As many as four in five households could be paying less for electricity by shopping around or calling providers to ask for a better deal, according to the consumer watchdog.
Newly released numbers from the Australian Competition and Consumer Commission (ACCC) suggest the so-called "loyalty penalty" intensifies the longer households wait to switch.
"If you haven't changed electricity plans in the past 12 months, chances are you are paying more for your electricity than you need to," ACCC commissioner Anna Brakey said.
"We are urging Australians to take some time this holiday period to have a look on the Energy Made Easy or Victoria Energy Compare websites to see if there is a better plan."
Monday's ACCC report shows customers on flat rate market offers that are two or more years old experience average annual prices 16.9 per cent, or $317, higher than those on newer offers.
The report covered the National Energy Market, which includes NSW, Victoria, South Australia, and southeast Queensland.
"While some level of benefit for being on a newer offer is necessary to incentivise consumers to switch offers, it appears some customers are incurring potentially disproportionate penalties for not regularly engaging," the report says.
Is changing plans really a 'hassle'?
Finder personal finance expert Taylor Blackburn said there was a lingering perception switching energy providers was difficult.
A survey of 895 respondents by the comparison site found more than one in five people believed changing was a hassle.
"You say the word 'kilowatt hour', and people's eyes kind of glaze over," Blackburn said. "It actually is really simple."
At its most basic, households are charged a certain amount per day and a certain amount per kilowatt hour they use, he explained.
Compared to driving around the streets for a cheaper tank of fuel, changing energy providers is as easy as making a phone call.
Blackburn stressed great deals "turn into pumpkins after midnight" and recommended noting down expiry dates on bargain introductory offers as a reminder to switch.
More than a third on offers two years or older
While efforts have been made to encourage customers to shop around — including making companies alert them when cheaper plans are available — the ACCC found more than a third were still languishing on offers two years or older.
More than 80 per cent of Australian households in the National Electricity Network could be paying less by shopping around or calling their energy provider, the commission said.
Confusion around "best offer" or "better offer" messaging to customers was cited as a possible barrier to switching, with some retailers found to be using the same labels for both new offers and old ones.
A residential electricity bill is seen in Brisbane, Wednesday, May 15, 2024. (AAP Image/Jono Searle) NO ARCHIVING Source: AAP / Jono Searle
On average, residential customers on flat rate offers had experienced a 4 per cent reduction in energy prices between August 1 2023 and August 1 2024.
Variations were recorded across other types of energy plans and different regions.
The average decline was still not enough to fully unwind the price growth from 2022 to 2023, however.
"This means that prices in 2024 are still higher than prices before the energy market volatility events in mid-2022," the report says.
The ACCC's assessment of calculated annual prices does not account for , which the consumer watchdog says would have led to reductions in the actual electricity bills received by many customers.
Treasurer Jim Chalmers said energy prices were coming down for a range of reasons.
"Our reforms are helping, more people are shopping around for a better deal, there's stronger competition between the retailers and better conditions in international energy markets," he said.
