Victoria’s electricity bill postcode lottery

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 energy plans across the five networks, Canstar Blue found that prices can differ by in excess of $190 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.

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Victoria’s Electricity Distribution Networks

Depending on where you live in Victoria, your home will be connected to one of five different 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 market offers of six different electricity providers operating in Victoria, based on different postcodes spanning the five distribution areas. The results show that households on the AusNet network can expect to pay an average of $1,452 per annum, while those on the Powercor network will pay an average of $1,350 per year. This is despite having the same energy plans and identical electricity usage.

On the other hand, households in central Melbourne, covered by the Citipower network, can expect the cheapest prices, with an average yearly bill of $1,268.

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 $1,315 a year, while those on the Jemena network, servicing northern and south-western suburbs, can expect yearly bills of $1,326.

The end result is that just a short distance between suburbs can make a 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 has compared prices from the big three power companies, AGL, Origin and EnergyAustralia, plus three smaller providers, Alinta Energy, Momentum Energy and Powershop. Incredibly, Powershop took out top spot in three out of the five electricity distribution zones. Keep in mind, this is just a selection of providers and there are many more to choose from.

Citipower Network

These costs are based on the Citipower network in Melbourne but prices will vary depending on your circumstances. See here for further information on the VDO, which in this comparison assumes general energy usage of 4000kWh/year, meaning that the VDO is $1,334/year. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

~Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditional discounts that may be available. Pricing based on Citipower network in Melbourne, but prices will differ between distribution areas. Accurate as of July 2019.

Jemena Network

These costs are based on the Jemena network in Sunbury but prices will vary depending on your circumstances. See here for further on the VDO, which in this comparison assumes general usage of 4000kWh/year, meaning that the VDO is $1,385/year. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

~Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditional discounts that may be available. Pricing based on Jemena network in Sunbury, but prices will differ between distribution areas. Accurate as of July 2019.

United Energy Network

These costs are based on the United Energy network in Frankston but prices will vary depending on your circumstances. See here for further on the VDO, which in this comparison assumes general usage of 4000kWh/year, meaning that the VDO is $1,381/year. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

~Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditional discounts that may be available. Pricing based on United Energy network in Frankston, but prices will differ between distribution areas. Accurate as of July 2019.

Powercor Network

These costs are based on the Powercor network in Geelong but prices will vary depending on your circumstances. See here for further on the VDO, which in this comparison assumes general usage of 4000kWh/year, meaning that the VDO is $1,411/year. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

~Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditional discounts that may be available. Pricing based on Powercor network in Geelong, but prices will differ between distribution areas. Accurate as of July 2019.

AusNet Network

These costs are based on the AusNet network in Warragul but prices will vary depending on your circumstances. See here for further on the VDO, which in this comparison assumes general usage of 4000kWh/year, meaning that the VDO is $1,520/year. Use our comparison tool for a specific comparison. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

~Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditional discounts that may be available. Pricing based on AusNet network in Warragul, but prices will differ between distribution areas. Accurate as of July 2019.

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 pricing 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 probably 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.

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