Victorian households already struggling with rising cost of living pressures now need to budget extra dollars for their electricity bills, courtesy of new pricing coming into effect on January 1, 2012.

Electricity prices for Victorian households are expected to rise by at least 10% across the board, with some areas slugged more than others.

Ben Freund, CEO of leading price comparison website GoSwitch.com.au, expressed concern around the reasons for this increase.

“We really aren’t seeing any substantial justification for these price increases, with ‘network costs’ blamed once again. Wholesale electricity prices have been subdued compared to previous years; it’s almost as if it is simply becoming an annual ritual.

According to Freund, many households are not even aware that the changes are coming.

“Every Victorian household is now facing a substantial increase in the price of a basic necessity. Our concern is that many people don’t know about the price increases and will get a nasty shock when they receive their next bill and realise it is substantially more than they budgeted for.

“A big part of these price rises is also an increase to the supply charge, the cost of simply connecting. In some areas of Victoria this will mean an additional $100 of charges per year, which consumers simply cannot avoid.

“What households need to know is that there are two main ways you can rein in your electricity bill. The first is to make sure you pay the least amount per kilowatt you can, and the second is to try and use as few kilowatts as possible.

“One in three Victorian households continues to remain on the default plan for their area, which is often the most expensive. The average household could save up to $400 by switching to a cheaper plan at GoSwitch.com.au.

“Being smart with your energy usage can also have major impact. Simple changes like closing windows and curtains during the day, drying clothes on the line instead of using the clothes dryer and turning on the fan instead of the air conditioner are great ways to cut down your kilowatts over summer,” said Freund.

www.GoSwitch.com.au allows consumers to compare electricity and gas plans across retailers by typing in just a few details from their last energy bill. The website is free to use, and also details hundreds of simple energy saving tips households can use to reduce their usage this summer – including an easy to use GoSwitch Power Diet Plan.
To compare, switch and save on electricity and gas visit www.GoSwitch.com.au

-ends-

For further information, or to arrange an interview with Ben Freund please contact:
Paul Wickham, Boxing Clever Pty Ltd
P: 0412 398 489 E: pwickham@boxingclever.net.au

About GoSwitch.com.au
www.GoSwitch.com.au is Australia’s most popular price comparison website for electricity and gas. It allows households and businesses to conduct a customised search for the best energy provider for their needs, and to change plans free of charge. Unlike a broker, and some other so-called comparison services, GoSwitch.com.au is also impartial because every plan available in every area is listed in order of price, regardless of whether a retailer allows consumers to switch to them through GoSwitch.com.au or not. The volume of consumers who visit GoSwitch.com.au each month has also provided the bulk buying power for the company to have negotiated exclusive rates that are the cheapest available.

5 December 2011

VIC households to be hit with January 1 electricity price rise

Bills to increase by at least 10%
Victorian households already struggling with rising cost of living pressures now need to budget extra dollars for their electricity bills, courtesy of new pricing coming into effect on January 1, 2012.

Electricity prices for Victorian households are expected to rise by at least 10% across the board, with some areas slugged more than others.

Ben Freund, CEO of leading price comparison website GoSwitch.com.au, expressed concern around the reasons for this increase.

“We really aren’t seeing any substantial justification for these price increases, with ‘network costs’ blamed once again. Wholesale electricity prices have been subdued compared to previous years; it’s almost as if it is simply becoming an annual ritual.

According to Freund, many households are not even aware that the changes are coming.

“Every Victorian household is now facing a substantial increase in the price of a basic necessity. Our concern is that many people don’t know about the price increases and will get a nasty shock when they receive their next bill and realise it is substantially more than they budgeted for.

“A big part of these price rises is also an increase to the supply charge, the cost of simply connecting. In some areas of Victoria this will mean an additional $100 of charges per year, which consumers simply cannot avoid.

“What households need to know is that there are two main ways you can rein in your electricity bill. The first is to make sure you pay the least amount per kilowatt you can, and the second is to try and use as few kilowatts as possible.

“One in three Victorian households continues to remain on the default plan for their area, which is often the most expensive. The average household could save up to $400 by switching to a cheaper plan at GoSwitch.com.au.

“Being smart with your energy usage can also have major impact. Simple changes like closing windows and curtains during the day, drying clothes on the line instead of using the clothes dryer and turning on the fan instead of the air conditioner are great ways to cut down your kilowatts over summer,” said Freund.

www.GoSwitch.com.au allows consumers to compare electricity and gas plans across retailers by typing in just a few details from their last energy bill. The website is free to use, and also details hundreds of simple energy saving tips households can use to reduce their usage this summer – including an easy to use GoSwitch Power Diet Plan.

