Queensland Electricity Tariffs

I have found out, purely by chance that from 1 July consumers in SE Queensland are going to be subject to a ‘demand tariff’ which, in most cases will cause a significant increase in their bills. Evidently this type of scheme is already operating in Victoria and SA - and possibly other states also - but Energex appear likely to be applying it via the retailers in a much less equitable fashion and in great secrecy. It applies already to anyone who recently changed from an old spinning disc electricity meter to a smart meter but from 1 July everyone with a smart meter will be swapped over.

Briefly, what happens is that between the hours of 4pm and 9pm the smart meter will find the half-hour period in the month when your power demand in kilowatt hours was at its highest. This figure will then get multiplied by 2 to give an average usage in kilowatts over that 30-minute period, A surcharge then gets applied for every single day of that month whereby that average kilowatt demand figure is multiplied by the demand tariff - which is round about 26 cents/kW/day. This impost is recalculated each month based on the month’s historical usage. In partial compensation, the normal electricity tariff is reduced by about 1/4, but my calculations suggest that the average household will still be significantly worse off.
Two things trouble me. Firstly, this complicated charging system is being introduced without any publicity. The second, and more concerning, aspect is that in SE Queensland the 30-minute peak demand will be monitored 365 days a year. It appears that in other states, the demand peak is monitored only Monday to Friday except public holidays, so people aren’t in danger of being penalised for heavier usage on days when commercial demand is low anyway. Furthermore, in the case of small businesses the peak demand won’t be monitored on weekends and public holidays, which is fair enough, so if I owned a bar or restaurant where Saturday was my busiest period, my peak electricity demand wouldn’t count against me. The whole thing stinks.

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Could you supply links to where this information can be found? Also is this for the Energex supplied areas, the Ergon areas or both?

I see there is a consultation taking place by the Qld Competition Authority but the paper does not suggest from what I have read that Demand tariff will be the only offer. I have also found some information in regards to Ergon making some business tariffs obsolete and that there are some demand tariffs that may be used. That is for the non SEQ regions eg Rural areas.

It currently appears that in SEQ Residential tariffs will continue to offer flat rate (tariff 11), Time of Use tariff and an option of Demand tariff.

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@grahroll
The main source document is this tariff guide from Energex: https://www.energex.com.au/__data/assets/pdf_file/0008/850382/EGX-Network-Tariff-Guide-2020-21.pdf . The most relevant tariffs described there are 3900 - Residential Transitional Demand and 3700 - Residential Demand.

Much of the document’s 36 pages isn’t relevant to the current discussion, but a friend who has been working with me on this little project has kindly distilled the relevant bits as follows:
Page 8 Table 4 Reassignment of existing SAC customers after meter change. This one is very close to home. My daughter had solar panels installed at her home six weeks ago, and that required replacement of the old spinning disc meter with a new smart meter. She recently phoned her retailer (Alinta) only to discover that she’s now on the 3900 demand tariff. There was no prior notification from the retailer.
Page 11 Demand charge - definition
Page 14 Table 6 Charging timeframes - see Residential Transitional Demand (3900) & Residential Demand (3700). This confirms that, unlike in at least some other states, Energex customers will be assessed even on low demand days such as weekends and public holidays. It also confirms that for small businesses the demand tariffs will apply only on weekdays.

Pages 15/16 Table 7 Default tariffs - see Residential Transitional Demand (Tariff code: 3900) . It indicates that pretty well every residential customer with a smart meter will get swapped over to the new tariff code 3900 from 1 July 2021 - assuming they aren’t on it already. There’s no mention of Tariff 11 being available as an option.

As mentioned, my two main concerns are the apparent secrecy with which these changes are being introduced and the fact that residential customers’ demand is being assessed even during days of low network demand. As an example of this consider an elderly empty-nester couple who have their family come to stay with them over the Christmas holiday break. Conceivably they could be running air conditioning, oven, cooktop, clothes dryer and pool filter simultaneously while their guests are staying. The demand penalty would be horrendous and would apply for an entire month, long after the guests had departed.

