Getting started
The tariff trial is a co-operative project between Queensland’s two electricity distributors – Ergon Energy and ENERGEX. The trial is a theoretical study and will not affect your normal electricity bill.
Why are we doing this?
The tariff trial will help us understand if customers are able, or prepared, to shift their electricity usage from peak to off-peak periods if we reward them for doing so. The trial will provide valuable information about a pricing system that rewards customers who voluntarily change the way they use electricity.
The trial will commence in January 2011 and run for two years. The trial is occurring in three locations across Queensland – Cairns, Toowoomba and Brisbane. Applications are now closed and all successful applicants have been notified.
What is Peak demand?
When we get up in the morning or arrive home at night and switch on electrical appliances such as air-conditioners, dishwashers, washing machines and stoves, it creates an increase in the demand for electricity. This increase is called peak demand. The biggest peak demand occurs between 4pm and 8pm each day.
What is a Maximum Demand (Peak) Day?
Peak demand occurs between 4pm and 8pm all year round but on about 15 days of the year we experience a Maximum Demand (Peak) Day when demand levels are at their highest. This usually occurs in your area on the hottest or coldest days of the year (when the majority of people want to get warm or cool down).
It costs Ergon Energy and ENERGEX hundreds of millions of dollars every year building and maintaining infrastructure just to cope with these few hours on Maximum Demand (Peak) Days. By changing the way we all use electricity, these costs could be significantly reduced.
DID YOU KNOW that around 50% of what is spent on the electricity network each year is to provide electricity for less than 1% of the year, on Maximum Demand (Peak) Days?
How the trial will work
During the trial you are encouraged to adjust your electricity usage in response to theoretical prices (outlined below). This theoretical pricing is linked to the domestic flat rate electricity price that most households in Queensland pay for their electricity – commonly referred to as Tariff 11. The theoretical prices are set out below.
Consumption Tariff Trial
Night Rate (off peak)
Every night of the year between 8pm and 8am your theoretical price will be a 20% discount of the Day Rate (that is 20% lower than the Tariff 11 price). Savings will be added to your incentive payment.
Day Rate (peak)
Every day of the year between 8am and 8pm your theoretical price will be the same as Tariff 11, except on Maximum Demand (Peak) Days.
Maximum Demand (Peak) Day
On 15 Maximum Demand (Peak) Days per year you’ll be asked to keep your electricity use below a Threshold Limit between the hours of 4pm and 8pm. Electricity usage of less than the Threshold Limit will be charged at the normal day rate price.
You’ll be charged a higher theoretical electricity price if your electricity usage in any of these hours is equal to or above the Threshold Limit. This will reduce your performance bonus.
Different Threshold Limits will be trialled and participants will be assigned to a pricing structure at our discretion.
We will contact you the day before each Maximum Demand (Peak) Day, so that you are able to manage your usage successfully on those days.
Threshold Limits
|
Trial |
Threshold Limit | Price |
|---|---|---|
|
Consumption Trial 1 |
2.7 kilowatts per hour |
8 times the Day Rate |
|
Consumption Trial 2 |
2.7 kilowatts per hour |
5 times the Day Rate |
|
Consumption Trial 3 |
2.7 kilowatts per hour to below 4.5 kilowatts per hour 4.5 kilowatts per hour |
5 times the Day Rate 8 times the Day Rate |
Capacity Tariff Trial
On 15 Maximum Demand (Peak) Days per year you’ll be asked to keep your energy use below 4.5 kilowatts per hour between 4pm and 8pm.
You’ll be charged a higher theoretical electricity price, which is $2.50 per hour, if your electricity usage in any of these hours is equal to or above 4.5 kilowatts per hour. This will reduce your performance bonus.
We will contact you the day before each Maximum Demand (Peak) Day, so that you are able to manage your usage successfully on those days.
Your Performance Bonus
You can receive a performance bonus of up to $250 ($150 for Capacity trial) during this trial. At the start of each calendar year, we will set up a performance bonus for you of $75.
This bonus will rise and fall during the year depending on how you use your electricity and what you would have paid under the theoretical tariffs (prices). The bonus can rise to a maximum of $125 ($75 for Capacity trial) or fall to a minimum of $25 in each calendar year.
Increase your bonus by shifting your electricity use to off-peak every day
While on the trial, you will theoretically save 20% on all electricity usage between the hours of 8pm and 8am. Therefore, you can increase your performance bonus every day by shifting some of your consumption out of the peak pricing period (8am to 8pm) to off peak (8pm to 8am) to access the discounted rate.
Some of the ways you can do this include:
- Run your dishwasher, dryer and washing machine before 8am or after 8pm
- Run your pool filter between 8pm and 8am (remember to consider your neighbours).
Manage your usage on Maximum Demand (Peak) Days to stop your bonus from falling
You can only lose your performance bonus if you reach or exceed the Threshold Limit between 4pm and 8pm on Maximum Demand (Peak) Days. Keep your electricity usage below the Threshold Limit between 4pm and 8pm on those days to stop your performance bonus being reduced. You will be notified which 15 days of the year will be Maximum Demand (Peak) Days.
On a Maximum Demand (Peak) Day between 4pm and 8pm consider doing the following to reduce your electricity usage:
- Turn off the pool filter, dishwasher, washing machine or clothes dryer
- Turn off TV’s if no one is watching them
- Turn off air-conditioners in rooms that are unoccupied
- Avoid ironing or vacuuming or using other high wattage appliances
- Use the gas BBQ for cooking if possible.
REMEMBER – Your performance bonus can only be reduced on Maximum Demand (Peak) Days if your electricity usage is equal to or above the Threshold Limit in any one of the hours between 4pm and 8pm.
It is likely there will be some hours between 4pm and 8pm on Maximum Demand (Peak) Days when your electricity usage will be equal to or above the Threshold Limit and will therefore reduce your performance bonus. The aim is to limit the number of times this happens.
What else you need to know
Your Performance Statement will tell you how you’re going
We’ll provide you with periodic feedback through a performance statement. This performance statement will provide you with information on how much you would have paid if the theoretical trial pricing had been in place, along with the current balance of your performance bonus.
The statement will show how you may have increased your performance bonus (by using electricity during the off-peak period) and how it may have decreased (using electricity at or above the threshold on Maximum Demand (Peak) Days). You will be assigned (on a random basis) to receive a statement either monthly or quarterly.
Contact us
Who do I talk to if I wish to discuss the trial?
If you need more information, have a comment or concern about the trial or want to opt out, please contact our joint Ergon Energy and ENERGEX tariff trial team on 1300 364 910 (this number will be answered by the ENERGEX call centre) or email us at tarifftrial@ergon.com.au