Canstar Blue has analysed New South Wales and Victorian energy company plans and found some of the biggest discounts come with the highest usage rates or supply charges.
Simon Downes of Canstar Blue said consumers are given the impression energy plans with big discounts offer better value.
“Some genuinely provide competitive value,” he said.
“The only way you can be sure you’re getting a good deal is by comparing the usage and supply charges of providers.”
Canstar used energy consumption statistics from the Australian Energy Regulator to determine which were the best deals for a five-person household, in Sydney on the Ausgrid network.
The highest discounts were from Dodo Power and Gas (20 per cent) and Energy Australia (18 per cent) with Red Energy not far behind. The discount is applied when the customer pays their bill on time or via direct debit.
Victorian energy suppliers are more competitive.
Canstar Blue compared 11 different electricity retailers in Victoria, and all but one of them offered 28 per cent or more off usage charges or entire bills for paying on time, by direct debit or both.
Momentum Energy was the exception, offering a relatively low 2 per cent discount, but it worked out to be one of the cheapest options.
In Queensland, the market is less competitive, with only seven providers in the market, and an annual difference between the cheapest and most expensive being $50.
Likewise South Australia, which has only six providers and the difference between the cheapest and most expensive being $25 per annum.
“These high discount offers put consumers in a position where if, for whatever reason, they fail to meet the conditions, they will be left paying a far higher amount,” Mr Downes said.
“In addition, these offers typically only last for 12 months.”