Prepaid Energy Plans 

Have you ever wondered about prepaid energy plans, and how they work? Find out all you need to know about prepaid plans here with Savvy.

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, updated on July 27th, 2023       

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Prepaid energy bill

Prepaid energy plans offer a unique approach to managing electricity usage. With these plans, customers pay for their electricity upfront, similar to how prepaid mobile phone plans work. A prepaid meter can provide flexibility and totally eliminate electricity bill shock. Prepaid energy plans have gained popularity in recent years as an alternative option for budget-conscious consumers and those who want to avoid surprise bills. Find out all about prepaid energy plans here with Savvy. 

What are prepaid energy plans, and how do they work?

Prepaid energy plans allow customers to pay for their electricity upfront, in a similar way to how prepaid mobile phone plans work. They are an innovative way of managing electricity usage, offering consumers greater control over their energy expenses.  

There are two different forms of prepaid energy plans available in Australia. The first type is a ‘pay as you use’ system using a special type of electricity meter and a prepaid swipe card which can be loaded up with credit. This type of prepaid system is most common in the Northern Territory. 

The second form of prepaid energy plan is a system also known as ‘bill smoothing’ where you pay a set amount per month for an electricity plan in advance. The amount you pay is an estimate of your previous annual power usage, broken down into a payment amount per month. You receive credits or debits at the end of each year according to your actual electricity usage.

‘Pay as you use’ energy plans and meters

Prepaid or ‘pay as you use' energy plans work by allowing consumers to purchase electricity credit in advance, similar to topping up a mobile phone. Instead of receiving a traditional monthly bill, users pay for the electricity they use upfront in advance. 

This system requires a special ‘pay as you go’ electricity meter to be installed at the premises. These meters allow electricity credit to be added either electronically, or manually using a swipe card that has been loaded up with credit. Users can monitor their power usage and regularly top up their meter when their credit runs low.  

To top up the meter, customers can either make a payment online through a website or can take their swipe card to a participating retailer and pay for a top-up over the counter using cash, credit or debit cards. This credit is then automatically transferred to the electricity meter. 

The specially-installed smart meter allows customers to check how much credit they have remaining simply by pressing a button. The meter will show how much credit is remaining, and will also allow customers to manually top-up the meter using their swipe card, and entering a series of numbers from a credit receipt.  

Pay as you use meters are very useful for multiple occupancy households, where more than one person contributes to the running cost of the house. Each resident or tenant is able to have a swipe card and to make credit payments towards the electricity consumed in the household.  

If credit runs low, there is a $20 ‘emergency credit’ allowance which will keep the power flowing until a top-up can be made. However, once this emergency credit has been used up, power to the household will be switched off until another credit top-up is made. 

These prepaid electricity plans and meters are most commonly installed by NT Power and Water in the Northern Territory, and are offered by Jacana Energy. They allow customers to monitor their electricity usage on a minute-by-minute basis and so understand which appliances are the most power-hungry in their household.  

Prepaid and ‘bill smoothing’ energy plans

These plans are offered by a handful of retailers in Australia, although availability is not guaranteed in every state. They offer the opportunity to pay a set amount each month in advance by direct debit, rather than being billed quarterly for your electricity use. 

For example, ReAmped Energy previously offered an Advance Electricity Plan. This was available to customers in New South Wales, Queensland, and South Australia. Under this plan, customers paid an estimated amount determined by the power retailer, based on other households in the same area with similar demographics. Payment was made in advance via direct debit. After three months, ReAmped reviewed the actual electricity usage and informed the customer if there was any additional payment required, or if a credit would be applied to the next bill. However, as at July 2023, ReAmped have stopped offering this advance plan.  

Bill smoothing is a similar concept, where your previous annual electricity bill is split up into 12 equal payments, which you pay each month. For example, AGL is currently offering bill smoothing, which you can set up online through their website. Other major electricity retailers also offer bill smoothing options.  

Halfway through the year, you are informed how your usage is tracking compared to your monthly payments, and at the end of the year you either pay the additional amount if your account is in debit, or you get credited or offered a refund if you’ve used less power than expected.  

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Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of energy plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys an energy plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.

Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an energy plan. For further information on the variety of energy plans compared by Econnex, or how their business works, you can visit their website.