The amount households in New South Wales pay for energy is dependent on a range of variables, including their contract type, retailer, the specific plan they sign up to, the tariffs they use and the discounts they may receive. However, Canstar Blue research shows that another factor can also play a costly role – location.
The area in which a customer lives has a direct impact on their electricity costs, as charges can vary considerably between energy distribution networks, even with the same retailer. This is because distributor costs are built into retailer plans and can account for up to 50% of your total bill.
For example, an Origin customer in the east of Sydney would pay a different amount to another Origin customer in the west of the city, even if they were signed up to the same energy plan and had identical usage habits. However, an Origin customer in regional NSW can expect to pay significantly more than both.
There are three electricity distribution networks in NSW:
- Ausgrid – servicing inner, northern and eastern metropolitan Sydney and surrounding areas, including Central Coast and Newcastle
- Endeavour Energy – servicing southern and western metropolitan Sydney and surrounding arrears, including the Blue Mountains and the Illawarra
- Essential Energy – servicing country and regional NSW
The result is that households in neighbouring suburbs can expect different electricity bills, and that retailers are cheaper on some networks than others.
How do costs compare between networks?
Canstar Blue has compared plans from the four major electricity retailers operating in NSW – Origin, AGL, EnergyAustralia and Red Energy. Using the same single rate tariff plans with the same discounts applied, the research found that households on the Essential Energy network are paying the highest price for power, with those on the Endeavour network usually paying the least.
Given that the Essential Energy network services country and regional NSW – from Bathurst all the way west to Broken Hill – it is perhaps not surprising that costs are higher here. However, consumers may be surprised to learn the extent to which prices differ. There are more subtle cost differences between the Ausgrid (purple) and Endeavour (green) networks, but these will add up over time.
Households in the Sydney suburbs of Bankstown, Auburn and Ryde, for example, can expect to pay more for electricity than those in the neighbouring suburbs of Fairfield, Parramatta and Liverpool, even if their plans and usage are the same.
As the table below shows, average costs (before plan discounts are applied) between the Endeavour and Ausgrid networks vary by roughly $10 per quarter, while average prices on the Essential Energy network are up to $90 more expensive.
|Red Energy||Easy Saver 10%||$499.64||$490.94||$575.03|
|Energy Australia||Flexi Saver||$530.72||$531.93||$627.08|
|AGL||Set and Forget||$546.96||$539.03||$645.75|
Costs based on annual usage for average five-person households broken down into quarterly payments. Retailer costs based on highest discounted market offers before discounts are applied, January 2017.
Red Energy proves cheapest across the three networks, but there are some notable differences. For example, Origin customers on the Ausgrid network can expect to pay about $24 more a quarter than Origin customers on the Endeavour network. Red Energy and AGL customers on the Ausgrid network can also expect to pay slightly more, but it’s a different story with EnergyAustralia, with customers on the Ausgrid network paying marginally less.
While households on the Essential Energy network will pay higher rates regardless of their retailer, the difference in costs is significant. AGL customers on the Essential network can expect their bills to be about $105 per quarter more expensive than AGL customers on the Endeavour network. Likewise EnergyAustralia customers on the Endeavour network will pay close to $100 more.
After conditional discounts are applied to the plans compared, EnergyAustralia becomes marginally cheaper on the Ausgrid and Endeavour networks, while Red Energy remains cheapest for regional customers on the Essential network.
|Red Energy||Easy Saver 10%||$449.68||$441.85||$517.53|
|Energy Australia||Flexi Saver||$439.89||$441.24||$528.32|
|AGL||Set and Forget||$453.34||$446.78||$543.78|
Costs based on annual usage for average five-person households broken down into quarterly payments. Retailer costs based on highest discounted market offers after discounts are applied, January 2017.
What can you do about it?
If you own a home on one of these networks, there is obviously little you can do about it, other than to compare plans to make sure you’re getting the best deal possible in your area. If you rent a home, or are considering where to buy, these results are worth keeping in mind.
Please note that these costs were accurate at the time of publication and are provided as a guide only.