Victorian Energy Prices 2015 Final Draft Report · 2015-07-07 · 4 Tableofcontents* * * NoteregardingtheRepealofthecarbontaxbill* 2* * * TheVictorianTariff?TrackingProject

Victorian Energy Prices July 2015An Update report on the Victorian Tariff-Tracking project

May Mauseth Johnston July 2015

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Disclaimer*The$energy$offers,$tariffs$and$bill$calculations$presented$in$this$report$and$associated$workbooks$ should$be$used$as$a$general$guide$only$and$should$not$be$ relied$upon.$The$ workbooks$ are$ not$ an$ appropriate$ substitute$ for$ obtaining$ an$ offer$ from$ an$energy$retailer.$ $The$information$presented$in$this$report$and$the$workbooks$is$not$provided$as$financial$advice.$While$we$have$taken$great$care$to$ensure$accuracy$of$the$information$provided$in$this$report$and$the$workbooks,$they$are$suitable$for$use$only$as$a$research$and$advocacy$tool.$We$do$not$accept$any$legal$responsibility$for$errors$or$inaccuracies.$The$St$Vincent$de$Paul$Society$and$Alviss$Consulting$Pty$Ltd$do$not$ accept$ liability$ for$ any$ action$ taken$based$on$ the$ information$provided$ in$ this$report$or$the$associated$workbooks$or$for$any$loss,$economic$or$otherwise,$suffered$as$ a$ result$ of$ reliance$ on$ the$ information$ presented.$ If$ you$ would$ like$ to$ obtain$information$about$energy$offers$available$to$you$as$a$customer,$go$to$the$Victorian$Government’s$ website$ www.switchon.vic.gov.au or$ contact$ the$ energy$ retailers$directly.$$$Victorian*Energy*Prices*July*2015*An*update*report*on*the*Victorian*Tariff?Tracking*Project***$May*Mauseth*Johnston,*July*2015*Alviss*Consulting*Pty*Ltd**

$$*©*St*Vincent*de*Paul*Society*and*Alviss*Consulting*Pty*Ltd*This$work$is$copyright.$Apart$from$any$use$permitted$under$the$Copyright$Act$1968$(Ctw),$no$parts$may$be$adapted,$reproduced,$copied,$stored,$distributed,$published$or$put$to$commercial$use$without$prior$written$permission$from$the$St$Vincent$de$Paul$Society.$$$$Contact:*Gavin*Dufty**Manager,$Social$Policy$Unit$Victoria$St$Vincent$de$Paul$Society$$Phone:$(03)$98955816$or$0439$357$129**

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Note*regarding*the*Repeal*of*the*carbon*tax*bill**On$23$June$2014$the$Government$reintroduced$the$Clean$Energy$Legislation$(Carbon$Tax$Repeal)$Bill$2013$[No.$2]$ in$the$House$of$Representatives.$The$bill$repealed$the$six$Acts$that$established$the$carbon$pricing$mechanism.$$The$Senate$passed$the$bill$on$17$July$2014$and$retailers$were$required$to$publish$new,$carbon$exclusive,$prices$and$backdate$these$to$1$July.$$$As$ the$ methodology$ of$ the$ Vinnies’$ Victorian$ Tariff_Tracking$ project$ is$ based$ on$providing$annual$price$updates$as$of$January$and$July$every$year,$the$July$2014$tariffs$collected$were$carbon$inclusive.$$As$such,$the$main$analysis$presented$in$this$report$is$ based$ on$ July$ 2014$ prices$ (carbon$ inclusive)$ and$ July$ 2015$ prices$ (carbon$exclusive).$However,$we$have$assessed$the$ impact$of$ the$repeal$of$ the$carbon$tax,$compared$to$other$factors,$by$using$additional$sources$to$estimate$bills$prior$to$the$repeal,$after$the$repeal$and$as$of$July$2015.1$$$************************* 1 Alviss$Consulting$collected$and$analysed$carbon$exclusive$prices$as$of$October$2014$for$two$separate$projects:$Tax$on,$Tax$off:$Electricity$prices$before$and$after$the$repeal$of$the$carbon$tax,$November$2014$(electricity$prices$only)$and$Residential$electricity$and$gas$prices$from$January$2012$to$January$2015,$A$report$to$the$ACCC,$March$2015.$

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****************************The*Victorian*Tariff?Tracking*Project*To$date,$this$project$has$tracked$electricity$and$gas$tariffs$in$Victoria$from$July$2008$(retail$price$deregulation$took$effect$on$January$1$2009)$to$July$2015,$and$developed$a$ spreadsheet$ based$ tool$ that$ allows$ consumer$ advocates$ to$ build$ on$ the$ initial$analysis$and$continue$to$track$changes$as$they$occur.$$$We$have$developed$four$workbooks$that$allow$the$user$to$enter$consumption$levels$and$analyse$household$bills$for$gas$and$electricity$standing$offers$from$July$2008$to$July$2015,$as$well$as$published$electricity$and$gas$market$offers$as$of$July$2010$and$July$2015.$$Workbook$1:$Electricity$standing$offers$July$2008_$July$2015$Workbook$2:$Gas$standing$offers$July$2008_$July$2015$Workbook$3:$Electricity$market$offers$July$2010$to$July$2015$Workbook$4:$Gas$market$offers$July$2010$to$July$2015$$The$ four$ workbooks$ can$ be$ accessed$ at$ the$ St$ Vincent$ de$ Paul$ Society$ Victoria’s$website:$www.vinnies.org.au/energy$*

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Table*of*contents** *Note*regarding*the*Repeal*of*the*carbon*tax*bill* 2** *The*Victorian*Tariff?Tracking*Project* 3** *Key*findings* 5** *1.*Changes*to*the*standing*offers** 7*

1.1*Electricity*standing*offers*July*2014*?*July*2015* 7*1.1.1$AGL’s$electricity$standing$offers$ 7$1.1.2$Origin’s$electricity$standing$offers* 8$1.1.3$Energy$Australia’s$electricity$standing$offers* 8$1.2*Gas*standing*offers*July*2014*?*July*2015* 9*1.2.1$AGL’s$gas$standing$offers$ 9$1.2.2$Origin’s$gas$standing$offers* 10$1.2.3$Energy$Australia’s$gas$standing$offers* 11$

* $2.*Market*offers* 12*

2.1*Electricity*market*offers*July*2015* 13*2.1.1$Potential$savings$_$Differences$between$electricity$offers* 15$2.2*Gas*market*offers*July*2015* 26*2.2.1$Potential$savings$_$Differences$between$gas$offers* 28$2.3*Dual*fuel*offers*July*2015* 36*

* *3.*Retail*market*developments* 38*

3.1$Discounting$ 38$3.2$Solar$PV$offers$ 42$3.3$Demand$tariffs$ 43$

* *4.*Electricity*network*charges*and*bill?stack*trends* 47** *5.*Total*cost*of*energy*by*area* 48*

5.1*Inner*city,*inner*North*and*Eastern*suburbs* 51*5.2*Inner*West,*outer*North*and*North*Western*suburbs* 52*5.3*South*Eastern*suburbs*and*Mornington*Peninsula* 53*5.4*Outer*Western*suburbs*and*Western*Victoria* 54*5.5*Outer*North*Eastern*suburbs*and*Eastern*Victoria* 56*

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Key*findings***

• The$retailers$are$offering$significant$discounts$on$their$market$offer$rates.$For$electricity$it$is$now$common$to$see$offers$with$30%$off$usage$rates$if$bills$are$paid$on$time.$For$gas,$the$typical$discount$is$between$15_20%.$$

• As$most$retailers$prefer$to$discount$their$rates$instead$of$reducing$their$base$rates,$ standing$ offer$ prices$ have$ not$ reduced$ like$ market$ offers$ (post$discounts)$have.$Electricity$standing$offer$prices$are$only$2.7%$less$than$they$were$this$time$last$year$(prior$to$the$repeal$of$the$carbon$tax)$while$market$offer$ prices$ (including$ discounts)$ are$ down$ 7%.$ In$ relation$ to$ gas,$ standing$offer$prices$are$now$the$same$as$they$were$last$year$while$market$offers$are$down$by$4.8%.$

$• Only$a$few$retailers$have$gazetted$new$standing$offers$since$January$and$we$

continue$ to$ express$ our$ concern$ about$ the$ standing$ offer$ arrangements.$Retailers$do$not$have$an$incentive$to$gazette$new$offers$in$an$environment$of$falling$energy$prices.$Approximately$25%$of$Victorians$are$still$standing$offer$customers$ and$ after$ 14$ years$ with$ retail$ competition$ and$ 6$ years$ of$deregulated$prices,$these$customers$should$be$regarded$as$‘sticky’.2$Again$we$call$ for$ the$ Victorian$ Government$ to$ introduce$ new$ standing$ offer$arrangements$ that$ can$ promote$ competition$ by$ ensuring$ that$ retailers$compete$on$price$in$a$transparent$matter.$See$section$3.1.$

$• Energy$Australia$currently$offers$the$greatest$pay$on$time$discount:$35%$on$

energy$ consumption$ costs,$which,$ on$ average,$ equates$ to$ $420$per$ annum$for$a$household$with$typical$electricity$consumption$(4,800kWh).$$

$• Households$with$typical$electricity$consumption$can$save$up$to$$600$_$$800$

per$ annum$ (depending$ on$ their$ network$ area)$ if$ switching$ from$ the$worst$standing$offer$to$the$best$market$offer.3$See$section$2.1.$

$• The$ difference$ between$ the$ best$ and$ the$ worst$ market$ offers$ is$ $530$ per$

annum$in$all$network$areas$except$Citipower,$where$the$difference$is$$450.4$See$section$2.1.$

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2$In$Victoria$75%$of$electricity$(and$a$similar$number$of$gas$customers)$are$on$market$contracts.$See$AER,$State$of$the$energy$market,$2014,$128.$However,$it$should$be$noted$that$an$Essectial$Services$Commission$(ESC)$report$has$stated$that$data$supplied$by$retailers$show$that$11%$of$residential$electricity$customers$and$13%$of$residential$gas$customers$were$on$market$offers$as$of$2014.$See$ESC,$Energy$Retailers$Comparative$performance$report$–$Customer$Service$2013_2014$(December$2014).$We$do$not$currently$use$these$figueres$as$the$ESC$report$also$$states:$“This$figure$is$considerably$lower$than$estimated$reports$elsewhere.$As$this$is$the$first$year$we$have$collected$this$data,$the$Commission$will$undertake$further$work$to$confirm$the$accuracy$of$this$finding”$(page$5).$$3$Based$on$the$worst$of$the$retailers’$standing$offer$(single$rate)$and$the$best$of$the$published$market$offers$(including$additional$discounts$and/or$pay$on$time$discounts).$4$Households$using$4800kWh$per$annum$(single$rate)$and$all$market$offer$bills$include$additional$discounts$and/or$pay$on$time$discounts.$$$

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• Energy$Australia’s$market$offers$produce$ the$ lowest$ annual$bill$ for$ average$consumption$ households$ in$ Powercor$ and$ United$ Energy’s$ network$ area;$Simply$ Energy’s$ offer$ produces$ the$ lowest$ bills$ in$ Citipower$ and$ Jemena’s$areas;$and$Dodo’s$offer$produces$the$lowest$bill$in$SP$Ausnet’s$area.$QEnergy,$on$the$other$hand,$has$the$most$expensive$market$offer$in$all$network$areas.5$See$section$2.1.1.$

$• Gas$ customers$with$ typical$ consumption$ (63,000Mj)$ can$ save$ up$ to$ $370$ _$

$500$per$annum$ (depending$on$ their$ gas$ zone)$ if$ switching$ from$ the$worst$standing$offer$to$the$best$market$offer.6$See$section$2.2.$

$• The$price_spread$for$gas$market$offers$ranges$from$$140$per$annum$(Origin$

South$East$gas$zone)$to$$250$(Tru$East$gas$zone)$ for$customers$with$typical$consumption$levels.7$See$section$2.2.$

$• Of$the$retailers$that$offer$gas$as$a$stand_alone$product$(e.g.$not$bundled$with$

electricity),$Origin’s$market$offer$produces$the$lowest$annual$bill$ in$four$out$of$eight$gas$zones;$AGL$in$three$zones;$and$Energy$Australia$in$one$zone.$See$section$2.2.2.$

$• Households$with$solar$panels$installed$do$not$get$access$to$many$of$the$high$

discount$offers$available$to$non_solar$customers.$While$retailers$are$required$to$offer$solar$customers$supply$and$a$minimum$feed$in$Tariff$(FIT)$rate$of$6.2$c/kWh,$ some$ retailers$ only$ offer$ solar$ customers$ standing$ offer$ rates.$ On$average,$ a$ standing$ offer$ bill$ is$ now$ 25%$ higher$ than$ a$ market$ offer$ bill$(including$discounts).$See$section$3.2.$$$$

$• Dual$ fuel$ households$ in$ Kilmore,$ Seymour,$ Violet$ Town,$ Nagambie,$

Wangaratta,$Chiltern$and$Wodonga$(SP$Ausnet$electricity$network$and$Origin$North$ gas$ zone)$ continue$ to$ face$ the$ highest$ energy$ costs$ in$ the$ state$(approximately$$2,800$per$annum).8$See$section$5.$$

• Dual$ fuel$ households$ in$ the$ inner$ city$ bay$ side$ suburbs$ of$ St$ Kilda,$ Port$Melbourne,$Albert$Park$and$South$Melbourne$(Citipower$electricity$network$and$AGL$South$gas$ zone)$have$ the$ lowest$energy$costs$ in$ the$state$ ($2,390$per$annum).9$See$section$5.$$

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5$Households$using$4800kWh$per$annum$(single$rate)$and$all$market$offer$bills$include$additional$discounts$and/or$pay$on$time$discounts. 6$Based$on$the$worst$of$the$retailers’$standing$offer$and$the$best$of$the$published$market$offers$(including$dual$fuel$offers,$additional$discounts$and/or$pay$on$time$discounts).$7$Households$using$63,000Mj$per$annum.$All$published$market$offers$(including$dual$fuel$offers,$additional$discounts$and/or$pay$on$time$discounts).$$8$Bill$calculations$based$on$average$electricity$(4,800kWh)$and$gas$(63,000Mj)$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included. 9$Ibid.

