July 16, 2024
Must-do task before energy prices rise

Must-do task before energy prices rise

Should you make adjustments to your energy before the first of July? Expected to skyrocket in price
The cost of living is going up, and in July, there will be an increase in the price of energy as well. On the other hand, there are strategies that you can employ to fight against it.

As a result of the low wholesale rates that were available in the previous year, the cost of supplying families with electricity dropped to an eight-year low.

“More renewable generation and lower fuel costs have brought down the wholesale price of electricity,” commented Rod Sims, the chair of the Australian Competition and Consumer Commission at the time.

And while it would be lovely to report that those sweet cheap rates are staying the same, the reality is that they have skyrocketed as a result of a number of factors, including increased demand, coal generator outages, and fuel expenses.

According to a report that was recently published by the American Electricity Association (AEMA), the National Electricity Market (NEM) averaged $87 per megawatt-hour (MWh) for the first quarter of 2022. This is a 67% increase from the fourth quarter of 2021 and a 141% increase from the first quarter of 2021.

Additionally, there is more to come. Since July 1 is the date that retailers in New South Wales, Queensland, South Australia, and Western Australia make their changes, many energy retailers will increase their prices for households on that day.

In the event that the expense of living is already putting a strain on your financial resources, the following are some actions that you may take to assist in mitigating the impact of the upcoming period of price increases.

How can I save on my energy bills?

Fix your rates

By “fixing your rates,” what exactly do you mean?┬áIf you fix your rates, you will be able to lock in your energy prices according to the provider that you have chosen. This is a fixed price, which means that it is not susceptible to any variations that are often associated with the cost of energy. Always keep in mind, however, that a fixed rate is not the same thing as a fixed cost. Even though you are able to lock in the price that you are paying for energy, you will still be required to pay according to the amount of energy that you consume during that particular billing month.

The result is that you will have a bigger bill if you consume more energy than you normally would. However, in the event that a store make the decision to increase or decrease their prices, you will not be affected by that adjustment.

What are the advantages of having fixed rates

Having rates that are fixed provides you with a degree of assurance regarding the bills that you will be required to pay in the future.

It is possible that this might be more suitable for you if you have a large family, consume a significant amount of energy, and require a general notion of how much your monthly energy bills are.

Consider establishing your rates in order to have peace of mind, plan ahead, and preserve consistency in your business. If the possibility of an approaching price hike in July causes you to feel anxious, you should consider fixing your prices.

Check back later to see what else is available.

Waiting to see what other options are available might be something you feel comfortable doing if you live by yourself, have a relatively low monthly energy bill, and have some wiggle room in your budget.

You have the ability to shop around utilising a comparison tool such as iSelect, which gives you the ability to view what is available in your area for your living scenario. Once costs change, you can shop around.

You run the danger of incurring additional costs as a result of price increases if you wait for prices to change. This includes the possibility that all prices, including the most affordable ones available, will be higher than what you are currently paying.

Nevertheless, in the end, it might be a tight bet to fix your rates, since energy suppliers might make sure that your fixed rate is an amount that is most suitable for them (and that allows them to come out on top at the end of the day).

Try and save energy to lower energy bills

If you choose to fix your rates or even wait to switch, you will likely be able to save money when the cost of electricity increases. In addition to this, or as a less significant option, you might make an effort to reduce the amount of energy you use in order to keep your bill at bay.

According to Ben Henderson, who is also the joint CEO of Next Green Group, it is projected that wholesale energy costs would continue to be high throughout the years 2022 and 2023.

According to Mr. Henderson, “Reduce the amount of energy that is being consumed by implementing efficiency measures such as LED lighting and high-efficiency refrigeration… (or) through cheaper onsite energy supply such as solar power.”

During hot and cold days, the Australian Energy Regulator suggests that you close your home’s doors and windows. Additionally, you should only use the air conditioner when it is absolutely required, and not when the temperature is really high. Ensure that there is sufficient space surrounding your refrigerator and that the doors of the refrigerator are firmly sealed.

Lastly, make sure that you wash your clothes on a cold wash and that you use the clothes line rather than a dryer whenever it is practical to do so.

In anticipation of the impending energy price hikes on July 1st, taking proactive measures can help mitigate the impact on your household budget. Consider fixing your energy rates, exploring alternative options, and implementing energy-saving measures to keep costs under control. With careful planning and prudent energy management, you can navigate through these challenging times more effectively.