Check for a better deal on electricity

TIM McINTYRE

HOMEOWNERS often debate whether the time is right to fix the interest rate on a mortgage, but new research from Canstar Blue suggests now may be an opportunity to lock in your electricity rates ahead of anticipated price hikes in July.

While most energy plans come with variable rates, courtesy of more than 25 energy retailers in Australia, the main three providers: AGL, EnergyAustralia and Origin Energy, offer fixed-rate options, depending on where you are in Australia. While fixed rate plans are currently more expensive than variable, a 10 per cent hike would see them cost more than a rate locked-in now. Most fixed rate offerings are for twoyears, which could double the savings.

“A fixed energy rate plan is an agreement whereby your electricity provider will not change the rates it charges you for power over a set period,” a Canstar Blue spokesman said.

“By guaranteeing today’s rates on electricity for two years, customers are protected from two rounds of rising power prices and are afforded a bit more certainty.”

Different states have different energy deals available and the research found that in southeast Queensland, for example, average fixed rate prices are currently $28 more expensive per quarter than variables from those major providers. In NSW, fixed plans cost just $42 more per quarter.

The gap is $75 in Victoria and more than $100 in South Australia.

“Fixed rate energy deals are likely to prove a good bet in Queensland and New South Wales, but consumers in South Australia and Victoria may be better off looking for the cheapest variable rates on offer,” the spokesman said.

“However, there is no guaranteed right or wrong answer in any state.

“Fixed rate contracts generally don’t include bonus discounts for paying your bills on time, or via direct debit,” the spokesman said.

“Additionally, customers are charged a fee for leaving a fixed rate plan before the two-year contract period expires. This early termination fee is usually between $50 and $100.”

The research concluded that fixed rate plans may suit someone not planning to switch retailers within two years, while those looking to chop and change depending on who offered the best deals would be best to stick to variable.