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1.*Changes*to*the*standing*offers**None$of$the$incumbent$retailers$have$gazetted$new$electricity$or$gas$market$offers$since$ January$ 2015.10$ $ However,$ most$ of$ the$ Victorian$ retailers$ gazetted$ new$standing$offers$that$took$effect$earlier$this$year.$$$1.1*Electricity*standing*offers*July*2014*–*July*2015*$Charts$1$_$3$below$show$the$incumbent$retailers’$electricity$standing$offer$as$of$July$2014$ (carbon$ inclusive),$ October$ 2014$ (carbon$ exclusive),$ January$ and$ July$ 2015.$They$show$that$households$experienced$a$price$decrease$due$to$the$carbon$repeal$but$that$prices$increased$significantly$in$January$2015$and$have$remained$uncharged$since$ then.$ On$ average,$ electricity$ standing$ offer$ prices$ are$ now$ 2.7%$ lower$ than$they$were$in$July$last$year$(prior$to$the$repeal$of$the$carbon$tax).$$$1.1.1*AGL’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$AGL’s$standing$offer$is$now$typically:$$

• $60$(or$4%)$less$for$average$consumption$households$in$Citipower’s$area$• $50$(or$3%)$less$for$average$consumption$households$in$Powercor’s$area$• $45$(or$2%)$less$for$average$consumption$households$in$SP$Ausnet’s$area$• $95$(or$5%)$less$for$average$consumption$households$in$Jemena’s$area$• $105$(or$6%)$less$for$average$consumption$households$in$United$Energy’s$

area$$Chart*1*Changes$to$AGL’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$on$single$rate$tariff$and$annual$consumption$of$4800kWh$

$$

10$Note$that$Origin$has$gazetted$flexible$(TOU)$tariffs$and$AGL$has$gazetted$a$demand$tariff$for$the$United$Energy$network$in$June$2015.$$

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1.1.2*Origin’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$Origin’s$standing$offer$is$now$typically:$$

• $20$(or$1%)$less$for$average$consumption$households$in$Citipower’s$area$• the$same$for$average$consumption$households$in$Powercor$and$SP$Ausnets’$

areas$• $60$(or$3%)$less$for$average$consumption$households$in$Jemena’s$area$• $75$(or$4%)$less$for$average$consumption$households$in$United$Energy’s$area$

*Chart*2*Changes$to$Origin’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$on$single$rate$tariff$and$annual$consumption$of$4800kWh$

$$1.1.3*Energy*Australia’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$Energy$Australia’s$standing$offer$is$now$typically:$$

• $10$(or$1%)$less$for$average$consumption$households$in$Citipower’s$area$• $20$(or$1%)$less$for$average$consumption$households$in$Powercor’s$area$• $10$(or$1%)$less$for$average$consumption$households$in$SP$Ausnet’s$area$• $35$(or$2%)$less$for$average$consumption$households$in$Jemena’s$area$• $65$(or$4%)$less$for$average$consumption$households$in$United$Energy’s$area$

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Chart*3*Changes$to$Energy$Australia’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$on$single$rate$tariff$and$annual$consumption$of$4800kWh$

$$$1.2*Gas*standing*offers*July*2014*–*July*2015**Charts$4$_$6$below$show$the$incumbent$retailers’$gas$standing$offer$as$of$July$2014$(carbon$ inclusive),$ October$ 2014$ (carbon$ exclusive),$ January$ and$ July$ 2015.$ They$show$ that$ households$ experienced$ a$ price$ decrease$ due$ to$ the$ carbon$ repeal$ but$that$ prices$ increased$ significantly$ in$ January$ 2015$ and$ have$ remained$ uncharged$since$ then.$ $ For$most$ average$ consumption$ customers$on$a$ gas$ standing$offer$ the$annual$ bill$ is$ now$ similar$ to$what$ it$was$prior$ to$ the$ repeal$ of$ the$ carbon$ tax.$On$average,$gas$standing$offers$have$reduced$by$less$than$1%$since$July$2014$(prior$to$the$repeal$of$the$carbon$tax).$$*1.2.1*AGL’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$AGL’s$standing$offer$is$now$typically:$$

• $25$(or$2%)$less$for$average$consumption$households$in$the$Origin$North$price$zone$

• $30$(or$2%)$less$for$average$consumption$households$in$the$Tru$West$price$zone$

• the$same$(or$up$to$1%$less)$for$average$consumption$households$in$the$other$price$zones$

$******

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Chart*4*Changes$to$AGL’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$an$annual$consumption$of$63,000Mj$

$

$*1.2.2*Origin’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$Origin’s$standing$offer$is$now$typically:$$

• $35$(or$3%)$less$for$average$consumption$households$in$the$Origin$Metro$price$zone$

• $30$(or$2%)$less$for$average$consumption$households$in$the$AGL$West$price$zone$

• $55$(or$4%)$less$for$average$consumption$households$in$the$Tru$West$price$zone$

• $35$(or$3%)$less$for$average$consumption$households$in$the$Tru$Central$price$zone$


$****************

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Chart*5*Changes$to$Origin’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$an$annual$consumption$of$63,000Mj$

$*1.2.3*Energy*Australia’s*electricity*standing*offers*

$Compared$ to$ the$ carbon$ inclusive$ rates$ of$ July$ 2014,$ the$ annual$ electricity$ bill$ for$households$on$Energy$Australia’s$standing$offer$is$now$typically:$$

• $40$(or$3%)$less$for$average$consumption$households$in$the$AGL$North$price$zone$


$Chart*6*Changes$to$Energy$Australia’s$standing$offers$(as$annual$bills,$inc$GST)$from$July$2014$to$July$2015$_$Calculations$based$an$annual$consumption$of$63,000Mj$

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2.*Market*offers**$While$ only$ a$ few$ retailers$ have$ gazetted$ new$ standing$ offer$ prices$ since$ January,$many$ have$ amended$ their$market$ offers.$ The$ size$ of$ the$ discounts$ offered$ is$ at$ a$record$ high$with$ 30%$ becoming$ the$ new$ benchmark$ for$ electricity$ offers$ and$ gas$offers$typically$attracting$discounts$of$15_20%.$Retailers$that$do$not$offer$discounts$have$typically$adjusted$their$market$offer$rates$instead.$$A$welcoming$market$ development$ is$ that$more$ retailers$ have$ decided$ to$ offer$ no$term$ contracts$ that$ do$ not$ attract$ early$ termination,$ or$ exit,$ fees.$ No$ lock_in$contracts$ become$ increasingly$ important$ in$ an$ environment$with$ falling$ electricity$prices$that$requires$customers$to$switch$regularly$if$they$want$a$better$deal.$$$$Section$1$above$shows$that$the$incumbent$retailers’$standing$offers$decreased$post$the$ repeal$of$ the$ carbon$ tax,$ increased$ (almost$back$ to$pre_carbon$price$ levels)$ in$January$2015$and$have$remained$the$same$since.$Average$market$offers,$however,$decreased$post$the$repeal,$increased$in$January$2015$but$have$since$then$decreased$again$(see$charts$7$and$8$below).$This$decrease$ is$due$to$the$higher$discounts$that$retailers$currently$offer.$$Chart*7$Average$electricity$market$offer$post$July$2015$for$each$of$the$five$network$areas.$Bill$calculations$include$discounts,$pay$on$time$discounts$and$GST$_$Households$consuming$4,800kWh$per$annum$(single$rate)$*

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$$$$*********

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Chart*8$Average$gas$market$offer$(single$fuel$offers$only)$post$July$2015$for$each$of$the$five$metropolitan$gas$zones.$Bill$calculations$include$discounts,$pay$on$time$discounts$and$GST$_$Households$consuming$63,000Mj$per$annum$$*

***2.1*Electricity*market*offers*July*201511**$

• Electricity$market$offers$(including$discounts$and$pay$on$time$discounts)$are$on$average$7%$lower$compared$to$one$year$ago.12$$$

• Typical$consumption$households$(4800kWh)$can$save$$600$_$$800$per$annum$(depending$on$their$network$area)$if$switching$from$the$worst$standing$offer$to$the$best$market$offer.13$$

• The$greatest$potential$ saving$ is$ in$SP$Ausnet’s$network$area$ (approximately$$830).14$

$• The$ difference$ between$ the$ best$ and$ the$ worst$ market$ offers$ is$

approximately$$530$for$customers$with$typical$consumption$levels$across$all$network$areas.15$The$difference$(the$price_spread)$is$broadly$consistent$with$those$reported$in$July$last$year$and$January$2015.16$$

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11$The$market$offers$were$collected$on$1$of$July$2015$and$it$should$be$noted$that$retailers$may$change$their$rates$at$any$time.$12$Prior$to$the$repeal$of$the$carbon$tax.$13$Based$on$the$worst$of$the$retailers’$standing$offer$(single$rate)$and$the$best$of$the$published$market$offers$(including$additional$discounts$and/or$pay$on$time$discounts).$14$Ibid.$15$Households$using$4800kWh$per$annum$(single$rate)$and$all$market$offer$bills$include$additional$discounts$and/or$pay$on$time$discounts.$$$16$See$St$Vincent$de$Paul$Society,$Victorian$Energy$Prices$July$2014,$An$update$report$on$the$Victorian$TariffDTracking$Project$by$May$Mauseth$Johnston$(July$2014).$$St$Vincent$de$Paul$Society,$Victorian$Energy$Prices$January$2015,$An$update$report$on$the$Victorian$TariffDTracking$Project$by$May$Mauseth$Johnston$(January$2015).$$$

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14

• The$ big$ price_spread$ is$ skewed$ by$ the$ single$ worst$ retail$ offer$ in$ each$network$area$(QEnergy’s$offers).$ If$we$exclude$these$outliers,$the$difference$between$the$best$and$the$worst$market$offer$ranges$from$$230$per$annum$(in$Powercor’s$area)$to$$270$(in$United$Energy’s$area).17$Chart$9$below$shows$the$retail$market$offer$price_spread$within$each$of$the$five$network$areas.$$

$Chart*9$Price_spread$for$sixteen$electricity$market$offers$in$each$network$area$post$July$2015$(incl$GST),$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$*

$$Table$ 1$ below$ shows$ additional$ discounts$ applicable$ to$ the$ electricity$ retailers’$published$market$offer$rates.$$Some$of$the$retailers$have$multiple$market$offers$and$may$ offer$ higher$ (or$ lower)$ discounts$ than$ those$ listed$ here.$ However,$ if$ the$discount$is$higher$the$length$of$the$contract$term$is$typically$longer.$In$other$cases,$the$discount$might$be$higher$but$the$customer$must$agree$to$pay$by$direct$debit.18$$$$$$$$$$$$$$

17$Households$using$4800kWh$per$annum$(single$rate)$and$all$market$offer$bills$include$additional$discounts$and/or$pay$on$time$discounts.$$$18$Momentum,$for$example,$has$introduced$a$direct$debit$discount$where$customers$receive$a$2%$discount$off$the$market$offer$electricity$rates$(their$Smile$Power$product).$$This$discount$is$not$included$in$the$bill$calculations$presented$in$this$report.$$

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$"per"annum"

Retail"offers"

