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?
9 Comments
This is starting to go with streaming services. They're all bundling together, and ramping up their individual prices - so basically reverting to a satellite tv affair of paying for 40 channels when you only want 5.
When you can't win in a price war, sell people more stuff.
This is also why I love open source or revert to code. I also have a selection of hard copy material I can revert to or even use.
Bundle providers for power, phone and internet generally are the worst and most expensive options of all 3 with the worst customer service when things often fail. We are lucky there are still options that are not bundled or not sub companies of each other.
Cloud providers, apps, online stores & online services are notorious. Amazon execs may get a warning for the bundles with prime (fine print so fine you would be right in thinking it was missing) https://arstechnica.com/tech-policy/2024/05/amazon-execs-may-be-persona…
Tie in apps or account management with OS that force bundle subscriptions on you (with huge UI faults and bugs from this management style) often were the bane of my existence 10 years ago and it is much worse now (and why I don't trust owning an iPhone & using a mac together). But that seems prevalent mostly in mainstream OS and not the major dev ones (or dev flavours).
Subscription services with bundles for vehicles, transport or equipment maintenance can go die a horrible death.
Bundles for insurance providers need to be repeatedly checked and the user experiences reviewed to confirm they are still suitable (you can never trust them).
I went with Mercury recently, switching to them for their free appliance. I basically got a $2400 washing machine for $300 and they had the cheapest electricity in the area. Switched gas and broadband too. Yes the broadband is expensive at $130 for gigabit per month, but I just need to stay with them for 2 years, with the washing machine add on being equal to $87.50 discount off that per month for 2 years... its a pretty good deal. Their gas daily charge is also the lowest in the area as long as you also get electricity with them.
Just pays to shop around, sometimes bundles will work out far better. There's a plethora of sites to help, though some are much worse than others.
Yikes that is why I don't go with bundles. You get a cheap washing machine that they got on special & far below retail prices but advertised at the inflated rate, and you sign up to contracts for 2 years at over 50-100more for each service over what is used. With contract break fees. Yeesh. Trust me they are the ones making a mint off you, not the other way around. Even timing electronic purchases would provide more of a discount, especially considering electronics are often the cheapest factor. Even then I got my top of the line washing machine for about 850 from just shopping in a different part of the city and at a different time (the high price for it would be around 3500). I even was able to get the delivery across country for free. There is a big difference when you actually consider all the options even for electronics.
1-2 year contracts are evil when they can increase their prices (fine print of contracts) but you cannot break with them without fees and they are more expensive & unresponsive to when customer circumstances change.
Now if they offered you a private dental treatment or private colonoscopy for that price, that would be a significant thing as it is rare, expensive, hard to match at a lower cost, limited choices or alternative providers and difficult to access at the best of times.
But cheap electronics they are falsely advertising to trick you into 2 years contracts at inflated multiservice prices...
I was able to save more than 1000 each time I switch power providers for different services with more flexibility, for massive high speed high data internet we pay a fraction the rate of others. What they are charging you is jaw dropping. Now I actually just run multiple high use power devices all the time because the costs are so low but if we timed it or switched later I could save another grand over the course of a year. I picked an option that gives me more data visibility but I have the devices for more accurate measurements at home so my loyalty is only so far as they are expedient for now. For internet we will likely switch soon.
If there was any budget crunching it would be better to have your own choice at electronic purchases (especially where and what brands esp when you want better customer services for device longevity) and to be able to be flexible to be able to adjust your fixed cost bills to lower rates as these services can be vital and the differences significant. There are limits to how much families can cut from food and housing costs to make up housing service bill cost differences.
Way back when that internet thing was coming into the public consciousness, my 'billing system' colleagues were all thrilled at the prospect that their company could take their wonderful 'billing system' and bill customers for anything.
Obviously the marketing people were thrilled at prospect too - where they could take generic products like electricity, gas, water, etc. and wrap them up in all sorts of obtuse 'plans' and then bundle them with other stuff people had to buy.
But not much of this actually happened under the then current management which many thought were old fuddie-duddies. Why couldn't they see that other suppliers could save a fortune by not having to buy and maintain their own billing system?
Seems my generation has risen through the ranks and is now putting what they thought was an excellent idea into practice.
Sad, huh?
(Billing systems really aren't that complex but the people who work on them think they are.)
Wouldnt say it was sad so much as human nature.
There's a lot of opportunity out there to acquire legacy businesses and run a stream of more modern practices and technology over them.
That said there's a lot of people on a continuous treadmill of trying to reinvent the wheel at the expense of mastering the basics.
"Daily charge". A term ripe for opportunities to rip you off.
I caught Genesis Energy out on "line charges" which they had overcharged. Much more than the real line charges. They had not passed on price deductions of that actual item. Theft I believe.
Outcome 1. They refunded me about 50% of what they had charged me. Several years. Lotta money.
Outcome 2. They changed the item from "line charge" to "daily charge". Corporate brilliance giving them licence to charge what they like. A sleazy solution.
Outcome 3. Lots of people still believe that item is the actual line charge. That suits the big Genesis just fine.
Government supervision is needed. Each power bill should have each item accurately shown as the actual figure. Energy, line charge, Electricity Authority, Meter rental etc.
I actually received a call from my 2degrees on Friday offering me a bundle deal on power.
Currently, I have mobile and broadband with 2degrees. They called on Friday offering the following:
1. No contract, can opt out on power or broadband or mobile at any point in time;
2. Ongoing $15/month discount on broadband (which I've had for about six months currently, initial term was for 12 months), but they've extended it for another 12 months;
3. $30/month discount on power for 12 months, then $20/month discount after that so long as I keep power/broadband bundled.
The rates they're offering on power worked out to be about $4-$5/month more expensive than my current provider (whose rates are about to go up again).
I said sign me up. No downside to me.
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