To compare, switch and save on electricity and gas visit www.GoSwitch.com.au

-ends-

For further information, or to arrange an interview with Ben Freund please contact:
Paul Wickham, Boxing Clever Pty Ltd
P: 0412 398 489 E: pwickham@boxingclever.net.au

About GoSwitch.com.au

www.GoSwitch.com.au is Australia’s most popular price comparison website for electricity and gas. It allows households and businesses to conduct a customised search for the best energy provider for their needs, and to change plans free of charge. Unlike a broker, and some other so-called comparison services, GoSwitch.com.au is also impartial because every plan available in every area is listed in order of price, regardless of whether a retailer allows consumers to switch to them through GoSwitch.com.au or not. The volume of consumers who visit GoSwitch.com.au each month has also provided the bulk buying power for the company to have negotiated exclusive rates that are the cheapest available.

There are two ways you can minimise your bill. The first is to make sure you pay the lowest price per kilowatt you can. The second is to use as few kilowatts as possible.
With this in mind, we have developed a simple 6-step ‘Power Diet’ to help you slim down your big fat bill this summer:

• Step 1 – Start off on the right foot: Make sure you are paying the least amount per kilowatt hour by comparing energy plans and switching to a cheaper deal through www.GoSwitch.com.au

• Step 2 – Make a plan: Look on your most recent bill for how many kilowatts you consumed and set yourself a goal for cutting down – your recommended kilowatt intake

• Step 3 – Watch your intake: Identify the power guzzlers in your home and moderate your consumption. We have developed a Power Pyramid, showing how some of the main household appliances compare. Some appliances are particularly energy intensive and should be thought of like fast food (the clothes dryer is a main offender here)

• Step 4 – Be active: Say no to standby mode and unplug appliances at the wall. As much as 20% of your bill can result from ‘energy leaks’ or appliances on standby mode

• Step 5 – Get the right gear: Get rid of your second fridge and your third television, and replace old appliances with ones that are more energy efficient

• Step 6 – Nature’s best: There are hundreds of ways you can switch off the power and take advantage of natural energy. A few tips for improving the energy efficiency of your home are included below, with any more listed in the Energy Saving Tips section of our website

The GoSwitch Household Power Guide

The two diagrams below show where the average Australian household consumes the most energy as well as which appliances are more power hungry than others. Use these diagrams in combination to determine the areas that you should focus on to achieve the best Power Diet result.

Power Pyramid – How Household Appliances Compare

Average Australian Household Energy Use

Download Power Diet Plan – PDF

* Sourced from: NSW Save Power Website (IPART Research Paper 29; November 2007: Residential energy and water use in Sydney, the Blue Mountains and Illawarra; Results from the 2006 household survey; Electricity, Gas and Water).

Too many Australians have learned the hard way that guzzling kilowatts can lead to heart attack – when their big fat electricity bill arrives that is. Now, Australia’s leading comparison service for electricity and gas has developed a “Power Diet Plan” to help Australians make informed decisions and trim down their energy use this summer.
Ben Freund, CEO of GoSwitch.com.au says: “The average household can save $400 a year by making sure they are paying the lowest price per kilowatt they can for electricity and a further $200 by economising on their energy use.

“Our website makes it easy to compare every plan in every area, but we know that many consumers are overwhelmed to the point of inaction by the sheer number of energy saving tips they receive.

“Our Power Diet Plan is all about helping people get their kilowatts under control by focussing on targeting the power guzzlers in their homes, in combination with ongoing kilowatt monitoring.

The Plan involves 6 easy-to-follow steps and two simple diagrams that can be printed off from the GoSwitch website and kept in sight around the home, as a gentle reminder of where the average household consumes the most energy and how appliances compare in their energy use.

“As prices continue rising, controlling your kilowatt intake becomes increasingly more important. By making a few small but smart changes, most households can reduce their kilowatt consumption by 10-20%, offsetting price increases expected for most regions of Australia next year”, he said.