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15

Table*1*Electricity$market$offer$features$post$July$201519$$Retailer$ Guaranteed$

discounts$Fixed$term/$Benefit$period$

Early$Termination$Fee$

Pay$on$time$discounts$

Other$(bonuses,$incentives)$

AGL$ No$ 1$year$ No$ 26%$off$usage$ Yes$Origin$ No$ 1$year$ No$ 28%$off$usage$ No$Energy$Australia$$ No$ 1$year$ No$ 35%$off$usage$ No$Powershop$ No$ No$ No$ 12%$off$bill^$ No$Click$ No$ No$ No$ 15%$off$bill$ No$Powerdirect$ No$ 2$years$ $20$ 30%$off$usage$ No$Red$ No$ 2$years$ $20$ 10%$off$bill$ Yes$Simply$ 27%$off$bill$ 2$years$ $22$ No$ Yes$Lumo$ No$ 2$years$ $80$ 20%$off$bill$ Yes$QEnergy$ No$ 1$year$ $20$ No$ No$Momentum$ No$ 1$year$ $20$ No$ No$Dodo$ No$ No$ No$ 30%$off$usage$ No$Alinta$ No$ 2$years$ No$ 30%$off$usage$ No$People$Energy$ No$ 2$years$ $22$ 30%$off$usage$ No$Covau$ No$ 1$year$ $22^^$ 24%$off$usage$ Yes$Sumo$ No$ 2$years$ No$ 27%$off$usage$ No$Diamond$ No$ 1$year$ $22$ 3%$off$usage$ No$Online$ No$ 2$years$ No$ 30%$off$usage$ No$Commander$ No$ No$ No$ 30%$off$usage$ No$

$^$Powershop’s$discount$is$conditional$upon$the$customer$regularly$purchasing$their$Online$Saver$product.$$^^$Covau’s$price$and$product$information$statement$does$not$stipulate$the$amount$charged$for$early$termination$$

$2.1.1*Potential*savings*?*Differences*between*electricity*offers**

$Typical$consumption$households$(4,800kWh$per$annum)$on$the$worst$standing$offer$can$ save$ $600$ _$ $800$ per$ annum$ if$ switching$ to$ the$ best$ published$market$ offer$(depending$ on$ their$ network$ area).20$ Importantly,$ it$ is$ the$ difference$ between$individual$ retailers’$ offers$ that$ creates$ the$ possibility$ of$ significant$ savings$ if$switching$ from$ a$ standing$ offer$ to$ a$market$ offer.$ Customers$who$ choose$ to$ stay$with$the$same$retailer$but$change$to$a$market$offer$are$unlikely$to$experience$annual$savings$ as$ large$ as$ these.$ Furthermore,$ we$ stress$ that$ the$ vast$ majority$ of$ these$discounts$are$conditional$on$bills$being$paid$on$time$and$households$with$cash_flow$issues$may$ thus$ find$ themselves$ unable$ to$ achieve$ the$ annual$ bills$ estimated$ for$some$of$the$best$offers$included$in$the$charts$below.$$Charts$10$_$14$below$show$annual$retail$bills$for$typical$consumption$(4,800kWh$per$annum,$single$rate)$for$each$of$the$five$network$areas.$The$blue$columns$to$the$left$represent$ the$ standing$ offer$ bill,$ the$ red$ columns$ are$ the$market$ offers$ including$guaranteed$discounts$(but$not$pay$on$time$discounts)$while$the$green$columns$are$market$offer$bills$including$pay$on$time$discounts.21$

19$These$market$offers$are$features$have$been$published$on$the$retailers’$websites$on$the$1st$of$July$2015.$20$Based$on$market$offer$bills$that$include$discounts$and$pay$on$time$discounts.$21$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$table$1.$

16

Citipower*

In$ Citipower’s$ area,$ average$ consumption$ households$ on$ the$worst$ standing$ offer$can$save$approximately$$610$per$annum$ if$ switching$ to$ the$best$published$market$offer.$$Simply$Energy$is$the$retailer$that$currently$offers$the$best$market$offer$rates$in$this$area.**Chart*10$Citipower’s$network$area:$Estimated$annual$bills$(incl$GST)$for$electricity$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$*

$$The$ difference$ between$ the$ best$ and$ the$ worst$ market$ offers$ is$ also$ significant.$Simply$ Energy’s$offer$ is$ approximately$$450$ less$ than$QEnergy’s$market$offer$post$discounts$ for$ households$ with$ this$ consumption$ level.$ Figure$ 1$ below$ shows$estimated$annual$bills$ for$market$offers$post$discounts$ in$Citipower’s$network$area$as$well$their$current$ranking$compared$to$their$offers$six$months$ago$(brackets).$$$$$$$$$$$********

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Retail"offers"in"Citipower's"area"

Standing% Market%(ex%POT)% Market%(inc%POT)%

17

Figure*1$Citipower’s$network$area:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$22$

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22$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$1st$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$Additional$discounts$for$customers$choosing$to$pay$by$direct$debit$are$not$included$in$these$bill$calculations.$As$Powershop’s$rates$vary$from$month$to$month,$the$rates$used$to$calculate$the$Powershop$bill$is$an$annual$average$and$we$have$assumed$flat$consumption$throughout$the$year.$$

Simply$Energy$ $$$$$$$$$$$$1,083$$$$$$$$$$$$$$$$$$1$$$$(_)$

Powershop$ $$$$$$$$$$$$,1094$$$$$$$$$$$$$$$$$$2$$$$(2)$

Dodo$ $ $$$$$$$$$$$$1,147$$$$$$$$$$$$$$$$$$3$$$$(7)$

Red$Energy$ $$$$$$$$$$$$$1,157$$$$$$$$$$$$$$$$$$4$$$$(4)$

Energy$Australia$$$$$$$$$$$$$1,161$$$$$$$$$$$$$$$$$$5$$$(12)$

Lumo$Energy$ $$$$$$$$$$$$1,166$$$$$$$$$$$$$$$$$$6$$$(10)%%Momentum$ $$$$$$$$$$$$$1,196$$$$$$$$$$$$$$$$$$7$$$$(5)$

Diamond$$$$$$$$$$$$$$$$$$$$$$$$$$1,203$$$$$$$$$$$$$$$$$$8$$$$$(_)$

Origin$Energy$ $$$$$$$$$$$$1,212$$$$$$$$$$$$$$$$$$$9$$$$(3)$

Alinta$ $ $$$$$$$$$$$$1,225$$$$$$$$$$$$$$$$$10$$$$(9)$

Powerdirect$ $$$$$$$$$$$$1,229$$$$$$$$$$$$$$$$$11$$$$(6)$

Sumo$Power$$$$$$$$$$$$$$$$$$$1,253$$$$$$$$$$$$$$$$$$12$$$$(_)$

Online$Power$&$Gas$$$$$$1,255$$$$$$$$$$$$$$$$$$13$$$$(_)$

AGL$ $ $$$$$$$$$$$$1,276$$$$$$$$$$$$$$$$$$14$$$$(8)$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$1,281$$$$$$$$$$$$$$$$$$15$$$$(_)$

Commander$$$$$$$$$$$$$$$$$$$$1,283$$$$$$$$$$$$$$$$$$16$$$$(_)$

People$Energy$ $$$$$$$$$$$$1,302$$$$$$$$$$$$$$$$$$17$$$$(2)$

Click$Energy$ $$$$$$$$$$$$1,321$$$$$$$$$$$$$$$$$$18$$$(11)$$$$$

QEnergy$ $$$$$$$$$$$$1,528$$$$$$$$$$$$$$$$$$19$$$(13)$

18

Powercor*

In$Powercor’s$network$area,$average$consumption$households$on$the$worst$standing$offer$ can$ save$ approximately$ $630$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$ $Energy$Australia$ is$ the$ retailer$ that$currently$offers$ the$best$market$offer$rates$in$this$area.*$Chart*11$Powercor’s$network$area:$Estimated$annual$bills$(incl$GST)$for$electricity$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$**

$$$The$ difference$ between$ the$ best$ and$ the$worst$market$ offers$ is$ less$ than$ that$ of$Citipower’s$ network$ area.$ Energy$ Australia’s$ offer$ is$ approximately$ $530$ less$ than$QEnergy’s$market$offer$post$discounts$ for$households$with$ this$consumption$ level.$Figure$ 2$ below$ shows$ estimated$ annual$ bills$ for$ market$ offers$ post$ discounts$ in$Powercor’s$network$area$as$well$ their$current$ ranking$compared$to$ their$offers$six$months$ago$(brackets).$***************

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Retail"offers"in"Powercor's"area"


19

Figure*2$Powercor’s$network$area:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$23$$

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23$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$1st$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$Additional$discounts$for$customers$choosing$to$pay$by$direct$debit$are$not$included$in$these$bill$calculations.$As$Powershop’s$rates$vary$from$month$to$month,$the$rates$used$to$calculate$the$Powershop$bill$is$an$annual$average$and$we$have$assumed$flat$consumption$throughout$the$year.$$

Energy$Australia$$$$$$$$$$$$$1,329$$$$$$$$$$$$$$$$$1$$$$(12)$

Red$Energy$ $$$$$$$$$$$$$1,361$$$$$$$$$$$$$$$$$2$$$$(5)$

Simply$Energy$ $$$$$$$$$$$$1,339$$$$$$$$$$$$$$$$$3$$$$(_)$

Powershop$ $$$$$$$$$$$$1,379$$$$$$$$$$$$$$$$$4$$$$(1)$

Lumo$Energy$ $$$$$$$$$$$$1,386$$$$$$$$$$$$$$$$$5$$$$(9)%%Dodo$ $ $$$$$$$$$$$$1,392$$$$$$$$$$$$$$$$$6$$$(12)$

Momentum$ $$$$$$$$$$$$1,399$$$$$$$$$$$$$$$$$$7$$$$(4)$

Alinta$ $ $$$$$$$$$$$$1,401$$$$$$$$$$$$$$$$$8$$$$(7)$

Powerdirect$ $$$$$$$$$$$$1,410$$$$$$$$$$$$$$$$$$9$$$(3)$

Online$Power$&$Gas$$$$$$1,429$$$$$$$$$$$$$$$$$10$$$(_)$

Diamond$$$$$$$$$$$$$$$$$$$$$$$$$$1,437$$$$$$$$$$$$$$$$$11$$$(_)$

Origin$Energy$ $$$$$$$$$$$$1,464$$$$$$$$$$$$$$$$$12$$$(8)$

AGL$ $ $$$$$$$$$$$$1,465$$$$$$$$$$$$$$$$$13$$$(6)$

Sumo$Power$$$$$$$$$$$$$$$$$$$1,465$$$$$$$$$$$$$$$$$14$$$$(_)$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$1,479$$$$$$$$$$$$$$$$$15$$$$(_)$

People$Energy$ $$$$$$$$$$$$1,510$$$$$$$$$$$$$$$$$16$$$$(2)$

Click$Energy$ $$$$$$$$$$$$1,536$$$$$$$$$$$$$$$$$17$$(11)$$$$$

Commander$$$$$$$$$$$$$$$$$$$$1,555$$$$$$$$$$$$$$$$$18$$$(_)$

QEnergy$ $$$$$$$$$$$$1,857$$$$$$$$$$$$$$$$$19$$$(13)$

20

SP*Ausnet*

In$ SP$ Ausnet’s$ network$ area,$ average$ consumption$ households$ on$ the$ worst$standing$ offer$ can$ save$ approximately$ $830$ per$ annum$ if$ switching$ to$ the$ best$published$market$offer.$$Dodo$is$the$retailer$with$the$best$market$offer$rates$in$this$network$area.$$Chart*12$SP$Ausnet’s$network$area:$Estimated$annual$bills$(incl$GST)$for$electricity$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$**

$$As$ in$other$network$areas,$ the$difference$between$ the$best$and$ the$worst$market$offers$ is$ significant.$ Dodo’s$ offer$ is$ approximately$ $530$ less$ per$ annum$ than$QEnergy’s$market$offer$post$discounts$ for$households$with$ this$consumption$ level.$Figure$3$below$shows$estimated$annual$bills$ for$market$offers$post$discounts$ in$Sp$Ausnet’s$ network$ area$ as$ well$ their$ current$ ranking$ compared$ to$ their$ offers$ six$months$ago$(brackets).$*

$$$$$$$$$$$$*

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Retail"offers"in"SP"Ausnet's"area"


21

Figure*3$SP$Ausnet’s$network$area:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)24$$

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24$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$1st$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$Additional$discounts$for$customers$choosing$to$pay$by$direct$debit$are$not$included$in$these$bill$calculations.$As$Powershop’s$rates$vary$from$month$to$month,$the$rates$used$to$calculate$the$Powershop$bill$is$an$annual$average$and$we$have$assumed$flat$consumption$throughout$the$year.$

Dodo$ $ $$$$$$$$$$$$1,413$$$$$$$$$$$$$$$$$$1$$$$(5)$

Energy$Australia$$$$$$$$$$$$$1,435$$$$$$$$$$$$$$$$$$2$$$(11)$

Red$Energy$ $$$$$$$$$$$$$1,454$$$$$$$$$$$$$$$$$$3$$$$(2)$

Simply$Energy$ $$$$$$$$$$$$1,490$$$$$$$$$$$$$$$$$$$4$$$$(_)$

Lumo$Energy$ $$$$$$$$$$$$1,494$$$$$$$$$$$$$$$$$$$5$$$$(8)%%Powerdirect$ $$$$$$$$$$$$1,535$$$$$$$$$$$$$$$$$$$6$$$$(4)$

