Households could slash more than $1000 off their annual power bill thanks to the removal of the carbon tax along with heightened market competition following the deregulation of the NSW electricity market.

“If you stand still, you’re paying a premium price,” said Gavin Dufty, policy officer with the St Vincent de Paul Society, which conducts the annual pricing survey. “And when your market offer expires, you also default back to the standing offer.

“So you really need to start looking at your electricity and gas bills like you do your home insurance or greenslip for your car.”

It is worth shopping around every year, he said.

“If you don’t shop around, you lose out. There are savings of  more than $1000 a year in some areas. The difference between the discounted market offers and the standing offer is now huge. If people aren’t actively engaged, the potential loss is greater.”

Competition has risen following market deregulation which has attracted more retailers to the market, since the state government no longer exercises  control over electricity prices. Rather, the issue now is how to avoid price gouging, Mr Dufty said.

“If you don’t keep moving, you’re going to lose,” he said, pointing to  the emergence of what could be viewed as ‘loss-leader’ prices for some contracts – cheap introductory offers but where the contract price rises to above market levels once the discounted period ends.

Because the electricity and gas bill is paid in arrears, often  households are unaware what they are paying, which can make it harder for families to make sure they are not paying unfairly high prices.

Households supplied by Essential Energy – which serves much of rural NSW – have access to the biggest price reductions, the price monitoring survey found, with families in other areas able to access smaller discounts if they move from the so-called default or standard tariff, to take advantage of discount offers.

For households in the area served by Ausgrid – the inner city, eastern and the northern suburbs, extending to Newcastle – the difference between the highest and lowest offers is $400, with the difference between the highest and lowest  a more modest $285 in western and southern Sydney and also Wollongong, which is the area served by Endeavour Energy.

To maximise the discount, the household needs to pay via direct debit and avoid late-fee charges.

“Energy is the number one concern for households,” Choice spokesman Tom Godfrey said. “Don’t expect your energy provider will do the right thing by you.

“Compare rates per kilowatt hour, fixed charges, late fees and other charges. Don’t assume you are on the best price. Get them on the phone and push for a better deal.”

For most commercial and industrial customers, the impact of the carbon tax reduction was felt in prices a year ago, with prices moving higher since then.

“The pricing has ticked up a touch,” Energy Action chief executive Scott Wooldridge said. “In the retail market the increased number of retailers has begun to squeeze margins in the household market, which has always been higher.”

In the business market, power prices are cheapest in Victoria, at around 3.9c a kilowatt hour, but the boost to interconnector capacity between Victoria and South Australia at year-end will see higher flows into South Australia, to take advantage of its higher prices of around 6.2c a kilowatt hour.

In NSW, the price is around 4.5c a kilowatt hour which is well below the 6-6.5c seen in Queensland.

“Victoria is the cheapest, reflecting the emerging loss of industrial capacity” which will hit underlying power demand, Mr Wooldridge said. But its price will trend higher once it gains more access to the South Australian market.