For further information, or to arrange an interview with Ben Freund please contact: Paul Wickham, Boxing Clever Pty Ltd P: 0412 398 489 E: pwickham@boxingclever.net.au

About GoSwitch.com.au
www.GoSwitch.com.au is Australia’s most popular price comparison website for electricity and gas. It allows households and businesses to conduct a customised search for the best energy provider for their needs, and to change plans free of charge. Unlike a broker, and some other so-called comparison services, GoSwitch.com.au is also impartial because every plan available in every area is listed in order of price, regardless of whether a retailer allows consumers to switch to them through GoSwitch.com.au or not. The volume of consumers who visit GoSwitch.com.au each month has also provided the bulk buying power for the company to have negotiated exclusive rates that are the cheapest available.

Most Australians can save a significant amount on their electricity bills just by switching to a cheaper energy plan. The amount you save will depend on the area in which you live.

On average, GoSwitch customers save hundreds of dollars on their energy bills each year, simply by making the switch.

Does switching affect my power supply?

Not at all – your power supply is the same regardless of who you buy it from. When you switch to a different electricity provider, the only thing that changes is the company name on your bill and the amount you pay.

What is the “default electricity rate”?

The default electricity rate is the amount you automatically pay for electricity if you have not investigated other options. If you haven’t compared electricity providers and switched to the cheapest plan available, you are on a default plan – usually the highest possible rate.

Around 50 per cent of Australian households are currently on their gas or electricity supplier’s standard default plan.

Does switching cost me money?

If you switch with an independent provider like GoSwitch, it does not cost you any money to compare and switch providers. It is important to note that if you are under contract when changing providers, an early termination fee may apply; this fee is usually well-and-truly offset by the ongoing savings on your bill.

What is the difference between an electricity distributor and an electricity retailer?

Electricity distributors are responsible for delivering your electricity supply and maintaining network infrastructure.

Energy retailers are responsible for connecting your energy, and deciding how much you pay for it.

While your electricity distributor is fixed according to region, your energy retailer is not. You have the right to choose – both your electricity retailer and the energy plan that suits you. Switching electricity retailers has no impact on your actual supply, only the amount on your bill.

What does the deregulation of the electricity market mean for me?

Deregulation of the electricity market has been implemented in most Australia states over the last few decades, which simply means that most consumers are now able to choose which company they buy electricity from.

By comparing different energy companies and taking advantage of competitive rates, you can save hundreds of dollars a year on your electricity bills.

I am moving house; should I switch?

Moving house is the ideal time to make sure you are on the best possible rate from the cheapest electricity supplier.

GoSwitch can help you find the best electricity deal at your new address and even arrange your new connection.

Why should I switch with GoSwitch?

GoSwitch.com.au is Australia’s leading comparison site for electricity and gas. Our energy comparison service is impartial, free and quick; we can even arrange the switch for you.

The data we use is comprehensive and accurate. It comes straight from the energy retailers and government regulators and is updated continually.

How does GoSwitch make money?

We are funded by the small commissions we receive from the energy companies when customers choose to switch online. We provide information on all energy retailers – not just the ones that give us commission. Our commercial relationships have no impact on the ranking of retailers in the GoSwitch calculators.

Accroding to Energy Minister Michael O’Brien, the premium rate of 60 cents per kilowatt hour will be cut to 25 cents from January 1 next year.

The new rate will apply for people with panels who have not submitted the required paperwork and reached a contract agreement by September 30.

Households already receiving the 60-cent rate will be unaffected.

The new 25-cent scheme is currently under review by the Victorian Competition and Efficiency Commission.

Mr O’Brien said the new scheme would be a “fair and reasonable” incentive for households to install solar systems.

“Unlike many other states, which have closed down all feed-in tariff schemes, Victoria’s will provide a fairer, more sustainable approach which reduces the boom/bust cycle for the industry,” he said.

The solar industry and environment groups have criticised the new scheme, with solar businesses stating that a solar feed-in-tariff of at least 40 cents was needed to ensure the continued growth of the industry.

Environment Victoria campaigns director Mark Wakeham suggested the government had broken an election promise by reducing the solar tariff without consultation, just days after introducing the country’s most restrictive laws for wind farms.

“This announcement caps off a disastrous week for renewable energy in Victoria. It appears that the only plan the Coalition has on climate change is to ensure Victoria misses out on the clean energy investment boom,” Mr Wakeham said.

The review of feed-in-tariffs is expected to report in the second half of 2012.

The energy supply process is complex and there are numerous energy companies competing for business; it can difficult for consumers to work out exactly what they need to do to make sure they are getting the best deal.

Before energy reaches your home or business, it must be generated, transmitted, distributed and sold. The energy companies responsible for generating, transmitting or distributing your electricity supple have fixed according to where you live, and have no direct impact of the amount you pay.