Origin$Energy$ $$$$$$$$$$$$1,547$$$$$$$$$$$$$$$$$$$7$$$$(3)$

Alinta$ $ $$$$$$$$$$$$1,552$$$$$$$$$$$$$$$$$$$8$$$(12)$

Sumo$Power$$$$$$$$$$$$$$$$$$$1,559$$$$$$$$$$$$$$$$$$$$9$$$$(_)$

Online$Power$&$Gas$$$$$$1,584$$$$$$$$$$$$$$$$$$$10$$$(_)$

Diamond$$$$$$$$$$$$$$$$$$$$$$$$$1,581$$$$$$$$$$$$$$$$$$$$11$$$(_)$

Commander$$$$$$$$$$$$$$$$$$$1,584$$$$$$$$$$$$$$$$$$$$12$$$(_)$

AGL$ $ $$$$$$$$$$$$1,591$$$$$$$$$$$$$$$$$$$$13$$(6)$

Powershop$ $$$$$$$$$$$$1,617$$$$$$$$$$$$$$$$$$$$14$$(7)$

Momentum$ $$$$$$$$$$$$$1,630$$$$$$$$$$$$$$$$$$$$15$$(12)$

Click$Energy$ $$$$$$$$$$$$1,641$$$$$$$$$$$$$$$$$$$$$16$(10)$$$$$

People$Energy$ $$$$$$$$$$$$1,650$$$$$$$$$$$$$$$$$$$$$17$$$(1)$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$1,656$$$$$$$$$$$$$$$$$$$$$18$$$$(_)$

QEnergy$ $$$$$$$$$$$$1,942$$$$$$$$$$$$$$$$$$$$$19$$(13)$

22

Jemena*

In$Jemena’s$network$area,$average$consumption$households$on$the$worst$standing$offer$ can$ save$ approximately$ $610$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$ $Simply$Energy$ is$ the$retailer$with$ the$best$market$offer$ rates$ in$ this$network$area.$$Chart*13$Jemena’s$network$area:$Estimated$annual$bills$(incl$GST)$for$electricity$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)*

*$$$The$difference$between$ the$best$ and$ the$worst$market$ offers$ is$ $600$per$ annum.$Simply$ Energy$ has$ the$ best$ value$market$ offer$ rates$ and,$ again,$ QEnergy$ has$ the$worst.$Figure$4$below$shows$estimated$annual$bills$for$market$offers$post$discounts$in$Jemena’s$network$area$as$well$their$current$ranking$compared$to$their$offers$six$months$ago$(brackets).$*

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900%1,000%1,100%1,200%1,300%1,400%1,500%1,600%1,700%1,800%1,900%2,000%2,100%

Retail"offers"in"Jemenea's"area"


23

Figure*4$Jemena’s$network$area:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)25*$

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Simply$Energy$ $$$$$$$$$$$$1,291$$$$$$$$$$$$$$$$$$1$$$$(_)$

Powershop$ $$$$$$$$$$$$1,299$$$$$$$$$$$$$$$$$$2$$$$(1)$

Energy$Australia$$$$$$$$$$$$$1,309$$$$$$$$$$$$$$$$$$3$$$$(9)$

Red$Energy$ $$$$$$$$$$$$$1,350$$$$$$$$$$$$$$$$$$4$$$$(3)$

Momentum$ $$$$$$$$$$$$$1,385$$$$$$$$$$$$$$$$$$5$$$$(4)$

Lumo$Energy$ $$$$$$$$$$$$1,386$$$$$$$$$$$$$$$$$$6$$$(10)%%Dodo$ $ $$$$$$$$$$$$1,387$$$$$$$$$$$$$$$$$$7$$$(12)$

Diamond$$$$$$$$$$$$$$$$$$$$$$$$$$1,408$$$$$$$$$$$$$$$$$$8$$$$(_)$

Sumo$Power$$$$$$$$$$$$$$$$$$$$1,429$$$$$$$$$$$$$$$$$$9$$$$(_)$

Online$Power$&$Gas$$$$$$$1,431$$$$$$$$$$$$$$$$$10$$$(_)$

Powerdirect$ $$$$$$$$$$$$$1,431$$$$$$$$$$$$$$$$$11$$$(6)$

Origin$Energy$ $$$$$$$$$$$$$1,432$$$$$$$$$$$$$$$$$12$$$(5)$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$1,447$$$$$$$$$$$$$$$$$13$$$(_)$

Alinta$ $ $$$$$$$$$$$$$1,458$$$$$$$$$$$$$$$$$14$$(11)$

People$Energy$ $$$$$$$$$$$$$1,469$$$$$$$$$$$$$$$$$15$$$$(2)$

AGL$ $ $$$$$$$$$$$$$1,484$$$$$$$$$$$$$$$$$16$$$$(7)$

Click$Energy$ $$$$$$$$$$$$$1,509$$$$$$$$$$$$$$$$$17$$$$(8)$$$$$

Commander$$$$$$$$$$$$$$$$$$$$$1,553$$$$$$$$$$$$$$$$18$$$$$(_)$

QEnergy$ $$$$$$$$$$$$$1,812$$$$$$$$$$$$$$$$19$$$$(13)$

24

United*Energy*

In$ United$ Energy’s$ network$ area,$ average$ consumption$ households$ on$ the$ worst$standing$ offer$ can$ save$ approximately$ $590$ per$ annum$ if$ switching$ to$ the$ best$published$market$offer.$ $Energy$Australia$ is$ the$ retailer$with$ the$best$market$offer$rates$in$this$network$area.$$Chart*14$United$Energy’s$network$area:$Estimated$annual$bills$(incl$GST)$for$electricity$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)$*

*$As$ in$other$network$areas,$ the$difference$between$ the$best$and$ the$worst$market$offers$ is$ significant.$ Energy$Australia’s$ offer$ is$ approximately$ $500$ less$ per$ annum$than$QEnergy’s$market$ offer$ post$ discounts$ for$ households$with$ this$ consumption$level.$Figure$5$below$shows$estimated$annual$bills$for$market$offers$post$discounts$in$United$Energy’s$network$area$as$well$their$current$ranking$compared$to$their$offers$six$months$ago$(brackets).$*

$$$$$$$$$$$$$**

900%1,000%1,100%1,200%1,300%1,400%1,500%1,600%1,700%1,800%1,900%2,000%2,100%

Retail"Offers"in"United"Energy's"area"


25

Figure*5$United$Energy’s$network$area:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$per$annum$(single$rate)26$$

$

$

$

$

$

**


Energy$Australia$$$$$$$$$$$$$$1,212$$$$$$$$$$$$$$$$$1$$$(10)$

Simply$Energy$ $$$$$$$$$$$$$1,231$$$$$$$$$$$$$$$$$2$$$$$(_)$

Red$Energy$ $$$$$$$$$$$$$$1,254$$$$$$$$$$$$$$$$$3$$$$$(3)$

Powershop$ $$$$$$$$$$$$$1,281$$$$$$$$$$$$$$$$$4$$$$$(1)$

Powerdirect$ $$$$$$$$$$$$$1,299$$$$$$$$$$$$$$$$$$5$$$$$(4)$

Momentum$ $$$$$$$$$$$$$1,301$$$$$$$$$$$$$$$$$$$6$$$$$(6)$

Lumo$Energy$ $$$$$$$$$$$$$1,308$$$$$$$$$$$$$$$$$$$7$$$$(7)%%Alinta$ $ $$$$$$$$$$$$$1,315$$$$$$$$$$$$$$$$$$$8$$$$(9)$

Sumo$Power$$$$$$$$$$$$$$$$$$$$1,324$$$$$$$$$$$$$$$$$$$$9$$$$(_)$

Dodo$ $ $$$$$$$$$$$$$1,325$$$$$$$$$$$$$$$$$$10$$$(12)$

Diamond$$$$$$$$$$$$$$$$$$$$$$$$$$$1,338$$$$$$$$$$$$$$$$$$11$$$$(_)$

Online$Power$&$Gas$$$$$$$1,339$$$$$$$$$$$$$$$$$$$12$$$$(_)$

AGL$ $ $$$$$$$$$$$$$1,349$$$$$$$$$$$$$$$$$$$13$$$$(5)$

Origin$Energy$ $$$$$$$$$$$$$1,363$$$$$$$$$$$$$$$$$$$14$$$$(8)$

People$Energy$ $$$$$$$$$$$$$1,369$$$$$$$$$$$$$$$$$$$15$$$$(2)$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$1,376$$$$$$$$$$$$$$$$$$$16$$$$(_)$

Click$Energy$ $$$$$$$$$$$$$1,430$$$$$$$$$$$$$$$$$$$17$$$(12)$$$$$

Commander$$$$$$$$$$$$$$$$$$$$$1,480$$$$$$$$$$$$$$$$$$$18$$$$(_)$

QEnergy$ $$$$$$$$$$$$$1,739$$$$$$$$$$$$$$$$$$$19$$(13)$

26

2.2*Gas*market*offers*July*201527**$

• Gas$ market$ offers$ (including$ discounts$ and$ pay$ on$ time$ discounts)$ are$ on$average$4.8%$lower$compared$to$one$year$ago.28$$$

• Typical$consumption$households$(63,000Mj)$can$save$$370$_$$500$per$annum$(depending$on$ their$gas$ zone)$ if$ switching$ from$the$worst$ standing$offer$ to$the$best$market$offer.29$

• The$ greatest$ potential$ savings$ are$ in$ the$ Tru$ Central$ gas$ zone$ (the$ outer$western$suburbs,$Geelong$region$and$the$Bellarine$peninsula).30$

$• The$ difference$ between$ the$ best$ and$ the$worst$market$ offers$ ranges$ from$

$140$per$annum$(Origin$South$East$gas$zone)$to$$250$(Tru$East$gas$zone)$for$customers$with$typical$consumption$levels.31$$

$• The$ price_spread,$ or$ difference$ between$ the$worst$ standing$ offer$ and$ best$

market$ offer,$ has$ increased.$ However,$ the$ price_spread$ for$ market$ offers$alone$has$decreased$compared$to$January$2015$(when$the$range$was$$170_$315).32$

$Chart$15$below$shows$the$retail$market$offer$price_spread$within$each$of$the$eight$main$gas$pricing$zones.$$*****************

27$The$market$offers$were$collected$on$the$2nd$of$July$2015$and$it$should$be$noted$that$retailers$may$change$their$rates$at$any$time.$28$Based$on$stand$alone$gas$offers$only$(dual$fuel$offers$are$not$included).$29$Based$on$the$worst$of$the$retailers’$standing$offer$and$the$best$of$the$published$market$offers$(including$additional$discounts$and/or$pay$on$time$discounts).$30$Ibid.$31$Households$using$63,000Mj$per$annum.$All$market$offer$bills$include$additional$discounts$and/or$pay$on$time$discounts.$$$32$St$Vincent$de$Paul$Society,$Victorian$Energy$Prices$January$2015,$An$update$report$on$the$Victorian$TariffDTracking$Project$by$May$Mauseth$Johnston$(January$2015).$$$

27

Chart*15$Price_spread$for$eleven$gas$market$offers$in$each$pricing$zone$post$July$2015$(incl$GST),$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum$$*

$$$As$ with$ electricity,$ additional$ discounts$ apply$ to$ the$ gas$market$ offer$ rates.$ $ The$majority$of$these$discounts$are$now$conditional$on$the$customer$paying$the$bill$by$the$ due$ date.$ Table$ 2$ below$ shows$ additional$ discounts$ applicable$ to$ the$ gas$retailers’$published$market$offer$rates.*$Table*2*Gas$market$offer$features$post$July$201533$*Retailer$ Guaranteed$

discounts$Fixed$term/$benefit$period$

Early$Termination$Fee$

Pay$on$time$discounts$

Other$(bonuses,$incentives)$

AGL$ No$ 1$year$ No$ 16%$off$usage$ Yes$Origin$ No$ 1$year$ No$ 18%$off$usage$ No$Energy$Aus$$ No$ 1$year$ No$ 18%$off$usage$ No$Momentum^$ No$ No$ No$ No$ No$Simply^$$ 17%$off$bill$ 2$years$ $22$ No$ No$Lumo^$ No$ 2$years$ $80$ 12%$off$bill$ Yes$Red^$ No$ 2$years$ $20$ 10%$off$bill$ No$Alinta^$ No$ No$ No$ 15%$off$usage$ No$Dodo^$ No$ No$ No$ 20%$off$usage$ No$Click$ No$ No$ No$ 16%$off$usage$ No$Covau$ No$ 1$year$ $20*$ 16%$off$usage$ No$

^$These$retailers$only$offer$gas$to$customers$that$sign$up$for$electricity$(dual$fuel)$*$Covau’s$price$and$product$information$statement$does$not$stipulate$the$amount$charged$for$early$termination$

$$$**

33$These$market$offers$are$features$have$been$published$on$the$retailers’$websites$on$the$2nd$of$July$2015.$

900%950%

1,000%1,050%1,100%1,150%1,200%1,250%1,300%1,350%1,400%

1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%

$"per"annum"

Retail"offers"

