Time-of-use tariffs spark outrage as consumers allege they were left in the dark
- Replies 11
In the tranquil riverside town of Berri, nestled along the Murray River, Angela Hyde leads a modest life with her family. Yet, the serenity of her surroundings belies the financial strain that looms over her household.
The recent shock of a $2,000 quarterly power bill, a figure that soared past her usual costs, has cast a shadow over her budget-conscious home.
This staggering amount, more than double her previous invoice, has left her grappling with the reality of payment plans—a cycle that often feels like chasing one's tail without ever catching up.
The culprit behind this financial blow? A shift to a time-of-use tariff system that has left many Australians, particularly those in South Australia, reeling from unexpectedly high energy costs.
Under this system, electricity charges skyrocket during peak hours, which span a hefty 14 hours each day.
For Angela, and countless others, this change was allegedly implemented without prior knowledge or consent, leaving them to face the consequences only after the bills arrived.
The theory behind time-of-use tariffs is rooted in economic efficiency.
By charging more during peak hours, consumers are theoretically encouraged to shift their energy usage to times when electricity is cheaper and more abundant—thanks in part to Australia's growing solar power capabilities.
The Australian Energy Regulator (AER) and the Australian Energy Market Commission (AEMC) advocate for these tariffs.
‘Tariff reform can encourage more efficient use of networks, delay the need for network augmentation and investment, and spread network costs more equitably,’ the AER stated in its latest State of the Energy Market report.
As of June 30, 2022, approximately 57 per cent of households within the national electricity market (NEM) possessed metering systems deemed ‘capable of supporting’ these tariffs, although a lesser proportion had actually been enrolled in them.
However, according to the regulator, the Australian Energy Market Commission (AEMC)—responsible for establishing regulations within the NEM—had ‘reached the view that the rollout of smart meters had progressed too slowly’.
Consequently, in August 2023, the AEMC advocated for a compulsory deployment of smart meters to guarantee universal adoption by households by the decade's end.
However, Simply Energy, Ms Hyde’s energy retailer, opted not to comment on her situation or the broader implications of time-of-use tariffs.
Instead, the company issued a statement seemingly shifting responsibility to the poles-and-wires company, SA Power Networks, which manages Ms Hyde's property.
A spokesperson indicated that the installation of the smart meter was carried out by the poles-and-wires company and updated the tariff ‘to the default, which is currently the time-of-use tariff’.
‘We can confirm that the customer (Ms Hyde) is on a time-of-use tariff,’ the spokeswoman asserted.
‘Although the tariff changed, we did not change the customer billing and therefore, we are not required to notify the customer.’
Others hold a negative opinion regarding the stance presented by regulators and the industry.
According to Ross Womersley from the South Australian Council of Social Services, the argument in favour of time-of-use tariffs may seem logical.
However, he criticised the transition to these tariffs for its lack of clear communication to consumers, leaving many unaware of the changes and unable to adjust their energy consumption habits accordingly.
He also voiced strong opposition to the mandatory assignment of cost-reflective prices, arguing for consumer choice and a fairer approach to accessing renewable energy.
‘We think there's a major failing here, both on the part of the regulator and on the part of the retailers who are not informing their customers that this is going on,’ he said.
‘As a result, they can't even start to make decisions about whether there's any way that they could move their demand for electricity use through the day.’
‘And there are genuine and good reasons for people to be concerned,’ he continued.
Mr Womersley added that the tariffs were worsening inequality and significantly impacting those with lower incomes.
He also suggested that for genuine improvement in the system, regulators and the industry should enact changes that ensure more equitable access to surplus renewable energy.
‘The opportunities to really maximise any of the advantages from time-of-use come with having the flexibility on the one hand to move your usage pattern or the mechanisms to control for your demand,’ Mr Womersley explained.
‘And clearly things like battery storage and electric cars are one of those mechanisms for being able to do that.’
‘However, what we also know is that those things are costly. And the only people who are likely to have the capacity to implement measures that really protect them will be those households that probably have the most capacity to continue to pay for their energy use into the future.’
‘But if you haven't got that capacity, then you're going to actually be punished,’ he added.
The situation is particularly dire for individuals like Ms Hyde, who work full-time and cannot easily alter their energy usage to align with off-peak hours.
‘Well, that (changing her usage) is fine if you are at home during the day to do things,’ she lamented.
‘I don't have that option because I work all day. And on weekends when I could do it I've got other commitments… like taking people to sport and… socialising, and stuff.’
‘I don't want to spend all my weekend daytime hours doing washing and catching up on the week's worth of dishes and things like that,’ she added.
Ms Hyde's inability to adjust her power usage schedule left her apprehensive about her upcoming bill and concerned about her financial stability.
‘If I'd known previously, I could have put more money aside to cover the extra or try and cover at least some of the extra [cost],’ Ms Hyde said.
‘Because I've always put money aside for the power bill, knowing that it's a large bill.’
‘And I've always had enough in the bank to pay it. And this time, I haven't,’ she continued.
As energy companies face criticism over the implementation of time-of-use rates, the discussion surrounding the impact of smart meters on consumers' electricity bills continues to gain momentum.
While Ms Hyde’s situation shed light on the challenges and concerns faced by consumers regarding the new tariff structure, another story delved into the potential cost-saving benefits associated with smart meters.
By examining both perspectives, it becomes evident that the introduction of smart meters could play a crucial role in addressing consumer concerns and optimising energy usage, ultimately leading to potential cost reductions for households.