Energy retailers, on the other hand, are quite separate from energy generators and distributors. Energy retailers are responsible for connecting electricity to your home or business and deciding how much you pay for it.

In most Australian states there are a number of energy retailers operating in any given area, each battling it out to offer the most competitive rates and win the most customers.

If you haven’t gone through the process of comparing your current energy retailer and plan against the competition, it is very likely that you are paying the highest rate. The actual supply of electricity to your house is not affected if you end up switching to another retailer, just the price!

Switching energy retailers is fast, simple, costs you nothing and – best of all – could save you hundreds of dollars on bills each year. GoSwitch, Australia’s leading impartial energy comparison site, will do all the work for you in just a few minutes.

Revenue from gas and electricity supply to households and businesses is tightly controlled by government regulation; in South Australia, rules around revenue date back to the deregulation of the National Electricity Market in the 1990s.

Today, electricity companies are permitted to recover costs – such as upgrade and replacement of infrastructure – through increases in consumer bills.

According to consumer groups, these rules are unable to stop unnecessary infrastructure works that are pushed by utility companies to allow them to recoup costs.

South Australian energy minister Michael O’Brien reportedly agrees, stating last month that some energy companies had been “manipulating the system”.

Independent industry expert, UBS utilities analyst David Leitch disagrees, saying that industry rules should allow companies to make reasonable returns on investment on networks.

“Before these recent price increases, there was a lot of discussion that there had been under-investment in the networks for a number of years,” Mr Leitch said.

“I would rather have a little bit of over-investment than under-investment, be a little generous to the shareholders rather than have under-investment and have the lights go out. These networks were built, often in the 1960s and 1970s.”

The energy companies involved also strongly dispute these claims and are resisting any changes to the rules.

Gas distributor Envestra has stated: “This debate tends to ignore the main factors driving recent increases in energy prices, being the accepted need to replace ageing infrastructure, to address increases in the cost of capital faced by all businesses post the GFC and to pay for various government impositions,” managing director Ian Little said.

ETSA Utilities spokesman Paul Roberts said Mr O’Brien was wrong to suggest manipulation of the rules, and that any new projects were independently tested and adhered to the Australian Energy Regulator’s demands for cost-effectiveness.

“We absolutely reject any suggestion of us bending the law or undertaking unauthorised works. This is not how we operate,” Mr Roberts said.

According to energy efficiency specialist Paul Myors, consumption has fallen by around 2 per cent a year for average household electricity use over the past four years.

”It could be the global financial crisis – and rising tariffs is a factor. We are seeing the impact of energy efficiency,” Mr Myors said.

The drop in consumption – which goes against the long-term trend of a steady rise – is expected to lead the Australian Electricity Market Operator to predict overall cuts of 5 to 6 per cent in demand in the next decade.

The fall will also increase pressure on the government to cut back capital spending by state-owned electricity companies.

Electricity prices rose by up to 13 per cent on July 1 to fund spending on the electricity system amid criticism that government-owned companies are investing unnecessarily.

Household electricity prices are will continue to rise over the next several years.

The decrease in demand forecasts is predicted to delay the need for new large-scale power stations in NSW until the end of the decade.

Other states, such as Victoria, South Australia and Queensland, are expected to need new baseload capacity as soon as 2013-2014.

The new forecasts, released in AEMO’s Statement of Opportunities, bring forward the need for new generation capacity in the two states by 12 months to 2014-15.

The accelerated timeline is reportedly due to continued higher than expected demand.

Victoria will need a further 96MW by 2014-15 and South Australia will need another 46MW.

Queensland will also need more power stations in the national electricity market (NEM) due to stonger demand from the resource sector, with new coalmine developments and export liquefied natural gas projects.

It is estimated that Queensland will need 341 megawatts of new baseload capacity by 2013-14 based on steady economic growth; faster growth would bring this forward to 2012-13.

According to AEMO managing director Matt Zema, the national electricity market is still growing at roughly 1000MW per year.

”We still need investment in generation in all the regions, at different times,” he said.

”Queensland is first cab off the rank at 2013-14, then Victoria/South Australia in 2014-15 and then New South Wales 2018-19.

”Demand is still growing in most of the regions. Queensland is growing a lot faster than the rest and that’s basically driven by both the mining and LNG [sectors].”

Western Australia and the Northern Territory are not in the NEM, as they are not connected to the grid linking the eastern states.