Understanding the New World of Electricity Offers

Since August 2017, when the Prime Minister summoned electricity retailers to Canberra to see what could be done to improve the consumer electricity price point, electricity offers have been a point of contention. One of the only things to genuinely come out of the meeting was reform by way of the pricing information that is published by retailers, and effectively ‘sold’ to consumers.

On August 31st, 2018, almost a year to the day, new Retail Pricing Guidelines for electricity retailers will come into effect. These guidelines were pushed through by the Australian Energy Regulator to provide clearer and more user-friendly information for consumers about electricity plans.

These new guidelines aim to improve the consumer understanding of the different products and services retailers are offering. Yet understanding an electricity price schedule is still a difficult thing. With so many variances, what do you need to look for to get the best deal?



The biggest cause of confusion in electricity offers is, of course, the infamous ‘discount’. The new changes are not going to fix this completely as they are now including Guaranteed Discounts and Conditional Discounts. Guaranteed Discounts are just a way of reducing the base rate without actually doing so, normally by a small amount of between 5-7%. A Conditional Discount is something that the consumer must do to qualify, this includes agreeing to a direct debit payment, paying on time or early, or even ensuring your solar generation performs to a certain level. 

Discounts are used because energy retailers are exposed to market fluctuations on the wholesale purchase cost, locking in a ‘discount’ with a consumer means that it leaves the base rate flexible.  

The key point is untangling the whole lot to get the effective rate of usage, which in simple terms is how much per kWh you pay.


Next on the agenda are incentives. There has been a noticeable addition to the current electricity offers floating around which are leading towards including incentives. The new guidelines require these incentives to be distinguishable on the offer with a differentiation of non-price i.e. one-off benefits such as gifts clearly listed with their true value. The value of these incentives needs to be measured and usually, over the long run, these deals will cost more.

Bundle Deals

We are also seeing the “add-on” or “partnering” deal becoming part of the scene with a requirement for a consumer to bundle with partner product like solar/batteries or even a telco or TV package to obtain a certain electricity offer. The real value of these will become much clearer with the new disclosure requirements; with cross-subsidisation now being visible to the consumer, the ‘deal’ might not be as good as it seems.

Dummy Offers

One of the biggest reforms was to remove ‘dummy’ offers, offers that were ‘not generally available’. Now there is a requirement to only publish offers that are generally available. This should remove some of the confusion outright, if you like the look of a deal it should be available to you.



Although as a consumer you will be more informed, always remember you make a choice to agree to a retail electricity offer. Certain options do cost more and as always, nothing is ever free, so when reviewing an electricity supplier’s offer, take your time and you will find an offer that best suits your needs.

If you are tired of sifting through the hoards of complicated discount and incentive-driven offers, give LPE’s local customer service team a call and we will give you our best, flat rate upfront.