Did you know that your postcode can have a big impact on the amount you pay for electricity? It’s true. In fact, a household in one suburb of Melbourne could pay hundreds of dollars a year more than another in a neighbouring suburb, even if they have the same electricity provider and plan, and consume the same amount of energy. Why? Because Victoria is divided by five different electricity distribution networks and costs can vary hugely between them.
Comparing electricity plans across the five networks, Canstar Blue found that prices can differ by in excess of $400 a year. If you’re considering where to buy or rent a home in Melbourne or the surrounding areas, it literally pays to know where your suburb fits into this electricity price lottery.
Victoria’s electricity distribution networks
Depending on where you live in Victoria, your home will be connected to one of five distribution networks. These networks are maintained by five different companies who are responsible for managing the infrastructure and ensuring that power safely and efficiently reaches your TV in the evening. These are the companies you need to call in the event of a power outage or fallen power line. They are:
- Citipower – servicing Melbourne city and inner suburbs
- Jemena – servicing northern and south-western suburbs
- Powercor – servicing western suburbs and western Victoria, including Geelong and Ballarat
- AusNet – servicing outer northern and eastern suburbs, plus eastern Victoria
- United Energy – servicing southern suburbs and Mornington Peninsula
These electricity distributors pass on their costs to you through your retailer. Distribution costs can account for as much as 50% of your total bill.
How do average electricity prices differ across the networks?
Given that some distribution companies cover wider or more remote areas than others, it makes sense that the costs they pass onto customers will be different. AusNet and Powercor service huge areas of eastern and western Victoria respectively, in addition to outer suburbs of Melbourne, and this is reflected by power prices on these networks being the highest, even for those who live close to the city.
Canstar Blue compared the highest-discounted market offers of six different electricity providers operating in Victoria, based on different postcodes spanning the distribution areas. The results show that households on the AusNet network can expect to pay an average of $525.40 a quarter, while those on the Powercor network will pay an average of $471.94. This is despite having the same power plans and identical energy usage.
On the other hand, households in central Melbourne, covered by the Citipower network, can expect the cheapest prices, with an average quarterly bill of $420.59.
However, costs on the three networks covering large parts of metropolitan Melbourne can still vary considerably. Customers on the United Energy network, covering the southern suburbs and Mornington Peninsula, will pay an average of $443.56, while those on the Jemena network, servicing northern and south-western suburbs, can expect quarterly bills of $467.65.
The end result is that just a short distance between suburbs can make a huge difference to your electricity costs. It also means that the electricity providers that work out cheapest on one network could be different to the cheapest on another.
How do retailer charges differ across the networks?
To determine average costs across the networks, Canstar Blue compared prices from the big three power companies, Origin, AGL and EnergyAustralia, plus three smaller providers, Alinta Energy, Momentum Energy and Powershop. Incredibly, four of these retailers work out cheapest on at least one network.
- Powershop emerged cheapest on the Citipower network with an average bill of $415.17, followed by Momentum Energy ($416.35) and EnergyAustralia ($419.56).
- EnergyAustralia worked out cheapest on the United Energy network with an average bill of $435.10, followed by Momentum Energy ($437.33) and Alinta Energy ($441.15).
- Origin was cheapest on the Jemena network with an average bill of $457.39, followed by EnergyAustralia ($458.30) and Momentum Energy ($461.38).
- AGL worked out cheapest on the Powercor network with an average bill of $463.80, followed by Momentum Energy ($465.48) and Powershop ($466.89).
- AGL was also cheapest on the AusNet network with an average bill of $507.11, followed by EnergyAustralia ($514.79) and Origin ($515.81).
It’s important to remember that there are many more energy providers in Victoria, but this example goes to show how prices can differ between them. Generally speaking, the big providers are most competitive on the networks covering large regional areas of Victoria (AusNet and Powercor), while smaller retailers like Powershop and Momentum Energy are most competitive on the more central networks.
What can you do about it?
It’s apparent that your location can have a big impact on your energy bills, but what exactly can you do about it? While those looking at where to buy or rent a home would do well to keep these details in mind, consumers who already live on one of the five networks can only consider their existing plan and work out if they could find cheaper prices elsewhere.
As our example shows, retailers are often more competitive on some networks than others, meaning you will need to dive into the details of various plans in order to compare both usage and supply charges. Get an idea of what represents a ‘cheap’ price on your respective network and work from there.
Wherever you live, you can safely assume that if you haven’t switched providers in the last two years, you are paying more than you need to, so it pays to shop around.
Please note that these costs were accurate at the time of publication and are provided as a guide only.