The South East Queensland electricity price market was deregulated in mid-2016, and that means all-out war amongst electricity retailers as they compete for your custom.
Understanding electricity offers can be confusing at the best of times, and these recent changes don’t make things any easier. That’s why Canstar Blue has prepared this quick guide to walk you through the basics and arm you with the knowledge to find an electricity deal that’s right for you.
Who provides electricity in Queensland?
Electricity prices were deregulated in Queensland from July 1 2016. While it seems the full effect of this change has not yet been realised, there have been at least two new energy companies enter the Queensland electricity market – Mojo Power and Urth Energy. Others including Powershop and Momentum Energy are also expected to follow suit.
For those living in regional Queensland, your only choice of provider is Ergon Energy. Those living in South East Queensland currently have a choice of 13 electricity retailers.
- Click Energy
- Diamond Energy
- Dodo Power and Gas
- Energy Australia
- Lumo Energy
- Mojo Power
- Origin Energy
- Sanctuary Energy
- Simply Energy
- Urth Energy
Understanding your energy bill
Despite all the numbers and jargon, understanding your electricity bill isn’t as difficult as it might seem. Here is a quick explanation of some of the key components of your electricity bill.
- Supply charge: This is a daily charge for being connected to the electricity grid. Supply charge rates vary across locations and retailers, but it generally costs Queenslanders around $1 to $1.50 per day. This is a cost imposed by the electricity distributor for the maintenance and development of electricity infrastructure.
- Usage charge: This is the rate you pay for the electricity you use. This is usually a charge between 21c and 30c per Kilowatt Hour (kWh) of electricity. Usage charges vary across retailer and depend on the tariff structure of your energy plan.
- Single rate: The same rate is applied regardless of the time or the amount of electricity used.
- Time of use tariff: A different electricity rate is charged depending on the time of day. There are three periods: Peak, off-peak and shoulder. The time allocations vary across retailers, but peak period generally runs from 4pm to 10pm, off-peak runs from 10pm to 6am, and the shoulder period is all other times. Peak period is the most expensive time to use electricity, shoulder period is a little cheaper, while off-peak is the cheapest.
- To sign up to a time of use tariff, your electricity meter must be able to take multiple readings.
- Block rate: This tariff charges a different rate depending on the amount of electricity used. For example, a certain rate (eg 24c/kWh) is charged for the first 1000 kWh block of electricity. For the next 1000kWh block of electricity may be slightly higher.
- Controlled load: A controlled load is also called a dedicated circuit. Essentially, it is a tariff structure whereby a large appliance (usually the hot water system) is charged at a lower rate than the rest of the house.
What does deregulation mean for Queensland?
Queensland has allowed retail competition for several years, but it was only in 2016 that prices were deregulated. This means electricity retailers are free to set their own prices once a year on July 1.
New South Wales, Victoria and South Australia already have price deregulation. Queensland’s decision to follow suit comes after the productivity commission reported that price deregulation may raise competition and put downward pressure on electricity prices.
With many Australians experiencing rising electricity prices, many debate whether deregulation works at all. Some say that allowing profit-seeking retailers to set their own rates means prices will be marked up. Supporters of deregulation claim that rising electricity prices are the result of supply charges imposed by distributors, and that retail competition actually mitigates the cost to the household.
It is still too early at this point to say whether or not deregulation has been a success but results so far have been largely underwhelming. Since July 2016, only two new retailers have expanded into Queensland and electricity prices have increased 3% on average.
Which energy provider should you choose?
If you’re looking for the cheapest electricity retailers in Queensland, Canstar Blue has compared the prices of leading retailers. But being the cheapest retailer doesn’t necessarily make it the best. To find which retailer fellow Queenslanders prefer, look no further than our electricity provider satisfaction ratings.