Queensland households will soon be given new ways to save on electricity bills, with the increased rollout of smart meters and new ‘demand’ pricing tariffs.
Currently, most households in Queensland are signed up to single rate tariff plans, meaning they are charged the same rates for electricity regardless of the time of day they use it.
However, the Australian Energy Regulator (AER) has announced that, in conjunction with smart meter reforms, energy retailers will be able to offer customers a range of new tariffs, bringing cheaper prices during periods of low demand.
How do the new tariffs work?
The new tariffs are likely to be similar to those now available in Victoria where households can benefit from significantly lower prices during off-peak periods, but there are much higher rates at times of high electricity demand, generally from 3-9pm.
This could mean potential savings for households with high energy usage at night, while providing the opportunity for all customers to save by modifying their usage habits, including using dishwashers and washing machines late at night or early in the morning instead of at times of high demand.
Some Queensland households with smart meters can already subscribe to time of use tariffs, which divide a day’s electricity usage up into three segments and subsequent prices, based on peak and off-peak times, as well as ‘shoulder’ rates for times in between. Smart meters also provide helpful usage information to help households better manage their bills.
The new tariffs approved by the AER are in addition to existing time of use tariffs, often referred to as ‘demand’ tariffs in Victoria where off-peak pricing can be as low as 14c per kWh. However, peak prices are considerably higher, up to as much as 40c per kWh.
The retailers can also set seasonal pricing, with electricity costs going up during periods of high demand in the summer months, before coming down again in winter.
Are the new tariffs a good thing?
The AER has welcomed the new tariff options as a “key reform enabling Queensland consumers to charge their electricity consumption patterns at times of high demand”.
AER board member Jim Cox said the new tariffs, coupled with smart meter reforms commencing in December 2017, allow retailers to develop offers so consumers can choose how and when they use energy, taking advantage of peak and off-peak network pricing to have more control over their bills.
“These changes to network tariffs allow retailers to develop offers that help consumers get better value from the energy choices they make. Choices about how and when they use electricity and what new technology they buy,” Mr Cox said.
“These tariff reforms will also help promote better use of the existing poles and wires by rewarding customers for shifting their electricity consumption to off-peak periods. This will help reduce the need for future network upgrades and replacement, lowering prices for all customers in the long run,” he added.
The Queensland Government’s uniform tariff policy will continue to mean that Ergon Energy customers in rural and regional Queensland will pay the same tariffs as their South East Queensland counterparts.