utink blog

There was a kock on the door and my mum answered. The person on the otherside was a representative from a power company Red Energy. After introductions and credentials the rep proceeded to convince my mum that they are able to better her current power service provider's offer. Being on the lookout for ways of reducing costs my mum decided to let the person in. The Red Energy rep asked for a latest power bill which my mum found then handed over. The rep proceeded to do the calculations and when the comparsion was made came to the conclusion that my mum would be $$$'s better off with the offer made by Red Energy. In the calculations a period of 90 days was used as specified on the current power provider's bill. So, not being savvy with power bill details, my mum took the reps word for it and being further convinced by the rep mentioning the fact that quite a few of the others in the area are changing over as well my mum decided to go ahead with the deal. On that the rep then drew up the contract which my mum subsequently signed.

I arrived at my mum's place a day later whereupon she informed me that yesterday she had signed off on a 'better deal' with a new power retailer Red Energy. Having dealt with power company reps before and knowing how much they embellish their figures to their favour I gathered together all the paperwork I could regarding the Red Energy's offer and decided to crunch the numbers at home for myself.

So, this is what I found:

Using the computer I punched in all the figures to my Power Calculator app, hit 'calculate' and the result was not surprising. Not only was my mum NOT better off per quarter than her current power company AGL she was, infact, well and truely WORSE off! Like I said, no surprises there.

In analysing the difference I found that the Red Energy rep didn't take into account the wopping 35% On Time Payment discount that AGL used on it's bill but used their 10% OTP (On Time Payment)  discount  with their offer? Obviously this would result in a large discrepancy with the outcome and be biased towards the Red Energy offer. Whether this was deliberate or not (I lean towards being deliberate) it was enough to sway my mum's decision and run with the new offer. In my mum's case the OTP discount would always have been activated as she has a Direct Debit setup with AGL and her bank such that the amount owing would always deducted from her account by the 'due by date'.

The figures:

As I mentioned earlier there is an app on my website that allows you to punch in all the details to compare a current power service provider figures with those of a new offer. You can use the Power Calculator app yourself by going to this address. Check it out. It's free to use anytime you wish.

Below is a copy of AGL figures compared with the offer made from Red Energy...

In Conclusion:

These power companies prey on the fact that when door knocking they catch the occupant by surprise and that the occupant is not aware of the details that make up a power bill at the time. As such sales persons can pretty much say what they like to make their offer look good with the occupant none the wiser. This could result in an outcome of one signed contract that allows them to say bye bye to your current power provider and hello to their provider? It is done and dusted unless the occupant intervenes before the cooling off period but the power companies are counting on this not to happen. My advice is to never sign a contract on the day. Take a day or two to analyse or get someone else to analyse the figures and if everything 'adds up' then sign but never before.

Try this Power Calculator app.