This is the first newsletter from 2022. It’s already been a big year for the Bill Hero team—we survived our first COVID case, but we’re back at full strength, ready to deliver Savings as a Service for Bill Hero subscribers through 2022 and beyond.
Some big news from the ACCC is that retail electricity bills have fallen to an 8-year low. The main driver for this price change is decreasing wholesale electricity prices due to new supply from renewables now coming online at scale.
Many people scratch their heads when they hear news like this, wondering why if prices are down, their bills are just as high as ever. There are two main reasons why you might feel this way:
The first reason is that wholesale energy costs only account for about a third of your retail bill—the rest is made up of transmission, distribution, retail and environmental costs—so decreases to the wholesale prices do not manifest 1:1 as reductions in retail bills.
The second and more important reason is our old friend the Loyalty Tax
—retailers are always faster to offer more competitive acquisition prices to new customers, than they are to pass through wholesale price reductions as savings for their existing customers.
Your optimal strategy as an energy consumer is to compare more frequently, since the best pricing will inevitably be offered to new customers well before it’s made available to existing customers.
This is exactly the service that Bill Hero provides—we make a detailed, personalised comparison on every single bill, so you’ll always know if there’s a better option available to you in the market.
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