Home Blog Energy supplier 11 Ways Energy Suppliers Boost Profit at Your Expense


You’ve just signed up for a new energy plan with a massive 38% discount. What a relief. Now you can forget about it for a few years, right? Unfortunately wrong.

In this blog, we explain the “11 common ways that Energy Suppliers have you paying above market rates without you noticing, by exploiting your inattention and loyalty.”

4 Common ways you missed out on getting the best plan

1. You got savings but you missed the best plans when you signed up

A comparison service, even the best ones, only compare about a third of the market. They are paid by the suppliers and not independent. Chances are, if you used a comparison service you’ve missed out on the best offers for you. Perhaps a sales representative ‘sold’ you a single supplier – it’s almost certain you missed out big time! Energy Umpire proudly compares every supplier.

2. You signed up for dual fuel

Mostly dual fuel contracts are significantly more expensive than having separate suppliers for each fuel, even with the cross fuel discounts that some suppliers offer. The suppliers view dual fuel as a ‘convenience’ for which they can charge a premium. These customers are also less likely to switch as the task of choosing a dual fuel supplier is more difficult.

3. You used a single supplier for all your sites

Most businesses think incorrectly that it will be cheaper to use a single supplier for all their sites. This is almost never the case except for the huge national businesses. For example a supplier may be competitive in one area but not another, for one tariff type but not another, for large sites but not small ones.

4. The discount

Remember a few years ago when 5-20% was a good discount? Now some companies are offering discounts of nearly 40%. What they don’t mention is that the headline rates have increased to more than compensate for the higher discounts. Essentially discounts are just a marketing hook to create an illusion of value.

7 Common ways your loyalty is exploited

1. After six months or less, your price goes up

Even when you sign up to a plan suppliers can increase your rates whenever they choose, mostly every 6 months, but often sooner. That means, in most months, several suppliers change their rates. Unless you’re looking, you lose that competitive edge.

2. The contract expires

When your contract expires, your rates can revert to the much higher ‘standing offers’ and no discounts apply. All suppliers have standing offers that are the default rates if you haven’t made a definite choice of plan. These can be 30-40% higher than their best rates.

3. The ‘benefit period’ ends

Often there is a ‘benefit period’ or honeymoon, typically a year, for which favourable rates or a discount applies. At the anniversary your prices just increase without any notice.

4. A new plan is released, and your plan is no longer current

The suppliers offer plans to new customers but not their existing customers. They then manage customers on the newly obsolete plan by increasing their rates.

5. You don’t pay on time

If you don’t pay on time the penalties can be huge and disproportionate. For example your 35% discount can be withdrawn.

6. You switch, suddenly a better deal is offered

Nearly all of the suppliers have ‘win-back’ teams that are authorised to offer plans that are not available except to customers that have decided to leave.

7. You switch to Solar

Solar customers are among the most unfairly treated by many energy suppliers. Most but not all have higher rates or lower discounts for solar customers. It is a more complex task for customers to compare with solar. Suppliers see this as an opportunity to extract a margin, that’s business after all, but it’s not solar friendly.

Could this be happening to you?

If you’re loyal and haven’t been paying attention, you’re almost certainly paying well over the best market rate. Supplier profit margins are 22% in Victoria, about twice those in other States and about 2 1/2 times those in the UK. For SME’s, average savings are around 10%, savings of 20% are very common. We’ve had cases where customers have halved their bill.

How to fight back?

For business and residential customers, we recommend our Energy Comparison Service. This gets you the Best Rates Forever. We achieve this by finding you the best deal, negotiating with your energy supplier and watching your bills. Visit Energy Umpire to get a Free Savings Calculation.