Origin%Metro%

AGL%South%

Origin%North%

Tru%East%

Origin%SE%

Tru%West%

AGL%North%

Tru%Central%

28

2.2.1*Potential*savings*?*Differences*between*gas*offers**

Typical$consumption$households$(63,000Mj$per$annum)$on$the$worst$standing$offer$can$ save$ $370$ _$ $500$ per$ annum$ if$ switching$ to$ the$ best$ published$market$ offer$(depending$on$their$gas$zone).$$$Charts$16$_$23$below$show$annual$retail$bills$for$typical$consumption$(63,000Mj$per$annum)$for$each$of$the$eight$main$gas$zones.$The$blue$columns$to$the$left$represent$the$standing$offer$bill,$ the$red$columns$are$the$market$offers$ including$guaranteed$discounts$(but$not$pay$on$time$discounts)$while$the$green$columns$are$market$offer$bills$including$pay$on$time$discounts.34$As$only$four$of$the$eleven$retailers$offer$gas$as$ a$ stand$ alone$ product,$ figures$ 6$ _$ 13$ below,$ which$ rank$ gas$ market$ offers$according$ to$ size$ of$ annual$ bill,$ do$ not$ include$ retailers$ that$ only$ offer$ gas$ in$conjunction$with$electricity$contracts.35$$$Origin*Metro*Gas*Zone*

In$ the$ Origin$ Metro$ gas$ zone,$ average$ consumption$ households$ on$ the$ worst$standing$ offer$ can$ save$ approximately$ $370$ per$ annum$ if$ switching$ to$ the$ best$published$market$offer.$$Dodo$is$the$retailer$with$the$best$market$offer$rates$in$this$gas$zone,$however,$as$Dodo$only$offer$gas$in$conjunction$with$an$electricity$contract$it$should$be$noted$that$the$best$stand_alone$gas$offer$is$Energy$Australia’s$(chart$16).$*Chart*16$Origin$Metro$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum36*

$$$$

34$Based$on$market$offer$bills$that$include$discounts$and$pay$on$time$discounts.$35$As$a$retailer$with$good$value$gas$rates$can$have$expensive$electricity$rates$(and$vice$versa),$we$seek$to$focus$on$retail$offers$available$to$customers$independently$from$other$products.$$36$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$

800%900%

1,000%1,100%1,200%1,300%1,400%1,500%

Retail"offers"in"Origin"Metro"gas"zone"

Standing% Market%(ex%POT)% Market%(incl%POT)%

29

Figure$6$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$ in$ the$ Origin$Metro$ gas$ zone$ as$ well$ as$ how$ they$ ranked$ compared$ to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(Energy$Australia)$and$the$worst$(Click)$is$approximately$$50$per$annum.$$Figure*6$Origin$Metro$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum37$$

$

$

$**AGL*South*Gas*Zone*

In$the$AGL$South$gas$zone,$average$consumption$households$on$the$worst$standing$offer$ can$ save$ approximately$ $375$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$$Dodo$is$again$the$retailer$with$the$best$market$offer$rates$in$this$gas$zone,$however,$as$Dodo$only$offer$gas$ in$conjunction$with$an$electricity$contract$ it$should$again$be$noted$that$the$best$stand_alone$gas$offer$is$Origin’s$(chart$17).$*Chart*17$AGL$South$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum38*

$$

37$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$38$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$

Energy$Australia$$ $$1,164$$$$$$$$$$$$(3)$

Origin$Energy$ $ $$1,170$$$$$$$$$$$$(2)$

AGL$ $ $ $$1,178$$$$$$$$$$$$(1)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,216$$$$$$$$$$$$(_)$$$$$

800%900%

1,000%1,100%1,200%1,300%1,400%1,500%1,600%

Retail"offers"in"AGL"South"gas"zone"


30

Figure$7$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$in$the$AGL$South$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(Origin)$and$the$worst$(Click)$is$approximately$$90$per$annum.*$Figure*7$AGL$South$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum39$$

$

***Origin*North*Gas*Zone*

In$ the$ Origin$ North$ gas$ zone,$ average$ consumption$ households$ on$ the$ worst$standing$ offer$ can$ save$ approximately$ $400$ per$ annum$ if$ switching$ to$ the$ best$published$market$offer.$$Momentum$is$the$retailer$with$the$best$market$offer$rates$in$ this$ gas$ zone,$ however,$ as$ Momentum$ only$ offer$ gas$ in$ conjunction$ with$ an$electricity$ contract$ it$ should$ be$ noted$ that$ the$ best$ stand_alone$ gas$ offer$ is$ AGL’s$(chart$18).$$Chart*18$Origin$North$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum40*

$


Origin$Energy$ $ $$1,113$$$$$$$$$$$$(1)$


AGL$ $ $ $$1,169$$$$$$$$$$$$(2)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,202$$$$$$$$$$$$(_)$$$$$

800%900%

1,000%1,100%1,200%1,300%1,400%1,500%1,600%

Retail"offers"in"Origin"North"gas"zone"


31

Figure$8$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$in$the$Origin$North$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(AGL)$and$the$worst$(Energy$Australia)$is$$45$per$annum.*$Figure*8$Origin$North$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2016,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum41*

*

*

**Tru*East*Gas*Zone*

In$ the$ Tru$ East$ gas$ zone,$ average$ consumption$ households$ on$ the$worst$ standing$offer$ can$ save$ approximately$ $400$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$$Dodo$is$the$retailer$with$the$best$market$offer$rates$in$this$gas$zone,$however,$as$Dodo$only$offer$gas$in$conjunction$with$an$electricity$contract$it$should$be$noted$that$the$best$stand_alone$gas$offer$is$AGL’s$(chart$19).$$Chart*19$Tru$East$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum42$

$$$ 41$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$42$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$

AGL$ $ $ $$1,195$$$$$$$$$$$$(1)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,233$$$$$$$$$$$$(_)$$$$$

Origin$Energy$ $ $$1,236$$$$$$$$$$$$(2)$


800%900%

1,000%1,100%1,200%1,300%1,400%1,500%

Retail"offers"on"Tru"East"gas"zone"


32

Figure$9$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$ in$ the$Tru$East$ gas$ zone$as$well$ as$how$ they$ ranked$ compared$ to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(AGL)$and$the$worst$(Energy$Australia)$is$approximately$$75$per$annum.*$Figure*9$Tru$East$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum43$*

$

**Origin*South*East*Gas*Zone*

In$ the$Origin$ South$ East$ gas$ zone,$ average$ consumption$ households$ on$ the$worst$standing$ offer$ can$ save$ approximately$ $370$ per$ annum$ if$ switching$ to$ the$ best$published$market$offer.$$Dodo$is$again$the$retailer$with$the$best$market$offer$rates$in$this$ gas$ zone,$ however,$ as$ Dodo$ only$ offer$ gas$ in$ conjunction$ with$ an$ electricity$contract$it$should$again$be$noted$that$the$best$stand_alone$gas$offer$is$AGL’s$(chart$20).$$Chart*20$Origin$South$East$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum44$

$$


AGL$ $ $ $$1,163$$$$$$$$$$$$(1)$

Origin$Energy$ $ $$1,167$$$$$$$$$$$$(2)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,212$$$$$$$$$$$$(_)$$$$$


800%900%

1,000%1,100%1,200%1,300%1,400%1,500%1,600%

Retail"offers"in"Origin"South"East"gas"zone"


33

Figure$10$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$in$the$Origin$South$East$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(AGL)$and$the$worst$(Energy$Australia)$is$approximately$$80$per$annum.*$Figure*10$Origin$South$East$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum45$

**Tru*West*Gas*Zone*

In$ the$Tru$West$gas$ zone,$average$consumption$households$on$ the$worst$ standing$offer$ can$ save$ approximately$ $380$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$$Momentum$is$the$retailer$with$the$best$market$offer$rates$in$this$gas$zone,$ however,$ as$ Momentum$ only$ offer$ gas$ in$ conjunction$ with$ an$ electricity$contract$it$should$be$noted$that$the$best$stand$alone_gas$offer$is$Origin’s$(chart$21).$$Chart*21*Tru$West$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum46$

$$

45$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$46$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$$

AGL$ $ $ $$1,170$$$$$$$$$$$$(1)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,212$$$$$$$$$$$$(_)$$$$$

Origin$Energy$ $ $$1,226$$$$$$$$$$$$(2)$


800%900%

1,000%1,100%1,200%1,300%1,400%1,500%

Retail"offers"in"Tru"West"gas"zone"


34

Figure$11$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$ in$the$Tru$West$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(Origin)$and$the$worst$(Energy$Australia)$is$$85$per$annum.**Figure*11$Tru$West$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum47$*

$

*

**AGL*North*Gas*Zone*

In$the$AGL$North$gas$zone,$average$consumption$households$on$the$worst$standing$offer$ can$ save$ approximately$ $460$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$ $Again,$Momentum$is$the$retailer$with$the$best$market$offer$rates$ in$this$ gas$ zone,$ however,$ as$ Momentum$ only$ offer$ gas$ in$ conjunction$ with$ an$electricity$contract$it$should$be$noted$that$the$best$stand_alone$gas$offer$is$Origin’s$(chart$22).$$Chart*22$AGL$North$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum48$

$$

47$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$48$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$$

Origin$Energy$ $ $$1,121$$$$$$$$$$$$(1)$

AGL$ $ $ $$1,154$$$$$$$$$$$$(2)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,191$$$$$$$$$$$$(_)$$$$$


800%900%

1,000%1,100%1,200%1,300%1,400%1,500%1,600%

Retail"offers"in"AGL"North"gas"zone"


35

Figure$12$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$in$the$AGL$North$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(Origin)$and$the$worst$(Click)$is$$50$per$annum.*$Figure*12*AGL$North$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum49**

*

$

$*Tru*Central*Gas*Zone*

In$the$Tru$Central$gas$zone,$average$consumption$households$on$the$worst$standing$offer$ can$ save$ approximately$ $500$ per$ annum$ if$ switching$ to$ the$ best$ published$market$offer.$$Momentum$is$the$retailer$with$the$best$market$offer$rates$in$this$gas$zone,$ however,$ as$ Momentum$ only$ offer$ gas$ in$ conjunction$ with$ an$ electricity$contract$it$should$be$noted$that$the$best$stand_alone$gas$offer$is$Origin’s$(chart$23).$$Chart*23$Tru$Central$gas$zone:$Estimated$annual$bills$(incl$GST)$for$gas$standing$and$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum50$

$$$ 49$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$50$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$2.$

Origin$Energy$ $ $$1,197$$$$$$$$$$$$(2)$

AGL$ $ $ $$1,212$$$$$$$$$$$$(1)$


Click$Energy$ $$$$$$$$$$$$$$$$$$1,249$$$$$$$$$$$$(_)$$$$$

800%900%

1,000%1,100%1,200%1,300%1,400%1,500%1,600%

Retail"offers"in"Tru"Central"gas"zone"


36

Figure$13$below$shows$estimated$annual$bills$for$stand$alone$gas$market$offers$post$discounts$in$the$Tru$Central$gas$zone$as$well$as$how$they$ranked$compared$to$other$retailers$six$months$ago$(in$brackets).$The$difference$between$the$best$(Origin)$and$the$worst$(Energy$Australia)$is$approximately$$130$per$annum.*$Figure*13$Tru$Central$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$63,000Mj$per$annum51*

$**2.3*Dual*fuel*offers*July*201552***

As$seven$out$of$11$gas$retailers$only$offer$gas$as$a$dual$fuel$product$we$have$included$a$comparison$of$dual$fuel$offers$for$households$in$Citipower’s$electricity$network$and$the$Tru$East$gas$zone.$Chart$24$below$shows$that$Simply$Energy$currently$offers$the$best$value$dual$fuel$product$for$typical$consumption$households$in$this$area.$Click$Energy’s$offer$is$the$most$expensive$($335$more$than$Simply$Energy’s).$Furthermore,$Simply$Energy’s$dual$fuel$offer$is$almost$$50$less$per$annum$than$the$best$single$fuel$electricity$and$gas$offers$combined$($2,246).53$That$said,$customers$considering$dual$fuel$offers$should$carefully$compare$both$gas$and$electricity$rates$as$only$2$of$the$11$dual$fuel$offers$listed$in$figure$14$below$provide$better$value$than$the$best$single$fuel$electricity$offer$and$single$fuel$gas$offer$combined.$$$$$******

51$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$52$The$annual$bills$for$dual$fuel$offers$are$based$on$a$single$retailer$supplying$a$household$with$both$fuel$sources$and$an$annual$consumption$of$4,800$kWh$(single$rate)$and$63,000$Mj.$$The$market$offers$were$collected$on$the$1st$and$2nd$of$July$2015$and$it$should$be$noted$that$retailers$may$change$their$rates$at$any$time.$53$Figure$1$(section$2.1)$shows$that$the$best$value$electricity$offer$is$$1,083$per$annum$(Simply$Energy)$and$the$best$value$gas$offer$is$$1,163$per$annum$(AGL$in$figure$9$in$section$2.2).$$