There’s a further aspect. In another Energex document, at https://www.aer.gov.au/system/files/Energex%20-%20Indicative%20Final%20Tariff%20Structure%20Statement%202020-25%20-%20AER%20edits%20(marked%20up)%20-%20May%202020.pdf mention is made of what in effect are the tariff rates 3700 and 3900. “The two demand tariffs both have the same structure with a non-seasonal peak window between 4pm and 9pm proposed to apply every day for residential customers and week days for small business customers. The tariffs will differ in terms of the rates, with the transitional demand tariff having a much lower demand charge which will allow the price impact for customers assigned to these tariffs to be managed.” In other words, if we think the demand tariffs are high now, we ain’t seen nothing yet.

Finally, regarding your question about Ergon Energy’s supply to rural customers, I haven’t spent a lot of time on this. There is a document with their pricing proposals at: https://www.ergon.com.au/__data/assets/pdf_file/0005/836726/ERG-2020-21-Pricing-Proposal-Final.pdf . Tariff Class SAC in Appendix A on page 45 seems to indicate that the demand structure is on an opt-in basis for all but new customers. As with Energex, it applies to residential customers every day of the year and to business customers on weekdays only.

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Thank you for those links. I agree it is sneaky and even the information they provide appears difficult to interpret.

From that document if the Retailer does not declare the tariff for the the customer only then will the customer be put on the demand tariff. “If a retailer does not specify its preferred network tariff for a new customer, Energex will assign the customer to the default”. So that seems for your daughter it was a problem with the retailer just accepting the Demand tariff not Energex.

They can be reassigned to another tariff if the Retailer advises Energex of the tariff type. There are currently three main tariffs types available for a Residential Customer and these are Fixed (8400), Time of Use (ToU 6900) and Demand (3900 & 3700). When I set up my electricity plan this year with my retailer I did select the tariff I wanted to use. For the period 1 July 2021 to 1 July 2024 if not already on a Demand tariff, yes they will be swapped to one on the 1st of July 2021. However there is still the availability of a ToU tariff after this period (Tariff 6900) from what I can read.

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Business have been subject to the demand tariff for years, at least in NSW (don’t know about other states).
If you have low general consumption, but short high peak loads, it’s going to cost a fair bit, depending on they have set up the rates, and this creates a situation where having a battery can actually save money in some circumstances, by avoiding any high peaks. Solar can also help out, but you’ll still get caught out by high peak usage in overcast weather or night time usage.

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For Ergon area customers the QCA has already issued it’s draft determination for pricing for 2021-22. There is provision for additional or new tariff codes to replace some old codes. Tariff 11, 31, 33 and the existing tariff system appears to remain in tact.

I’ve very recently renegotiated one supply contract in SE Qld (Brisbane) after obtaining alternate offers from AGL fixed for 24months and Origin for 12 months.

There was no mention or offer of any alternate and new metering and tariff arrangement based on peak demand. We already have Smart Meters.

Importantly there is also no hint of major changes in the assessment of electricity billing for SE Qld - Energex network from Canstar Blue 01Aprl21.

In respect of the documents referenced by @kortravel99, there are very similar documents from a year past from Energex dated 2020-21 and also assessments by the QCA. Are we misinterpreting something in all of this discussion?

A simple email or call to Energex might be all that is required to clarify further.

It would be informative to see how and where this explanation is derived.

26c/kWh is around the average tariff 11 consumption charge for SE Qld. It’s what users on a standard flat rate agreement pay for their usage.

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@mark_m @grahroll @gordon

My thanks to everyone who replied. Firstly to take the final point which @mark_m raises, that 26 cents figure isn’t the actual tariff. It is additional to whatever tariff is being charged, and is a daily impost which can be expressed variously as $/kW/month or $/kW/day.

