Residential and Small and Medium Sized Enterprises (SME) - Q & A
Why are electricity prices increasing?
There are two reasons why prices will rise for all New South Wales customers:
1. Increased network charges
Electricity retailers pay for the use of network services to transport electricity to their customers, and pass this cost on to customers as part of their electricity bill.
These network charges, which are set and reviewed annually by the Australian Energy Regulator (AER), will increase from 1 July 2011. The AER has approved increases in capital investment in the Endeavour Energy Network region to:
- build new substations and feeders (wires) to cope with the rapid growth in new homes and businesses and the uptake of air-conditioning
- replace ageing ‘baby boomer’ assets (built in the 1950-60s) before reliability becomes a problem for customers; and
- meet new licence conditions set by the New South Wales Government for improved reliability.
2. Increased retail costs
Average prices across NSW will now increase by 17.3% on 1 July 2011 (including inflation)*.
*IPART Changes in regulated electricity retail prices from 1 July 2011 (Electricity - Final Report June 2011) www.ipart.nsw.gov.au 22/06/2011 page 9.
The retail costs also include pass through costs associated with funding the Federal Government’s Renewable Energy Target (RET) Scheme. This scheme is to fund renewable energy initiatives.
The objective of the scheme is to;
- Encourage additional generation of electricity from renewable energy sources
- Reduce emissions of greenhouse gases in the electricity sector
- Ensure renewable energy sources are ecologically sustainable.
Will I be able to see the charges associated with the Renewable Energy Target (RET) Scheme on my bill?
This cost will be incorporated into your retail charges, and will not be a separate line item on your bill.
What happened to the Carbon Pollution Reduction Scheme (CPRS)?
The Federal Government announced^ in April 2010 that it would delay the implementation of the Carbon Pollution Reduction Scheme (CPRS). Then in February 2011, it announced a framework for a carbon price mechanism. It proposes that this will start with a fixed price period on 1 July 2012 for 3 to 5 years then transition to an emissions trading scheme.
^Media release - Minister for Climate Change and Energy Efficiency, climate change framework announced, 24 February 2011.
Who sets prices?
The Australian Energy Regulator (AER) sets prices for the network charges for a customer’s bill.
The Independent Pricing and Regulatory Tribunal (IPART) sets regulated prices for residential and small business customers in New South Wales.
The regulated retail prices set by IPART include the network charges as approved by the AER for the Endeavour Energy, Essential Energy and Ausgrid electricity supply networks.
More information can be found on
www.ipart.nsw.gov.au and www.aer.gov.au
Will prices continue to increase?
Regulated retail prices are reviewed by the Independent Pricing and Regulatory Tribunal (IPART) every 12 months with approved prices implemented on 1 July each year. Network charges are subject to annual regulatory review by the Australian Energy Regulator (AER), with approved prices also implemented on 1 July.
How much will my bill go up on 1st July 2011?
Increases will vary depending on your local electricity supply network and can be seen below;
Endeavour Energy (previously Integral Energy Network area)
The average residential customer consuming 7,000 kilowatt hours of electricity per year, the regulated domestic electricity rate has increased by about 15.5% or approximately $216.00 per year.
Ausgrid (previously Energy Australia Network area)
The average residential customer consuming 7,000 kilowatt hours of electricity per year, the regulated domestic electricity rate has increased by about 17.9% or approximately $230.00 per year.
Essential Energy (previously Country Energy Network area)
The average residential customer consuming 7,000 kilowatt hours of electricity per year, the regulated domestic electricity rate has increased by about 18.1% or approximately $316.00 per year.
You may wish to visit www.ipart.nsw.gov.au for more information or for a copy of Ausgrid’s and Essential Energy’s Energy Price guides.
How will the new rate appear on my bill?
If your billing cycle means that your bill incorporates usage before and after 1 July, then your next bill will show the new charges relating to post-1 July pricing as they will appear under the heading ‘New rate period’ for each of your tariffs.
How will Integral read my meter before and after 1 July?
Meters are read throughout the year according to a tightly-planned schedule so it is not practical or feasible to read hundreds of thousands of meters on 30 June or 1 July.
For this reason, and in accordance with the Energy Supply Regulation 2001, we will pro-rata customer consumption to take the rate increase into account. For example, if your account is for a 90 day period ending 31 July 2011, you will be billed for 59 days (3 May 2011 to 30 June 2011) at the old rate and for 31 days (1 July 2011 to 31 July 2011) at the new rate.
Do I have to do anything if I am on direct debit?
No, your new amount will automatically be debited from your bank account on the nominated date.
I signed a contract so why is the price increasing?
We are careful to make all important information available when a Negotiated Supply Agreement is being considered. The information on rate changes is also in the Terms and Conditions booklet that was given to you before you signed with us on page 52 under Frequently Asked Questions and outlined in Conditions 7 and 8 on pages 14 and 17.
How much will prices go up on 1st July 2012?
It is difficult for IPART to estimate what the price increases on 1 July 2012 will be because the Federal Government has announced that it will introduce a carbon price on this date, but has not set the level of the carbon price. Therefore, IPART have not included any carbon price in their estimates for 2012/13. Including a carbon price will add to the price increases. IPARTS estimates of the 1 July 2012 price changes (without a carbon price) remain consistent with the estimates they made in March last year;
INpower is just one of several assistance options. For more information ask for a copy of ‘We’re here to help’ leaflet. Through the INpower program, we will tailor a solution that best suits your needs.
If you are using more electricity than you can afford, one of our energy experts can visit your home to conduct an energy audit. The energy expert will point out simple and inexpensive ways of reducing the amount of energy used.
For energy saving tips visit www.energyinstitute.com.au
What is the NSW Government doing to help people deal with electricity bills?
The NSW Government understands some people will find energy price rises difficult to meet and has a range of programs to help eligible customers stay connected to these essential services. These include the:
- Low Income Household Rebate (previously called Energy Rebate) from 01 July 2011 will be $200 a year. This rebate is available for people holding pensioner concession cards issued by Centrelink and the Department of Veterans Affairs or certain Health Care cards
- Medical Energy Rebate ($200 from 1 July 2011) is for eligible customers who are medically diagnosed with an inability to self-regulate body temperature
- Life Support Rebate (rates vary depending on the type of machine) which entitles people with certain items of medical equipment set up in their homes to an Energy Rebate
- Energy Accounts Payment Assistance (EAPA) vouchers (available from community welfare organisations)
- Home Power Savings Program
- Retailer Hardship Policies and Payment Plans
- Save Power website at www.savepower.nsw.gov.au which has a wealth of practical energy saving tips and information; and
- Centrepay is available to customers receiving payments from Centrelink and prevents large energy bills by making regular instalments.
More information on these programs can be found on the New South Wales Department of Trade and Investment, Regional Infrastructure and Services Government Industry and Investment website at www.dtirs.nsw.gov.au
I don’t like these prices changes – who can I write to?
If you would like to make a formal complaint, please write to our Customer Care team detailing what aspects of the changes you are concerned with and we’ll respond to you either in writing or by phone. Please address your letter to Customer Care, Integral Energy, PO Box 6366, Blacktown, NSW 2148. You can send a fax to Customer Care via (02) 9853 5184 or email the team at: integral@integral.com.au
