Utilities costs are skyrocketing, and adding to inflation, so you really should shop around to shave off whatever you can from your burgeoning monthly bills. One way to do it is to buy more than one service from a provider: you go for a bundle offer.
The idea here is that you put more of your business with one provider, and for a lower overall bill. For example, instead of getting just electricity supplied, you add gas from the same provider; or broadband, or any combination of the three. And mobile phone service, if that’s available.
It could work well, if all the services offered are of a high standard and quality. Just one bill to deal with is convenient too.
On the other hand, it assumes an electricity provider (say) is also a great supplier of other services. Once you sign up, that’s all your utilities supply eggs in one basket, and you might find that if you’re not happy with one of the services provided, well, tough: switch to another supplier, and you could be penalised financially for not buying the whole kaboodle from one place, or have access cut off to other parts of the bundle.
Making sense of and comparing the bundles on offer isn’t always the easiest either. Do you want a bundle with a plan that has lower usage charges, or even none, during one particular time of the day, or over the weekend? If you pick one of those options, factor in the line or connection charge, add things up with the particular usage scenario you’ve now committed yourself to and… what’s that famous Theresa Gattung quote again, about confusion as a marketing tool?
Some suppliers take it up a notch though, and try really hard to push consumers into signing up for bundle deals. This is what happened to yours truly, who has gas supplied from Genesis Energy’s Frank Energy, a company that reckons it is “pretty awesome” and which promises to “sell it to you straight without the gimmicks.”
At the end of March, one of those irritatingly titled “your prices are changing” emails arrived from Frank Energy. As a related aside, if the email was to align with the company values, it should’ve been called “we’re jacking up your charges” instead because it was about paying heaps more, and not a cent less.
Long story short, while the usage charge went up modestly, from $7.40 c/kWh to $7.80 c/kWh, or around 5.5% which is survivable, the daily rate jumped from $1.85 a day ($675.50 a year) to $2.60 a day ($949 per annum). A double-take confirmed that that was indeed the new daily rate charge, an increase by a whopping 40.5% or $273.50. And then you pay GST on top.
That’s almost as much as three gas bills before Frank Energy hiked the daily charge and seems like Turkish and Argentinian level inflation. So what’s going on here?
An email to Frank Energy’s help desk with a “please explain” note was answered nine days after. The leisurely delivered response was polite, but curt and dismissive:
“Thanks for your email. Unfortunately due to price increases we are having to put our prices up for our customers. The daily charge is a cost we have to pay to the meter owner and when this increases we sadly have to increase how much we charge.”
“There’s a meter owner clipping the ticket? Who’s that?” I grumbled, and looked at the original email announcing the price hike again.
“Sign up for electricity with Frank at the same address as your gas and your new daily charge shown above will be $1 per day less (ex gst) - saving you more than $400/year (inc gst).” Paying less is never wrong, but wait a minute, Frank Energy is happy to lower the daily gas charge to $1.60 plus GST if I move the electricity account to them? Which is less than the $1.85 plus GST a day they were charging before.
If there’s cross subsidising, it’s not immediately apparent from Frank Energy’s electricity pricing which is the same whether you add gas to the bundle or not; the power charges don’t change, but if you only have gas supplied, you pay $1 plus GST more a day. (So almost three bucks a day in total, or $1091.35 a year).
Disappointed to again have it confirmed that loyalty to one provider - OK, customer inertia then - will be punished, the “buy more from us or you’ll pay more for what we already supply” marketing stuck in the craw and a complaint to Utilities Disputes was made.
How much does the price hike translate into monthly then? The latest bill was a steep $123.08. Of that, $33.12 was for actual gas usage which is reasonable, and $73.90 for the daily charge which is a lot. Plus $16.06 GST. Clearly the Meter Owner’s making a killing here.
While they may seem attractive initially, service bundle plans aren’t necessarily in the best interest of consumers. The Commerce Commission has been keeping an eye on the situation for some years now, following complaints of confusing contractual terms and pricing for bundles.
Providers have to disclose if pricing for a service in a bundle is higher than outside it, and if consumers can’t switch one part of it without losing access to the rest. And, all prices have to be displayed including GST and there’s anything to pay when cancelling a service while in contract.
That's good, but could we add to those rules a ban on hiking costs for existing customers, unless they agree to pay a supplier more for a bundle?
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