With all due respect, I still believe that by default everyone with a smart meter who isn’t already on a demand tariff will automatically get changed over to one. There may be a mechanism for someone to choose to remain on the old demand tariff, but that certainly isn’t clear. In any case consumer apathy would suggest to me that most people will simply go with the flow. Page 7 of the first document I cited states very clearly:

SAC customers with consumption below 100 MWh with a smart meter
Existing residential and small business customers that already have their smart meter installed prior
to 1 July 2020 may remain on the legacy flat tariffs until 1 July 2021.
On 1 July 2021 these customers will be reassigned to the applicable Residential or Small Business
Transitional Demand tariff, unless their retailers have already voluntarily requested reassignment to a
demand or time-of use network tariff prior to 1 July 2021.

I don’t see much wriggle room there.

Finally, I do agree that it could be advantageous to have a battery, especially if it’s possible to get it wired in such a way that it delivers power only between 4pm and 9pm.

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The document is referring to the ‘Network Charges’ per customer, Energex charges the retailer to supply a customer.

Is there wriggle room? Even for 2020-21 the year nearly all gone, Energex says.

As Energex suggests, ‘Talk to your retailer’. What’s changed?

For those interested in what Energex is communicating more broadly. Although residential consumers in SE Qld - DO NOT - deal directly with Energex. We must talk to our retailer.
https://www.energex.com.au/home/our-services/pricing-And-tariffs

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CHOICE might undertake an investigation of the looming changes to the Qld Electricity market and offer their take on it all?

One perhaps that @BrendanMays @jhook or @jzarate would pass on to the investigation team?

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As you may gather, I’d really like to see that happen as I sincerely believe there’s a major consumer issue involved. Significant changes are taking place, but it all seems to be happening without the public being informed.

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Thanks for raising the issue @kortravel99, I will pass it on to my colleagues looking at energy issues :+1:

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About time for this kind of tariff. Smart meters have made it possible. The fairest thing for everyone is for consumers to pay for the demand they put on the network.

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Yes, @mnd, that’s fair enough and I’m in total agreement with you. It’s the implementation which I’m criticising.
Firstly it’s an unnecessarily complicated scheme which many people will struggle to understand and I’d really like someone to explain to me anyway why it’s preferable to having simple time of day tariffs. As I pointed out already it’s going to lead to some high and inadvertent penalties.
Secondly, why the secrecy if it’s such a fair and reasonable system?
And finally, I believe that the parameters are unfair. 4pm to 9pm goes well beyond the peak times when generating capacity may be under strain. Also, small businesses are to be assessed only Monday to Friday, which I totally support. Why can’t the same thing apply for households?

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This may be of some interest albeit was MAR & the focus is VIC but does have a key takeaway in this context.
Whether it will still apply for QLD post these changes could also be …?


“If you are on any tariff you don’t want, anywhere in Australia; you are free to change if you are in an area with retailer choice.”

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I remain unconvinced anything is going to change for residential customers.

  1. Single rate tariffs are the norm in Qld.
  2. Multi metered single rate tariffs for controlled loads are common.
  3. ToU tariffs (time of use) are offered as an alternative.
  4. Demand based tariffs have only been applied or an option in Qld to retail/commercial and industrial users. (Experience as a customer in both areas.)
  5. Agricultural users have had access in specific examples to a flat/fixed price service for unmetered connections.

If I could reduce the discussion to a single question:

Are Queensland residential electricity customers being offered a retail electricity plan that is not billed for true consumption, and if so is this type of plan going to be mandatory?

I was not offered any such plan last month by AGL or Origin, solar included. The comparison sites did not offer one.

All I can see for now is some confusion over how the term demand is being interpreted in respect of residential billing.

P.S. as of Dec 2020.

Note: all of the 271 residential plans offered in Qld are either Single Rate or TOU. There is no mention of demand metering.
https://www.energymadeeasy.gov.au/results

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Note re Demand Charges.

One explanation,

For Qld Canstar mentioned last year a demand tariff 14 and a Smart Control tariff 35 as available. I’ve yet to see an offer or plan that shows this option.

