I believe that one of the biggest burdens with the cost of energy, particularly electricity is the connection charge. This comes under a variety of names, but is a fixed charge for the privilege of being connected to the electricity supply. Every “customer” pays a fixed rate for this privilege, no matter what their usage is, there is no reward for being energy efficient!
My “supply charge” with ACTEW/AGL (ACT) is $0.975+GST for each day, or almost $100 a quarter. Everyone on the same contract will pay the same charge no matter how much electricity is used in that quarter.
The _connection charge is raised for the network owner to construct and maintain the “poles and wires”, plus all the associated infrastructure. The level of expenditure by the network owner is affected by the electricity demand, the higher the demand will mean the need for new infrastructure or more maintenance on existing infrastructure.
If I cause less demand for electricity due to my energy efficiency, I am not creating the need for construction or maintenance beyond the routine. However, if my neighbour is not energy efficient, they constantly run their heating/cooling, have poor insulation etc, they will create a need for construction and maintenance. So, my neighbour is creating increase costs for the network owner, but I am paying just as much as they are, this means I am subsidising my big power using neighbour!
- Actually, if you use zero power, you will still pay the same charge!
I believe the connection charge should be on a progressive scale, so the higher the usage the higher the rate. This will reward people who make an effort to increase their efficiency and reduce electricity consumption while giving high electricity users even more incentive to reduce their consumption.
This may appear unfair to people on low income or renters who either do not have the resources or the capacity to control their energy usage. However, if enough people improve their efficiency and install PV cells and batteries the electricity demand will fall so there is less need for the network owners to do construction and maintenance! So, they will be able to drop their charges for everyone? OK, I am probably being a bit naive there, but something does need to be done about network charges