Origin$Energy$ $ $$1,197$$$$$$$$$$$$(1)$

AGL$ $ $ $$1,221$$$$$$$$$$$$(2)$

Click$Energy$ $$$$$$$$$$$$$$$$$$1,239$$$$$$$$$$$$(_)$$$$$


37

Chart*24$Citipower$network$and$Tru$East$gas$zone:$Estimated$annual$bills$(incl$GST)$for$dual$fuel$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$and$63,000Mj$per$annum54$

*Figure*14$Citipower$network$and$Tru$East$gas$zone:$Lowest$to$highest$annual$bills$(incl$GST)$for$dual$fuel$market$offers$post$July$2015,$including$discounts$and$pay$on$time$discounts$_$Households$consuming$4,800kWh$and$63,000Mj$per$annum55*

*

*

*

*

*

*

*

*

*

*

*

54$Discounts$(excluding$GST)$have$been$applied$to$consumption$and/or$total$bill$as$per$offers$listed$in$the$table$1$and$2$with$the$exception$of$AGL$which$offers$an$additional$2%$off$consumption$(electricity$and$gas)$for$dual$fuel$customers.$$55$Only$retailers$that$offer$stand_alone$gas$contracts$have$been$included$in$this$figure.$These$bill$estimates$are$based$on$rates$published$on$the$retailers’$websites$on$the$1st$and$2nd$of$July$2015$and$it$must$be$noted$that$retailers$may$change$their$rates$at$any$time.$$

0%

500%

1,000%

1,500%

2,000%

2,500%

3,000%

Electricity%

Gas%

Simply$Energy$ $$$$$$$$$$$$2,199$

Dodo$ $ $$$$$$$$$$$$2,212$

Momentum$ $$$$$$$$$$$$$2,333$

Origin$Energy$ $$$$$$$$$$$$2,378$

Red$Energy$ $$$$$$$$$$$$$2,392$

AGL$ $ $$$$$$$$$$$$2,394$

Energy$Australia$$$$$$$$$$$$$2,398$

Lumo$Energy$ $$$$$$$$$$$$2,400%%Alinta$ $ $$$$$$$$$$$$2,414$

Covau$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$2,516$

Click$Energy$ $$$$$$$$$$$$2,533$$$

38

3.*Retail*market*developments**This$section$discusses$emerging$issues$and$trends$in$the$energy$retail$market$and$for$this$update$report$we$have$decided$to$highlight$three$emerging$issues:$$

1)$Offers$with$record$high$(pay$on$time)$discounts$$2)$Electricity$market$offer$eligibility$for$solar$customers$3)$AGL’s$new$demand$tariff$for$residential$customers$

*3.1*Discounting**Energy$ retailers$ are$ now$ offering$ record$ high$ discounts$ on$ their$ rates.$ Shown$ in$section$2$above,$electricity$offers$typically$come$with$a$30%$discount$and$a$discount$of$15_20%$ is$commonly$applied$to$gas$offers.$Two$years$ago,$10_15%$on$electricity$and$gas$offers$were$common,$so$while$the$discounts$remain$consistent$for$gas$they$have$risen$sharply$for$electricity.$$In$addition,$more$and$more$retailers$make$this$discount$conditional$upon$bills$being$paid$ on$ time.56$ Energy$ Australia,$ for$ example,$ currently$ offers$ a$ 35%$ discount$ on$consumption$ charges$ for$bills$ that$are$paid$on$ time.$That$means$ that$a$household$using$ 4,800$ kWh$ per$ annum$ (single$ rate)$ in$ SP$ Ausnet’s$ energy$ network$ can$ save$$460$per$annum$ if$ they$always$pay$ their$bills$on$ time.$Conversely,$ it$means$ that$a$household$that$does$not$pay$their$bills$on$time$is$effectively$hit$with$a$$500$penalty$(including$GST).57$$$$While$prompt$payment$clearly$is$beneficial$to$retail$businesses,$we$do$not$believe$it$amounts$to$anywhere$near$35%$of$electricity$costs.$However,$big$discounts$are$easy$to$market$and$being$conditional$upon$prompt$payment,$not$always$payable$by$the$retailers.$ If$ we$ assume$ that$ 10,000$ average$ consumption$ households$ sign$ up$ to$Energy$Australia’s$offer$ and$ that$30%$of$ these$ customers$do$not$pay$ their$bills$on$time,$ Energy$ Australia$ will$ net$ an$ additional$ $1.26$million$ per$ annum$ from$ these$customers.58$$$Approximately$ 25%$ of$ customers$ are$ still$ on$ standing$ offers$ in$ Victoria.$ These$customers$ pay$ increasingly$more$ for$ electricity$ compared$ to$ customers$ on$market$offers$and$ so$do$market$offer$ customers$unable$ to$pay$ their$bills$on$ time,$as$ they$effectively$pay$standing$offer$rates.$Two$years$ago,$ the$average$standing$offer$was$20%$more$ than$ the$ average$ market$ offer$ (including$ discounts).$ Now$ the$ average$standing$offer$is$25%$more$than$the$average$market$offer.59$$$

56$Simply$Energy$is$the$only$retailer$currently$offering$discounts$that$are$not$conditional$upon$bills$being$paid$on$time.$57$Discounts$are$applied$to$rates$excluding$GST$but$if$the$discount$does$not$apply,$the$customer$obviously$has$to$pay$GST$on$the$full$rate.$58$Based$on$the$$420$being$the$average$(across$all$network$areas)$annual$discount$for$households$using$4,800$kWh$per$annum.$$59$Average$based$on$all$retailers$in$all$network$areas$and$bills$based$on$households$using$4,800$kWh/annum,$single$rate.$$

39

Charts$ 25$ to$ 29$ below$ show$ average$ standing$ offer$ and$ market$ offer$ (including$discounts)$bills$for$each$network$area$from$July$2013$to$July$2015.$$*Chart* 25$ Estimated$ average$ annual$ bills$ for$ standing$ offer$ (SO)$ and$market$ offer$ (MO)$ customers$using$4,800$kWh$per$annum$(single$rate)$in$Citipower’s$area$

$$*Chart* 26$ Estimated$ average$ annual$ bills$ for$ standing$ offer$ (SO)$ and$market$ offer$ (MO)$ customers$using$4,800$kWh$per$annum$(single$rate)$in$Powercor’s$area$

$************

1100%

1200%

1300%

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1700%

Jul'13% Jan'14% Jul'14% Jan'15% Jul'15%

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SO%

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40

Chart* 27$ Estimated$ average$ annual$ bills$ for$ standing$ offer$ (SO)$ and$market$ offer$ (MO)$ customers$using$4,800$kWh$per$annum$(single$rate)$in$SP$Ausnet’s$area$

$*Chart* 28$ Estimated$ average$ annual$ bills$ for$ standing$ offer$ (SO)$ and$market$ offer$ (MO)$ customers$using$4,800$kWh$per$annum$(single$rate)$in$Jemena’s$area$

$****************

1400%

1500%

1600%

1700%

1800%

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2000%


SO%

MO%

1300%

1400%

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41

Chart* 29$ Estimated$ average$ annual$ bills$ for$ standing$ offer$ (SO)$ and$market$ offer$ (MO)$ customers$using$4,800$kWh$per$annum$(single$rate)$in$United$Energy’s$area$

$**The$ cost$ of$ energy$ has$ decreased$ but$ retailers$ have$ no$ incentive$ to$ reduce$ their$standing$ offer$ prices$ (effectively$ their$ base$ rate)$ to$ reflect$ these$ reduced$ costs.$There$is$retail$competition$in$Victoria,$however,$and$the$retailers$are$thus$competing$on$ offering$ the$ biggest$ pay$ on$ time$ discount.$ Origin$ Energy,$ AGL$ and$ Energy$Australia$vary$the$discount$offered$to$new$customers$several$times$a$year.$There$are$also$some$retailers$avoiding$the$ ‘discount$bonanza’$and$trying$to$compete$on$their$base$ rate$ instead.$ The$ vast$majority,$ however,$ run$with$ the$ standard$ approach$ of$what$appears$to$be$inflated$base$rates$and$big$pay$on$time$discounts.$$$This$market$model$works$well$ for$households$ that$continuously$monitor$electricity$offers,$request$a$better$discount$from$their$retailer$or$switch$if$they$think$they$can$do$better.$This$model$does$not$work$for$Victorians$still$on$a$standing$offer$–$clearly$‘sticky’$customers$that$may$never$sign$up$for$a$market$offer.$Nor$does$not$work$for$households$ who$ tend$ to$ pay$ their$ bills$ late$ due$ to$ cash_flow$ problems$ or$ other$reasons.$ It$ also$ does$ not$work$ for$ the$ ‘snoozer’$ –$ the$ customer$who$ 2$ years$ ago$diligently$ compared$ all$ offers$ and$ identified$ the$ best$ option$ based$ on$ their$consumption$ profile:$ either$ the$ benefit$ term$has$ expired$ by$ now$or$ the$ customer$receives$ a$ discount$ well$ below$ today’s$ standard.$ In$ sum,$ this$ market$ model$disfavours$sticky,$snoozy$and$cash$constrained$customers$and$while$we$do$not$have$numbers$to$prove$it,$we$believe$a$significant$number$of$Victorian$households$would$fall$into$these$categories.$$$In$order$to$ensure$that$retailers$develop$offers$that$are$based$on$rates$reflecting$the$costs$ they$ incur$ instead$ of$ offers$ being$ varied$ in$ response$ to$ their$ competitors’$discounts,$the$gazettal$process$for$standing$offers$must$change.$Since$January$2012$we$have$continued$to$recommended$that:$$*The$ Victorian$ Government$ changes$ the$ standing$ offer$ gazettal$ arrangements.$We$propose$an$arrangement$of$fixed$gazettal$dates$(e.g.$1$June$and$1$December$every$

1200%

1300%

1400%

1500%

1600%

1700%

1800%


SO%

MO%

42

year$ with$ tariffs$ taking$ effect$ one$ month$ later)$ where$ retailers$ can$ change$ or$maintain$their$prices$but$are$required$to$explain$the$rationale$for$their$decision$in$a$supplementary$statement.60**3.2*Solar*PV*offers**Almost$ 250,000$ Victorian$ homes$ have$ solar$ PV$ but$ solar$ customers’$ eligibility$ for$electricity$ retail$ market$ offers$ is$ declining.61$ While$ some$ retailers$ do$ not$ apply$different$eligibility$criteria$for$solar$and$non_solar$households,$others$restrict$access$to$the$electricity$offers$with$the$highest$discounts$(and/or$lowest$rates)$to$non_solar$households$only.62$$A$comparison$of$retailers’$offers$that$are$available$to$solar$customers$and$offers$that$are$ not$ shows$ that$ the$ annual$ bill$ for$ a$ solar$ household$ (with$ a$ 1.5kW$ system$installed)$ in$the$Citipower$network$could$be$over$$200$less$ if$the$retailer$would$let$them$access$their$best$market$offer.63$$*Table$3$Difference$between$retailers’$best$offer$available$to$solar$households$and$best$offer$not$

available64$Retailer* Best*offer*(not*available*to*

solar*customers)*Best*offer*(available*to*solar*customers)*

Difference*to*annual*bill*

AGL* Saver$26%$$

Saver$15%$ $130$

Energy*Australia* Flexi$Saver$(non_solar)$ Rate$Fix$$

$45$

Click* Platinum$$

Shine$ $110$

Powerdirect* 30$percent$$

Standing$offer$ $210$

Red* Living$Energy$Saver$(non_solar)$

Living$Energy$Saver$(solar)$ $60$

Simply**

Guaranteed$(non_solar)$ Guaranteed$(solar)$$

$40$$

60$We$first$raised$this$issue$in$January$2012.$See$St$Vincent$de$Paul$Society,$Victorian$Energy$Prices$July$2011DJanuary$2012,$An$update$report$on$the$Victorian$TariffDTracking$Project$by$May$Mauseth$Johnston$(January$2012)$61$Number$of$solar$systems$installed$based$on$Clean$Energy$Council,$Clean$Energy$Australia$Report$2014,$43$62$Households$with$solar$PV$can,$for$example,$access$all$of$Origin,$Dodo,$Diamond,$Lumo,$Sumo$and$Powershop’s$market$offers.$Note$that$while$all$retailers$with$more$than$5000$customers$must$offer$supply$to$a$solar$customer$and$pay$a$minimum$feed$in$tariff$of$6.2$c/kWh$(since$1$January$2015),$the$retailer$is$free$to$determine$the$specific$offers$solar$customers$have$access$to.$As$such,$some$retailers$only$offer$standing$offer$rates$to$solar$customers.$63$Based$on$electricity$(single$rate)$offers$available$in$Citipower$network$as$of$1$July$2015,$annual$household$consumption$of$4800$kWh,$a$generation$capacity$of$1.539$MWh$per$kW$installed$and$an$export$rate$of$14.9%.$Feed$in$tariff$(FIT)$as$per$solar$market$offer$(or$standing$offer$if$no$solar$market$offers$available)$applied$to$both$solar$and$non_solar$offers.$64$Bill$calculations$include$guaranteed$discounts,$pay$on$time$discounts,$account$credits$and$GST.$No$value$has$been$calculated$for$the$1$month$free$electricity$offered$by$AGL.$FIT$rates$have$been$applied$to$non_solar$offers$in$order$to$compare$the$potential$value$of$the$offer$to$solar$households.$

