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How changes to electricity laws are going to increase your bills

 

Recent changes to the laws governing electricity have set many families up for at least a $700 annual increase in energy bills. In fact, these changes have made it so that network service charges account for 50% of the actual bill. The power you’re using only accounts for 20%.

In addition to this, there is a potential new charge of $47 per kilowatt hour, that could be applied as a critical peak surcharge. Now, people will be warned at least a day in advance which hours these are, and these peak periods cannot exceed four hours, but the charge still seems like an excessive hike to many.

This has left people, individuals and families alike, scrambling to see how they can make up the difference. This article is going to overview some of the tactics people have taken to try to compensate for the coming increases in bills, and provide you with information about these changes.

Method 1: Giving the energy company control of the air conditioner

Air conditioners are great, but they often require energy during peak times of the day (where it’s at its most costly). 75% of Australians have air conditioners, 78% of Victoria’s residents, and over 70% in the ACT. It’s a natural place to look to save money. Several people are choosing to look to coolers instead (over 90% of Southern Australians have chosen this route) to try to save cash. Several people are choosing to transfer their air conditioner’s control back to the energy company, or to switch to coolers.

Method 2: Solar Panels

The Australian Energy Markets Commission has got realistic about energy use, their CEO Paul Smith stating that if users keep behaving the same and not considering how these changes impact them, they may well end up paying more, but that they don’t have to.

Solar panels are a way to generate personal electricity at a lower cost, to change something you’re doing to keep your bills lower, and it is becoming increasingly popular.

Location, location, location

Most people are aware that the proposed increases to the cost of electricity is going to have an impact on their bills, but it may be considered a lesser known fact that the degree of impact will be heavily effected by where you live.

So what areas are going to be the hardest hit? Homes around Adelaide, Brisbane, Melbourne and Sydney. This impact isn’t arbitrary, it is primarily due to the size of homes in that area and the range of temperature variation that naturally occurs. This may seem intuitive, larger homes require more heating/cooling and variation produces more frequent activation of the heating/cooling systems, but it is a fact that many have overlooked when planning their budget for energy.

Criticisms to the changes

AEMC has released a statement from Mr. Smith that essentially captures their attitude towards these changes, stating it is “about consumers taking … more of an ownership for their outcomes.” Critics of the bill however, including the AECM consumer advocacy panel, have raised concerns that not every one is able to control their outcomes to the same extent. (For example, the weather factor we talked about earlier is hardly something you can adjust for).

One particularly vocal energy policy analyst, Tony Wood, has cautioned consumers about the impact of cross subsidies. He has said we are currently set on a track that will cost at least $300, disproportionately to the $1000 burden on the network. This means anyone owning one of these coolers is looking at a price hike, unless they subsidize.

Summary

It is important to be aware of these changes, and what you can do about it, to ensure you’re properly offsetting these changes to keep your bill as low as possible. The changes aren’t without criticisms, but they do seem to be coming, so do your research today to avoid the higher energy bill tomorrow!