Is switching electricity retailer safe? What actually happens in Australia

Plenty of people put off changing retailer because it feels like something could go wrong: a gap in supply, a surprise fee, a contract they cannot get out of. In practice a switch in Australia is an account change between two companies, and the grid does not notice. Here is what happens behind the scenes, and the few things worth watching.

Three companies, one of which you choose

Your electricity involves more players than the name on your bill. The distributor (Ausgrid, Energex, SA Power Networks, CitiPower and so on) owns the poles and wires to your street. Energy Made Easy’s glossary says you call the distributor, not the retailer, when supply stops because of fallen lines or a fault. The distributor is decided by your address and never changes.

The retailer buys power on your behalf, sets your rates and sends the bill. That is the only company you swap.

The third party is the regulator: the AER in NSW, Queensland, South Australia, Tasmania and the ACT, and the Essential Services Commission in Victoria. They set the rules both retailers must follow.

So when you switch, nobody climbs a pole. Your meter stays on the wall. Your lights stay on.

What the new retailer does for you

You sign up with the new retailer, and it arranges the transfer with the old one. EWON’s factsheet walks through the sequence: you get a welcome pack or a copy of the contract, the new retailer discusses an expected transfer date with you, and the account moves at a meter read. With a smart meter that can be within several business days. With a meter that is read by hand every quarter, the retailer may use an estimated read or a read taken in the past few months. If the date slips, the new retailer must tell you.

Afterwards the old retailer sends a final bill. Pay it, and if it never comes, ask why. An unpaid final bill can end up with a debt collector, which is the one real risk in the whole process, and it is entirely in your hands.

Ten business days to change your mind

Energy Made Easy puts it in one sentence: by law you have a cooling-off period of 10 business days when you sign up to a new energy contract, and you can cancel without paying an exit fee. It does not matter whether you signed online, over the phone or with a salesperson at your door. If the salesperson did not follow the rules, the cooling-off period can extend to between 3 and 6 months.

That makes a switch low-risk to try. Read the plan’s information document during those ten days, and if something does not match what you were told, cancel.

Exit fees: what the law allows

In NSW, early termination fees are banned. EWON lists the exceptions: a retailer can recover the cost of equipment it installed at your home (solar panels, a battery, a smart meter) and, for some fixed-price benefit periods, a charge that was set out in the contract and is a reasonable estimate of its costs. In Victoria, EWOV says a fixed-term contract may carry an exit fee. In the other states it depends on the plan, and Energy Made Easy lets you filter for plans without one. Always check before you sign; never after.

If your retailer fails

Retailers do occasionally go under. EWOV explains what happens: if your electricity or gas company stops operating, you are automatically transferred to a new company. You do not need to do anything to stay supplied. Once the transfer is complete, look at the plan you have been given, because it may not be the cheapest, and compare as usual.

How to spot a pushy or dodgy seller

Energy is still sold at the door and on the phone. Energy Made Easy sets out what salespeople must do: show identification with their name and employer, tell you why they are contacting you, make sure you understand what you are agreeing to, tell you about cooling-off, and stop when you ask. They must not be pushy or make promises that are not true. Door knocks are allowed only from 9 am to 6 pm on weekdays and 9 am to 5 pm on Saturdays; calls from 9 am to 8 pm on weekdays and 9 am to 5 pm on Saturdays. Never on Sundays or public holidays.

Warning signs are simple. Someone who asks for a bill “to check your discount”, who says your current plan is ending when it is not, or who claims to be from the government. You never have to hand over your bill or account number on the doorstep. Ask them to come back another day and check the offer yourself on Energy Made Easy or Victorian Energy Compare.

Two situations to mention when you sign up

If you are on a payment plan, EWON notes it is cancelled automatically when you switch, and the old retailer does not always have to set up a new one on a closed account. Talk to it first.

If someone in your home relies on life support equipment, tell the new retailer straight away. Energy Made Easy says a registered household must not be disconnected and must get at least four days’ notice of planned interruptions.

Free help if something goes wrong

Complain to the retailer first and write down names, dates and reference numbers. If that fails, the energy ombudsman is free: EWON in NSW 1800 246 545, EWOV in Victoria 1800 500 509, EWOQ in Queensland 1800 662 837, EWOSA in South Australia 1800 665 565, the Energy Ombudsman in Tasmania 1800 001 170, and in Canberra the ACT Civil and Administrative Tribunal on 02 6207 1740. For misleading sales, you can also report the seller to the ACCC.

Switching is the normal case

Energy Made Easy estimates that around 91% of customers in the DMO regions are on market offers, plans they chose at some point, rather than the default standing offer. Changing retailer is routine. When you are ready, you can compare plans for your postcode, and a free contract alert will tell you when your benefit period or contract is up for review.