43

While$ this$ could$ be$ interpreted$ as$ a$ penalty$ payment$ for$ solar$ customers,$ it$ is$important$ to$ note$ that$ the$ greatest$ difference$ in$ annual$ bills$ is$ still$ between$retailers’$ solar$ offers$ rather$ than$ between$ a$ retailer’s$ solar$ and$ non_solar$ offers.$Chart$30$below$shows$that$Simply’s$solar$offer$would$produce$an$annual$bill$that$is$approximately$ $265$ less$ than$ Powerdirect’s$ solar$ offer$ (yellow$ columns$ represent$offers$available$to$solar$customers).65$$Chart*30*Retailers$solar$(yellow)$and$non_solar$(grey)$offers$_$estimated$annual$bills$for$solar$customers*

$$$**3.3*Demand*tariffs**AGL$gazetted$an$optional$demand$tariff$ for$households$ in$United$Energy’s$network$are$that$took$effect$on$3$July$2015.$A$demand$tariff$charges$for$energy$used$(kWh)$as$well$ as$ a$ household’s$ maximum$ demand$ (kW)$ for$ a$ specific$ time$ (i.e.$ for$ each$month).$There$may$also$be$a$minimum$threshold$for$demand$applied,$so$even$if$all$appliances$were$turned$off$for$a$month$a$demand$charge$would$still$be$payable.$$$*************

65$Based$on$the$same$assumptions$for$consumption,$solar$systems$and$bill$calculations$as$used$in$table$3$above.$$

0%

200%

400%

600%

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1000%

1200%

44

Table*4$AGL’s$demand$tariff$$Charges* Costs*(incl.*GST)* Details*Fixed*daily*supply*charge* 119.845$c/day$ $Energy*consumption*at*peak*times*

18.865$c/kWh$$

3_9pm$on$weekdays$

Energy*consumption*at*off?peak*times*

16.918$c/kWh$$

All$other$times$

Summer*demand*charge* 39.369$c/kW/day$$$

The$ charge$ is$ applied$ to$ monthly$ maximum$demand$occurring$between$3_9pm$every$day$of$the$ week.$ The$ summer$ period$ is$ from$ 1$December$ to$ 31$ March.$ Minimum$ demand$threshold$of$1.5kW.$

Non?summer*demand*charge**

21.032$c/kW/day$$$

The$ charge$ is$ applied$ to$ monthly$ maximum$demand$occurring$between$3_9pm$every$day$of$the$ week.$ The$ non_summer$ period$ is$ from$ 1$April$ to$ 3o$ November.$ Minimum$ demand$threshold$of$1.5kW.$

$In$ order$ to$ estimate$ the$ annual$ bill$ for$ households$ on$ this$ demand$ tariff,$ we$consulted$with$United$Energy$to$obtain$typical$household$demand$and$consumption$profiles.$$Table*5$United$Energy’s$demand$and$consumption$profiles$$$Month$ Demand$Peak$(kW)$ Energy$Peak$(kWh)$

$Energy$Off_Peak$(kWh)*

January* 3.75$ 86.80$ 265.13$February* 3.53$ 84.68$ 258.65$March* 3.12$ 89.16$ 272.34$April* 3.20$ 84.95$ 259.47$May* 3.22$ 94.13$ 287.52$June* 3.46$ 95.58$ 291.95$July* 3.56$ 98.85$ 301.95$August* 3.48$ 96.13$ 293.64$September* 3.17$ 87.83$ 268.27$October* 3.03$ 90.10$ 275.20$November* 3.12$ 86.60$ 264.52$December* 3.08$ 84.79$ 259.00$

Total* * 1,079.61* 3,297.63*$

$Based$on$United$Energy’s$customer$profile,$a$typical$household$consumes$4,377$kWh$per$annum$and$24.67%$of$this$consumption$occurs$at$peak$times$(from$3pm$to$9pm$on$ weekdays).$ To$ keep$ the$ bill$ calculation$ methodology$ for$ demand$ tariffs$consistent$ with$ the$ overall$ Tariff_Tracking$ methodology$ that$ assumes$ annual$consumption$of$4,800$kWh$for$dual$fuel$households$in$Victoria,$we$added$423$kWh$to$the$annual$consumption.$Of$these,$25%$(106$kWh)$were$allocated$to$peak$times$and$ 75%$ (317$ kWh)$ were$ allocated$ to$ off_peak$ times.$ We$ distributed$ these$additional$kWh$evenly$across$the$months.$$

45

Table*6$The$Victorian$Tariff_Tracker’s$consumption$profile$(rounded$numbers)$$$Month$ Energy$Peak$(kWh)$

$Energy$Off_Peak$(kWh)*

January* 96$ 291$February* 93$ 285$March* 98$ 299$April* 94$ 286$May* 103$ 314$June* 104$ 318$July* 108$ 328$August* 105$ 320$September* 97$ 295$October* 99$ 302$November* 95$ 291$December* 94$ 285$Total* 1,186* 3,614*

*In$ order$ to$ calculate$ the$ demand$ charges,$we$ used$ the$ average$monthly$ summer$demand$ and$ average$ monthly$ non_summer$ demand$ based$ on$ United$ Energy’s$profile$and$multiplied$the$demand$by$number$of$summer/non_summer$days$as$well$as$AGL’s$demand$charge.$$Table*7$The$Victorian$Tariff_Tracker’s$calculation$of$demand$charge$costs$(per$annum)$$The$annual$cost$of$summer$demand$charge:$$

3.37$kW$x$121$days$x$39.369$c/kW/day$

The$annual$cost$of$non_summer$demand$charge:$$

3.28$kW$x$244$days$x$21.032$c/kW/day$

$Based$on$ these$assumptions,$ a$household$ consuming$4,800$ kWh$per$ annum$ (with$25%$ of$ total$ consumption$ attracting$ peak$ rates)$ and$ with$ a$ typical$ maximum$demand$profile$ for$United$Energy’s$ network$ area$will$ pay$$1,602$per$ annum$ if$ on$AGL’s$demand$tariff.$$A$ comparison$of$AGL’s$ standing$offers$ in$ the$United$Energy$network$ shows$ that$ a$household$ using$ 4,800$ kWh$ per$ annum$ may$ be$ better$ off$ on$ this$ demand$ tariff$compared$to$the$single$rate$and$TOU$(flexible$pricing)$tariffs.$$$$$$$$$

46

Chart*31*Estimated$annual$bills$for$AGL’s$standing$offers$as$of$July$2015$in$United$Energy’s$network$area$–$Households$using$4,800$kWh$per$annum,$bills$incl$GST66$

$****************************

66$The$bill$calculation$for$the$two$rate$tariff$assumes$40%$of$consumption$at$off$peak$times$and$the$TOU$bill$is$based$on$40%$peak,$40%$off$peak$and$20%$shoulder$$

1450%

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Single%rate% Two%rate% TOU%(Vlex)% Demand%tariff%

$"per"annum"

47

4.*Electricity*network*charges*and*bill?stack*trends*$The$ Victorian$ electricity$ networks$ introduce$ new$ Network$ Use$ of$ System$ (NUOS)$charges$as$of$1$January$every$year.$$These$NUOS$charges$comprise$Transmission$Use$of$System$(TUOS)$and$Distribution$Use$of$System$(DUOS)$and$the$retailers$can,$and$generally$will,$build$changes$to$the$NUOS$(in$relation$to$both$shape$and$price)$ into$their$retail$tariffs.67$$We$first$compared$NUOS$to$total$retail$bill$in$July$2012$and$the$charts$in$this$section$build$ on$ those$ presented$ in$ previous$ Tariff_Tracking$ up_date$ reports.68$ Chart$ 32$shows$how$the$NUOS$charges$have$increased$for$average$consumption$households$over$ the$ last$7$ years.$Customers$now$pay$between$$400$ (Citipower)$ and$$600$ (SP$Ausnet)$per$annum$in$NUOS$charges.$$*Chart*32*NUOS$charges$as$annual$cost$to$residential$consumers$from$2008$to$2015,$all$networks$(based$on$single$rate,$4,800kWh$per$annum,$GST$exclusive)69$$

***Network$charges$as$proportion$of$ total$bill$decreased$between$2008$and$2012$but$have$now$increased.$This$is$partly$due$to$the$removal$of$the$carbon$tax$in$July$2014,$which$mostly$impacted$on$the$wholesale$component$of$bills$and$therefore$increased$the$NUOS$proportion.$Still,$the$NUOS$proportion$remains$lower$than$it$was$in$2008$in$ most$ network$ areas,$ and$ only$ in$ the$ SP$ Ausnet$ network$ is$ the$ current$ NUOS$ 67$Note$that$NUOS$charges$do$not$include$smart$metering$costs.$68$See$SVDP,$Victorian$Energy$Prices$January$2012$–$July$2012,$An$updateDreport$on$the$Victorian$TariffDTracking$project$by$May$Mauseth$Johnston$(July$2012)$and$SVDP,$Victorian$Energy$Prices$September$2013,$An$updateDreport$on$the$Victorian$TariffDTracking$project$by$May$Mauseth$Johnston$(November$2013),$SVDP,$Victorian$Energy$Prices$July$2014,$An$updateDreport$on$the$Victorian$TariffDTracking$project$by$May$Mauseth$Johnston$(July$2014)$69$The$annual$NUOS$charges$have$been$calculated$by$allocating$1,200kWh$per$quarter$(again$based$on$annual$consumption$of$4,800kWh)$to$the$step$charges$stipulated$in$the$NUOS.$$The$annual$NUOS$cost$also$includes$fixed$charges.$$Note$that$as$United$Energy’s$NUOS$charges$the$last$three$years$have$been$seasonal$tariffs,$the$United$Energy$consumption$used$in$these$calculations$is$thus$based$on$a$proportional$allocation$of$a$5$month$summer$tariff$and$a$7$month$non_summer$(off_peak)$rate.%

150%

200%

250%

300%

350%

400%

450%

500%

550%

600%

650%

Citipower% Powercor% SP%Ausnet% Jemena% UE%

NUOS"($)"per"annum" 2008%

2009%

2010%

2011%

2012%

2013%

2014%

2015%

48

proportion$ of$ the$ annual$ bill$ higher$ than$ it$was$ in$ 2008$ (31%$ in$ 2015$ and$ 30%$ in$2008).$$$*Chart*33*NUOS$charges$(excl.$GST)$as$proportion$of$annual$bill$from$2008$to$2015,$all$networks$(based$on$average$single$rate$standing$offer,$4,800kWh$per$annum,$incl.$GST)70$$

$**********************

70$ The$NUOS$ proportion$ of$ total$ bill$ has$ been$ calculated$ using$ annual$ NUOS$ cost$ calculations$ (see$footnote$above)$and$ the$average$of$ the$ three$ incumbents$ retailers’$ standing$offers$as$of$ July$every$year$(from$2008$to$2014),$presented$as$annual$bills$for$households$using$4,800kWh$per$annum$(single$rate)$across$the$five$distribution$areas.$ $As$there$was$only$one$standing$offer$per$network/metering$type$in$July$2008,$the$2008$“average”$is$based$on$the$incumbent$retailer’s$standing$offer.$

0%

5%

10%

15%

20%

25%

30%

35%

Citipower% Powercor% SP%Ausnet% Jemena% UE%

%"of"annual"bill"

2008%

2009%

2010%

2011%

2012%

2013%

2014%

2015%

49

5.*Total*cost*of*energy*by*area***As$approximately$60%$of$Victorian$households$are$connected$to$both$electricity$and$gas,$ it$ is$ important$ to$analyse$whether$ there$are$areas$ that$have$experienced$high$increases$in$both$electricity$and$gas$prices,$and$conversely,$whether$there$are$areas$where$the$ increases$ in$electricity$and$gas$prices$are$ low.$Such$analysis$allows$for$a$more$detailed$understanding$of$ the$ total$ energy$ costs$ faced$by$households$across$Victoria.71$However,$as$only$a$few$retailers$have$gazetted$new$standing$offers$since$the$last$update$report$in$January$2015$(see$section$1$above),$the$analysis$presented$below$ focuses$ on$ energy$ costs$ per$ annum$ rather$ than$ increases.72$ This$ section$highlights$the$combined$energy$costs$for$average$consumption$households$as$well$as$the$ difference$ between$ standing$ offer$ and$ market$ offer$ bills$ in$ the$ different$electricity$and$gas$zones.$**Table*8$Average$annual$bills$for$electricity$standing$offer$customers$and$market$offer$customers$by$area,$July$2015,$single$rate,$4800kWh$per$annum$$Area$ Average$

standing$offer^$Average$market$offer*$

Difference$

Inner$city$and$Eastern$suburbs$(Citipower)$ $1,560$ $1,230$ $330$

Outer$Western$suburbs$and$Western$Victoria$(Powercor)$

$1,830$ $1,450$ $380$

Outer$Northern$and$Eastern$suburbs$and$Eastern$Victoria$(SP$Ausnet)$

$1,945$ $1,575$ $370$

Inner$West$and$Northern$suburbs$(Jemena)$ $1,805$ $1,435$ $370$

Outer$South$Eastern$suburbs$and$Mornington$Peninsula$(United$Energy)$

$1,685$ $1,350$ $335$

^$Average$annual$bill$based$on$the$three$incumbents’$standing$offers$*$Average$annual$bill$based$on$all$retailers’$market$offers$post$discounts/pay$on$time$discount$

