Different pricing models in the tariff calculator

Different pricing models in the tariff calculator

Competition on the Austrian retail market is slowly picking up and bringing a range of new and potentially interesting products for households and small business consumers. Many companies are thinking outside the fixed-rate box and are coming up with new pricing models.

Three basic models at a glance

Traditional products
The vast majority of households and most smaller businesses have had this kind of contract all their lives. The electricity or gas price in cent/kWh is fixed in the contract. If the supplier changes (i.e. raises) this rate, the consumer can object. Regardless of any minimum term contracts, s/he can immediately switch to another supplier. The current supplier must continue to deliver energy at the original price for some time after the consumer has objected.

Price-guaranteed products
In the first model, consumers have a right to object and switch if the supplier raises its prices. But many consumers fear that their new supplier could itself raise prices just after they’ve switched. They would then end up paying just as much as before. This is why often, consumers do not bother to switch after price increases, even though they could save money.

Several suppliers are now offering price guarantees to address this consumer need for stability. They guarantee a certain rate, sometimes for quite extended periods of time (for instance until the end of the year). Their promise of course holds both for upward and for downward price changes. There will be no price reductions during the guaranteed period.

Floaters
These are products with automated price changes. The energy rate is adjusted at regular intervals, e.g. once a month or once every three months. The formula for the adjustment is pre-defined by the supplier. Normally, floaters make reference to an index such as exchange prices or a specified price index. In these models, consumers pay varying rates. They rise and fall along with the chosen index.
Basically, the supplier’s purchasing prices are put through the formula that is pre-defined in the contract and the result is the rate that consumers pay. The applicable price is calculated for each period and sent to consumers e.g. via e-mail or text.
This means increased price transparency for consumers. A sinking index means lower rates and smaller expenses. Rising indexes have the opposite effect. A simple model.
If you opt for such a contract, you should make sure that the contract or price sheet specifies: the starting price at an explicitly defined point in time; the price adjustment formula; and the description of the underlying index.
Please note that the tariff calculator always uses the currently applicable price, i.e. at the time you make the query, also for floaters. Annual energy costs then result from the monthly costs multiplied by twelve. E-Control does not make projections for the development of the indexes or the energy price.

How long ago was the last price change?

From our consumer hotline calls we know that many households would like to know when a certain supplier last changed its rates. This is why we have improved the tariff calculator to include this information also. You will find information about the most recent price changes right below the price and savings information for each supplier. For traditional products, this enables consumers to easily identify when the price was last changed. For products with guaranteed prices, the calculator tells you how long the guarantee applies. And for floaters, the information given refers to the rhythm of price adjustments, e.g. monthly or quarterly.

Of course, you can also filter to only get results for particular pricing models. If you prefer a particular model, check the corresponding box. The list will only display offers with your chosen pricing model. It will continue to show the savings that would result from switching from your current contract, even if you have a different pricing model at the moment.

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