The demand charge is an added charge in addition to being charged for actual power consumed, (penalty). It’s additional to, and not in place of the standard charges. As explained previously by @kortravel99 it is based on a customers greatest rate of power usage in any 30 minute period of a month. EG Turning the pool pump, and all the aircons on at the same time of the evening will maximise the penalty, due to the large extra demand seen in that half hour. Also using the 15A Mig Welder or lathe in the shed at the same time will have a similar effect.

Current residential single rate billing applies in comparison an average cost of power for the whole day.

Demand based billing assumes a lower base tariff or cost for the electricity actually used. It offers similar benefits to a ToU tariff to consumers who can avoid high consumption in the evening or peak demand time slots.

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You won’t find Demand tariff plans on EnergyMadeEasy The EnergyMadeEasy web site lists suppliers based on estimated annual cost, but only non-Demand plans are listed. This makes sense as there’s no way that the demand can be costed as it’s a future unknowable parameter.

To find a Demand plan, you need to enter a retailer’s web site (eg agl.com.au) and proceed from there. Having selected a suitable Demand plan, if available, you are then led to the EnergyMadeEasy page for details of that plan. Of course, the page includes the warning: This plan includes demand charges. We are unable to provide an estimate. However, for SEQ (the Energex zone), Demand charge plans can be found for only three major retailers: Alinta, AGL, and Red Energy. Oddly, Origin does not offer such a plan.

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@nunk69
All of what you’re saying is correct. If I’m interpreting the previously quoted Energex document correctly demand tariffs will be the default from 1 July. Presumably all those other retailers will be offering demand tariffs by then.
I don’t know what the story is with those other retailers who aren’t listing demand tariffs now if a customer of theirs gets swapped to a new smart meter. According to Energex the customer automatically gets put on a demand tariff.

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Welcome to the community @nunk69.

The first step is easy enough. It took a bit of effort to crack the system. The default with AGL simply kept on throwing up a 3 plan options, a standard flat rate, a variable rate, and solar savers option complete with costings, based on my post code. I have AGL as a supplier and user their App for billing. No need to say anymore on that. Eventually I found a solution to look at plans based on a different post code. It takes multiple steps and a couple of drop downs to get there. It’s obvious after the fact?

It still takes you in the end to the Energy Made Easy web pages, but with the selected AGL Demand plan selected displayed! At first I thought it was a no go being thrown out to the Gov web page with a blank Post Code box to fill in. The same info as provided 3 screens earlier to find the relevant AGL plan. You can only see one plan at a time, and not side by side in this mode. It’s clunky, almost as if it is not meant to be found.

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It may depend on which version and year issue of the document that is accessed. I think this is the current version.

Page 32 is the most enlightening. The change over has a deferral option. One would expect any new customer or upgrading customer (from 01 July 2020) would have been advised of this by their retailer at the time?

The Ergon area customers in Qld have their supply agreements regulated by the QCA - Qld Competition Authority. The draft review in progress includes the old tariff structures, is in progress.

I read elsewhere that Energex is saying it is not responsible for notifying customers of any changes to the wholesale metering agreements between Energex and the Retailers. It’s up to the Retailer to advise the customer.

Is this, reading from the introduction Energex being sneaky, or is it the NER (National Energy Rules) and AEMC on a mission? The introduction to the TSS document produced by Energex says there has been engagement with customers over the changes required by the NER.

There is still something missing, if all these upcoming changes are inevitable, to not have a little more visibility in the public eye. Especially since nearly all those as you suggest initially could be affected have limited means of monitoring usage in real time.

One AGL Demand based plan offers a 12 c/kWh energy consumption tariff, coupled to a 26.44 c/kWh maximum demand charge. The energy made easy plan that pops up initially does not display the demand tariff. The user needs to open the full details, to note this key tariff. There is no detail listed for the hours or days used in determining the maximum daily demand each billing month. It’s a little flawed as a tool.

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