**********

71$The$figures$in$tables$8$and$9$are$based$on$the$incumbent$retailers’$average$standing$offer$for$electricity$and$gas$customers$for$dual$fuel$households$using$4800kWh$and$63,000Mj$per$annum,$and$all_electric$households$using$7000kWh$(thereof$30%$off_peak).$To$calculate$the$increases$we$have$used$the$average$of$the$incumbent$retailers’$standing$offer$rates$rather$than$the$average$of$all$standing$offers.$$This$was$done$because$the$vast$majority$of$customers$on$the$standing$offer$are$with$the$incumbents$(AGL,$Origin$and$Energy$Australia).$Furthermore,$as$discussed$above,$market$offers$do$generally$reflect$the$increases$to$the$standing$offers.$72$The$Victorian$Tariff_Tracking$update$report$published$in$January$2015$shows$increases.$$

50

Table*9$Average$annual$bills$ for$ gas$ standing$offer$ customers$and$market$offer$ customers$by$area,$July$2015,$63,000Mj$per$annum$$Area$ Average$

standing$offer^$Average$market$offer*$

Difference$

Eastern$and$South$Eastern$suburbs$(Origin$Metro$zone)$

$1,365$ $1,180$ $185$$

Bayside$and$outer$South$Eastern$suburbs$(AGL$South$zone)$

$1,340$ $1,160$ $180$

Northern$and$North$Eastern$Victoria$(Origin$North$zone)$

$1,430$ $1,225$ $205$

CBD,$inner$city$and$North$Eastern$suburbs$$(TRU$East$zone)$

$1,390$ $1,195$ $195$

Frankston,$Mornington$Peninsula$and$Gippsland$(Origin$South$East$zone)$

$1,420$ $1,215$ $205$

Macedon$Ranges,$Bendigo,$Ballarat$and$Western$Victoria$(TRU$West$zone)$

$1,350$ $1,170$ $180$

Western$and$North$Western$suburbs$(AGL$North$zone)$

$1,415$ $1,220$ $195$

Outer$Western$suburbs,$Geelong$and$Bellarine$Peninsula$(TRU$Central$zone)$

$1,460$ $1,245$ $215$

^$Average$annual$bill$based$on$the$three$incumbents’$standing$offers$*$Average$annual$bill$based$on$the$four$single$fuel$retailers’$market$offers$post$discounts/pay$on$time$discount$(dual$fuel$offers$not$included)$****************************

51

5.1*Inner*city,*inner*North*and*Eastern*suburbs**

*Source:$Citipower$

$$

• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$Melbourne$ (CBD),$ Brunswick,$ Carlton,$ Fitzroy,$ Northcote,$ Richmond$ and$Collingwood$will$typically$pay$$2,425$in$energy$costs$this$year.73$$Households$on$the$standing$offer,$however,$will$typically$pay$$2,995.74$$$

• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$the$ inner$ Eastern$ suburbs$ of$ Kew,$Hawthorn,$ Camberwell$ and$Balwyn,$ and$the$ inner$ South$ East$ areas$ of$ South$ Yarra,$ Prahran,$ Armadale,$ Toorak$ and$Caulfield,$will$typically$pay$$2,410$in$energy$costs$this$year.75$Households$on$the$standing$offer,$however,$will$typically$pay$$2,900.76$$

$• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$

the$ inner$city$bay$side$suburbs$of$St$Kilda,$Port$Melbourne,$Albert$Park$and$

73$These$are$households$in$Citipower’s$electricity$distribution$network$and$Envestra’s$TRU$East$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$$74$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$Energy$Australia’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$75$These$are$households$in$Citipower’s$electricity$distribution$network$and$Multinet’s$Origin$Metro$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$76$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

52

South$ Melbourne$ will$ typically$ pay$ $2,390$ in$ energy$ costs$ this$ year.77$Households$on$the$standing$offer,$however,$will$typically$pay$$2,880.78$$

*5.2*Inner*West*and*North*Western*Suburbs**

*Source:$Essential$Services$Commission$*$

• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$Footscray,$ Yarraville,$ Williamstown,$ Flemington,$ Moonee$ Ponds,$Broadmeadows,$Coolaroo,$Braybrook$and$Sydenham$will$typically$pay$$2,655$in$energy$costs$ this$ year.79$Households$on$ the$ standing$offer,$however,$will$typically$pay$$3,220.80$$


Heidelberg,$ Fairfield,$ Ivanhoe,$ Bundoora,$ Thomastown,$ Preston,$ Reservoir$

77$These$are$households$in$Citipower’s$electricity$distribution$network$and$Multinet’s$AGL$South$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$78$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$AGL’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$79$These$are$households$in$Jemena’s$electricity$distribution$network$and$SP$Ausnet’s$AGL$North$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$$80$Bill$calculations$based$on$AGL’s$electricity$standing$offer$and$AGL’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

53

will$ typically$ pay$ $2,630$ in$ energy$ costs$ this$ year.81$ Households$ on$ the$standing$offer,$however,$will$typically$pay$$3,290.82$$

**5.3*South*Eastern*suburbs*and*Mornington*Peninsula**

*Source:$Essential$Services$Commission$*$

• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$the$ bayside$ suburbs$ of$ Elwood,$ Elsternwick,$ Brighton,$ Sandringham,$Beaumaris,$ Chelsea$ and$ South$ Eastern$ Suburbs$ of$ Bentleigh,$ Moorabbin,$Springvale,$Noble$Park,$Keysborough$will$typically$pay$$2,510$in$energy$costs$this$ year.83$ Households$ on$ the$ standing$ offer,$ however,$ will$ typically$ pay$$3,025.84$$$

81$These$are$households$in$Jemena’s$electricity$distribution$network$and$Envestra’s$TRU$East$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$$82$Bill$calculations$based$on$AGL’s$electricity$standing$offer$and$Energy$Australia’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$83$These$are$households$in$United$Energy’s$electricity$distribution$network$and$Multinet’s$AGL$South$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$84$Bill$calculations$based$on$AGL’s$electricity$standing$offer$and$AGL’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

54

• Market$offer$customers$with$an$average$consumption$of$electricity$and$gas$in$the$suburbs$of$Seaford$and$Frankston$and$on$the$Mornington$Peninsula$will$typically$pay$$2,565$ in$energy$costs$ this$year$ 85$Households$on$the$standing$offer,$however,$will$typically$pay$$3,120.86$$


the$Eastern$suburbs$of$Bulleen,$Templestowe,$Box$Hill,$Doncaster,$Mitcham,$Vermont,$ Glen$Waverly$ and$ Chadstone$ will$ typically$ pay$ $2,530$ in$ energy$costs$ this$ year.87$ Households$ on$ the$ standing$ offer,$ however,$ will$ typically$pay$$3,045.88$$

$5.4*Outer*Western*suburbs*and*Western*Victoria**

*Source:$Powercor$

$

85$These$are$households$in$United$Energy’s$electricity$distribution$network$and$Envestra’s$Origin$South$East$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$86$Bill$calculations$based$on$AGL’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$87$These$are$households$in$United$Energy’s$electricity$distribution$network$and$Multinet’s$Origin$Metro$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$88$Bill$calculations$based$on$AGL’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

55

The$ annual$ cost$ of$ electricity$ for$ all_electric$ households$ with$ an$ average$consumption$will$ typically$ be$ $1,720$ for$market$ offer$ customers.89$ $ Customers$ on$the$standing$offer,$however,$will$pay$$2,175.90$$$In$ the$ Western$ region,$ dual$ fuel$ households$ with$ an$ average$ consumption$ of$electricity$and$gas$will$typically$pay:$$

• $2,695$ if$ on$ market$ offers$ in$ Hoppers$ Crossing,$Werribee,$ Geelong$ region$and$on$the$Bellarine$peninsula.91$Households$on$the$standing$offer,$however,$will$typically$pay$$3,430.92$$

$• $2,620$ if$ on$ market$ offers$ in$ Macedon,$ Kyneton,$ Ballarat,$ Colac,$

Warrnambool,$ Portland,$ Hamilton,$ Horsham,$ Ararat$ and$ Daylesford.93$Households$on$the$standing$offer,$however,$will$typically$pay$$3,315.94$$

• $2,675$ if$ on$ market$ offers$ in$ Northern$ Victorian$ towns$ such$ as$ Echuca,$Shepparton$ and$ Heathcote.95$ Households$ on$ the$ standing$ offer,$ however,$will$typically$pay$$3,305.96$$$

$$$$$$$$$$$$

89$Bill$calculations$based$on$average$electricity$market$offer$including$discounts$and$pay$on$time$discounts$for$households$taking$controlled$load$off_peak$(annual$consumption$of$7000$kWh,$70%$peak$and$30%$off_peak).$90$Bill$calculations$based$on$Origin’s$electricity$standing$offer$(the$incumbent$in$this$area).$$91$These$are$households$in$Powercor’s$electricity$distribution$network$and$SP$Ausnet’s$TRU$Central$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$92$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$Energy$Australia’s$gas$standing$offer$(the$incumbents$in$these$two$areas).$$93$These$are$households$in$Powercor’s$electricity$distribution$network$and$SP$Ausnet’s$TRU$West$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$94$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$Energy$Australia’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$95$These$are$households$in$Powercor’s$electricity$distribution$network$and$Envestra’s$Origin$North$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$96$Bill$calculations$based$on$Origin’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

56

5.5*Outer*Northern*and*Eastern*suburbs*and*Eastern*Victoria**

*Source:$Essential$Services$Commission**The$ annual$ cost$ of$ electricity$ for$ all_electric$ households$ with$ an$ average$consumption$will$typically$be$$1,855$for$market$offer$customers.97$Customers$on$the$standing$offer,$however,$will$pay$$2,355.98$$$In$ the$ Eastern$ region,$ dual$ fuel$ households$ with$ an$ average$ consumption$ of$electricity$and$gas$will$typically$pay:$$

• $2,755$ if$ on$ market$ offers$ in$ the$ Outer$ Northern$ and$ Eastern$ suburbs$ of$Warrandyte,$ Ringwood,$ Chirnside$ Park$ and$ the$ area$ around$ Mount$Dandenong.99$Households$on$ the$ standing$offer,$however,$will$ typically$pay$$3,315.100$$$

• $2,800$ if$ on$ market$ offers$ in$ Kilmore,$ Seymour,$ Violet$ Town,$ Nagambie,$Wangaratta,$ Chiltern$ and$ Wodonga.101$ Households$ on$ the$ standing$ offer,$however,$will$typically$pay$$3,395.102$$

$

97$Bill$calculations$based$on$average$electricity$market$offer$including$discounts$and$pay$on$time$discounts$for$households$taking$controlled$load$off_peak$(annual$consumption$of$7000$kWh,$70%$peak$and$30%$off_peak).$98$Bill$calculations$based$on$Energy$Australia’s$electricity$standing$offer$(the$incumbent$in$this$area).$$99$These$are$households$in$SP$Ausnet’s$electricity$distribution$network$and$Multinet’s$Origin$Metro$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$100$Bill$calculations$based$on$Energy$Australia’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$101$These$are$households$in$SP$Ausnet’s$electricity$distribution$network$and$Envestra’s$Origin$North$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$102$Bill$calculations$based$on$Energy$Australia’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

57

• $2,790$ if$on$market$offers$ in$ the$La$Trobe$Valley$and$Sale$ in$ the$Gippsland$region.103$ Households$ on$ the$ standing$ offer,$ however,$ will$ typically$ pay$$3,390.104$$*

$

103$These$are$households$in$SP$Ausnet’s$electricity$distribution$network$and$Envestra’s$Origin$South$East$gas$zone.$Bill$calculations$based$on$average$electricity$and$gas$market$offers$including$discounts$and$pay$on$time$discounts.$Dual$fuel$gas$offers$are$not$included.$104$Bill$calculations$based$on$Energy$Australia’s$electricity$standing$offer$and$Origin’s$gas$standing$offer$(the$incumbents$in$these$two$areas)$$

Documents

Victorian Energy Prices 2015 Final Draft Report · 2015-07-07 · 4 Table*of*contents* * * Note*regarding*the*Repeal*of*the*carbon*tax*bill* 2* * * The*Victorian*Tariff?Tracking*Project*

Victorian Energy Prices 2015 Final Draft Report · 2015-07-07 · 4 Tableofcontents* * * NoteregardingtheRepealofthecarbontaxbill* 2* * * TheVictorianTariff?TrackingProject