019. They affect residential and small business customers in New South Wales, South Australia, South East Queensland, and Victoria.

These offers serve as a cap to limit the ‘loyalty tax’ that is levied on disengaged consumers previously on Standing Offers. They will also be used as a reference price from which all discounts must be calculated, making it easier for you to compare apples with apples. With the new DMO and VDO, customers who are not able to shop around for better deals now have a safety net price.

The DMO is not designed to be a competitive price for energy, and the best deals will still be hundreds of dollars a year cheaper. This differs slightly to the Victorian Default Offer, which is a little more competitive overall than the DMO. Also, unlike the VDO, the DMO allows energy to set their supply and usage charges as long as they do not exceed the DMO reference prices.

It's our firm belief and recommendation that no Australian should ever be on any retailer’s’ DMO or VDO, including Powerclub's – even though we must have one by law. It’s all the same energy, from the same grid – what differs is the rates your retailer charges. At Powerclub, you will always find a better energy plan to suit your needs.

Will this affect your electricity bills?

Majority of Australian will not see any effect on their bills. Customers previously on Standing Offers, however, will be automatically switched onto their retailer’s DMO or VDO and can expect to see a reduction in their rates as a result. This will only affect a small percentage of the population on Standing Offers.

If you’re not currently on a Standing Offer, now is an excellent time to start shopping around to find the best plan for your home or business. You can use the new reference price as a comparison tool to help you understand which plan will be most suitable for you.

To compare all electricity plans in your Network, go to https://www.energymadeeasy.gov.au/ for SA, QLD, ACT and NSW, and if you’re in VIC, head to https://compare.energy.vic.gov.au/.

You can also go to trusted comparison sites like Canstar Blue to see the percentage difference between an electricity plan and the reference price. The more significant the difference, the better the deal is for you. For example, Powerclub’s Powerbank Home Flat plan is 18% less than the reference price.

How does the DMO or VDO stack up against Powerclub’s Powerbank Plans?

Our market offer has emerged as the cheapest household electricity plan in South Australia in the latest Vinnies annual price check. How low - $1065 less than the retailer with the most expensive yearly bill for households consuming 6,000kWh per year. On average, Powerclub is 15.25% cheaper than the reference price.

Powerclub is bringing a new way for Australians to buy, sell and use energy. We are breaking the mould by giving you access to the wholesale energy market. We don't profit from your energy use, and we pass on our operational expenses at cost, so you only pay for the energy you use, the services you get and nothing more.

Sound too good to be true? Looking for the ‘trick’ – there isn’t one. Powerclub functions on the basis that when you join the Club, you become a part-owner, just like a shareholder in a conventional company. We are the first Australian energy retailer to be set up as a company limited by guarantee, which means we cannot pay dividends or issue shares. Powerclub is geared up to protect our Members interests first - and because you own it, it works for you.

To protect Members from price fluctuations in the wholesale market, Powerclub has developed a nifty tool called Powerbank. Your Powerbank acts as a buffer to smooth out the highs and lows of the wholesale energy market - covering the difference when prices are high and replenishing when energy prices are low - so you can pay a fixed rate per kWh. It’s wholesale electricity delivered with less stress, and more yes!

Click here to learn more about our rates or connect with our team if you have any questions.

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