Have you experienced a similar shock with your energy bill? Are you on a time-of-use tariff, and how has it affected your daily life and finances? Share your stories with us in the comments below!
The recent shock of a $2,000 quarterly power bill, a figure that soared past her usual costs, has cast a shadow over her budget-conscious home.
This staggering amount, more than double her previous invoice, has left her grappling with the reality of payment plans—a cycle that often feels like chasing one's tail without ever catching up.
The culprit behind this financial blow? A shift to a time-of-use tariff system that has left many Australians, particularly those in South Australia, reeling from unexpectedly high energy costs.
Under this system, electricity charges skyrocket during peak hours, which span a hefty 14 hours each day.
For Angela, and countless others, this change was allegedly implemented without prior knowledge or consent, leaving them to face the consequences only after the bills arrived.
Angela Hyde was shocked to receive a $2,000 electricity bill after her property was transitioned to a 'time-of-use' tariff without her knowing. Credits: Shutterstock
The theory behind time-of-use tariffs is rooted in economic efficiency.
By charging more during peak hours, consumers are theoretically encouraged to shift their energy usage to times when electricity is cheaper and more abundant—thanks in part to Australia's growing solar power capabilities.
The Australian Energy Regulator (AER) and the Australian Energy Market Commission (AEMC) advocate for these tariffs.
‘Tariff reform can encourage more efficient use of networks, delay the need for network augmentation and investment, and spread network costs more equitably,’ the AER stated in its latest State of the Energy Market report.
As of June 30, 2022, approximately 57 per cent of households within the national electricity market (NEM) possessed metering systems deemed ‘capable of supporting’ these tariffs, although a lesser proportion had actually been enrolled in them.
However, according to the regulator, the Australian Energy Market Commission (AEMC)—responsible for establishing regulations within the NEM—had ‘reached the view that the rollout of smart meters had progressed too slowly’.
Consequently, in August 2023, the AEMC advocated for a compulsory deployment of smart meters to guarantee universal adoption by households by the decade's end.
However, Simply Energy, Ms Hyde’s energy retailer, opted not to comment on her situation or the broader implications of time-of-use tariffs.
Instead, the company issued a statement seemingly shifting responsibility to the poles-and-wires company, SA Power Networks, which manages Ms Hyde's property.
A spokesperson indicated that the installation of the smart meter was carried out by the poles-and-wires company and updated the tariff ‘to the default, which is currently the time-of-use tariff’.
‘We can confirm that the customer (Ms Hyde) is on a time-of-use tariff,’ the spokeswoman asserted.
‘Although the tariff changed, we did not change the customer billing and therefore, we are not required to notify the customer.’
Others hold a negative opinion regarding the stance presented by regulators and the industry.
According to Ross Womersley from the South Australian Council of Social Services, the argument in favour of time-of-use tariffs may seem logical.
However, he criticised the transition to these tariffs for its lack of clear communication to consumers, leaving many unaware of the changes and unable to adjust their energy consumption habits accordingly.
He also voiced strong opposition to the mandatory assignment of cost-reflective prices, arguing for consumer choice and a fairer approach to accessing renewable energy.
‘We think there's a major failing here, both on the part of the regulator and on the part of the retailers who are not informing their customers that this is going on,’ he said.
‘As a result, they can't even start to make decisions about whether there's any way that they could move their demand for electricity use through the day.’
‘And there are genuine and good reasons for people to be concerned,’ he continued.
Mr Womersley added that the tariffs were worsening inequality and significantly impacting those with lower incomes.
He also suggested that for genuine improvement in the system, regulators and the industry should enact changes that ensure more equitable access to surplus renewable energy.
‘The opportunities to really maximise any of the advantages from time-of-use come with having the flexibility on the one hand to move your usage pattern or the mechanisms to control for your demand,’ Mr Womersley explained.
‘And clearly things like battery storage and electric cars are one of those mechanisms for being able to do that.’
‘However, what we also know is that those things are costly. And the only people who are likely to have the capacity to implement measures that really protect them will be those households that probably have the most capacity to continue to pay for their energy use into the future.’
‘But if you haven't got that capacity, then you're going to actually be punished,’ he added.
The situation is particularly dire for individuals like Ms Hyde, who work full-time and cannot easily alter their energy usage to align with off-peak hours.
‘Well, that (changing her usage) is fine if you are at home during the day to do things,’ she lamented.
‘I don't have that option because I work all day. And on weekends when I could do it I've got other commitments… like taking people to sport and… socialising, and stuff.’
‘I don't want to spend all my weekend daytime hours doing washing and catching up on the week's worth of dishes and things like that,’ she added.
Ms Hyde's inability to adjust her power usage schedule left her apprehensive about her upcoming bill and concerned about her financial stability.
‘If I'd known previously, I could have put more money aside to cover the extra or try and cover at least some of the extra [cost],’ Ms Hyde said.
‘Because I've always put money aside for the power bill, knowing that it's a large bill.’
‘And I've always had enough in the bank to pay it. And this time, I haven't,’ she continued.
As energy companies face criticism over the implementation of time-of-use rates, the discussion surrounding the impact of smart meters on consumers' electricity bills continues to gain momentum.
While Ms Hyde’s situation shed light on the challenges and concerns faced by consumers regarding the new tariff structure, another story delved into the potential cost-saving benefits associated with smart meters.
By examining both perspectives, it becomes evident that the introduction of smart meters could play a crucial role in addressing consumer concerns and optimising energy usage, ultimately leading to potential cost reductions for households.
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