Final Proposal Being Released
The Australian Energy Regulator will this Friday, June 5 2020, hand down the final determination 2020-25 Regulatory Proposal.
This will include changes to:
- Pricing Levels
- Peak & Off-Peak Windows
- Smart Meter Roll-Out
- Charging Parameters
- Tariff Classes
- Tariff Structures
Commercial facilities can benefit greatly from network tariff optimisation however the challenge can be the steps required to collect the right data and understand the complexity in which network tariff structure is suitable for your business operation and the way you use power.
What You Need To Know About Tariff Optimisation
What are charge elements?
When designing network tariffs, Energex selects from a number of different types of charges that can be used to build a fee for electricity use. These types of charges are chosen to best reflect the costs of delivering a safe and reliable supply of electricity to customers who are on that network tariff. These different types of charges are called charge elements.
Types of charge elements
The different charge elements used by Energex when calculating network tariffs are:
Flat Volume Charges
Time of Use (ToU) Volume Charges
Depending on whether a network tariff is designed for large or small customers, some of these charge elements can serve different purposes.
A large customer network tariff is demand-based and designed for customers with annual electricity consumption that is greater than 100,000 kilowatt hours (kWh) or 100 megawatt hours (MWh). A small customer network tariff is energy-based and designed for customers with annual electricity consumption less than 100 MWh.
Description Of Charge Elements
A fixed $/day charge applied to each energised connection point where energy or demand is recorded.
For small customers, fixed charges are designed to reflect the average capacity of the electricity network allocated to a typical customer on that network tariff. For large customers, fixed charges reflect the costs associated from the connection and management of the customer.
Flat Volume Charge
A flat rate, calculated in c/kWh, applied at all times of the day to the energy used at a connection point.
These charges are designed to recover the costs related to the volume (or amount) of electricity consumed by customers peak & off peak.
For small customers who do not have a demand charge, this charge also recovers costs that would have otherwise been recovered from a demand charge and are not recovered from the tariff fixed charge.
Don’t know what tariff your business is on?
ToU Volume Charge
A variable charge, calculated in c/kWh, with different rates applying to the energy used at a connection point at different times of the day.
ToU charges offer lower rates during off-peak periods and higher rates during peak periods. These charges are designed to reduce demand on the network during peak times by encouraging customers to switch non-essential electricity consumption to off- peak and/or shoulder times.
For small customers, ToU volume charges can recover costs that would have otherwise been recovered from a demand charge and are not recovered from the tariff fixed charge.
A monthly charge calculated as a $/kilovolt ampere (kVA) or $/kilowatt (kW) rate for demand recorded at a connection point.
These charges are applied to the maximum half hourly kVA (or kW) power reading that occurred at a connection point during the billing period.
These charges are designed to reflect the costs associated with providing sufficient network capacity to a specific customer to cater for their maximum network demand.
Demand charges deliver stronger user-pays pricing than a volume charge alone. This means that customers who put more pressure on the network are charged more. As a result, these charges encourage customers to reduce their electricity costs by reducing their maximum demand.*
New Demand Charge Tariff’s
For the first time, Energex will offer a voluntary demand tariff to small business customers (NTC7100 – Business Demand) from 1 July 2017.
The demand charge (kW) for this new tariff will be based on the maximum kilowatt demand measured as a single peak over a 30 minute period during peak charging window within a monthly billing period.
This tariff is available to business customers with consumption less than 100,000 kWh/year and con not be used in conjunction with Business flat (NTC8500).
For small businesses customers NTC7100 – Business Demand Tariff will become compulsory from 1 July 2020.
For larger demand customers, Energex will offer a voluntary demand ToU 11 kV (NTC7400) tariff for customers with a network coupling point at 11 kV feeder that is a dedicated transformer.
The demand charge (kVA) for this new tariff will be based on the maximum kilovolt ampere demand measured as a single peak over a 30 minute period during peak charging window within a monthly billing period.
For business customers on (NTC8100 or NTC8300) this tariff may provide a benefit by reduced network charges.
In addition for business customers, Energex has an opt-in tariff (NTC7200) available to customers who are not eligible for the (NTC7400), where their coupling point at the 11kV feeder is shared with other customers.
This tariff is similar to (NTC7400) however will suit customers with specific load profile. The demand charge (kVA) for this new tariff will be based on the maximum kilovolt ampere demand measured as a single peak over a 30 minute period during peak charging window within a monthly billing period.
Energy Partners Strategic Direction
For business customers on demand-based network tariffs with consumption between 100 MWh and 1.5 GWh, Energy Partners can analyse their unique 30 minute interval data.
Energy Partners has found this has helped customers better understand their load profile and impact on the network.
Customers feel by implementing demand management strategies they gain more control and reduce their costs.
Energy Partners does this by working together with owners to design in engineered solutions with proven technologies that are measurable to reflect the savings potential.
Additionally, the customers find they could access new voluntary tariff’s and optimise their tariff arrangement for accelerated savings potential.
For business customers, that have smaller load profiles, Energy Partners has encouraged business owners to strongly consider the investment into renewable energy sources and take advantage of their roof space by implementing solar power plants to become more Energy Independent.
This provides Business Owners the opportunity to become re-assigned from Small Demand to Business Flat tariff by Energex and again experience accelerated savings potential.
For business customers, Energy Partners is currently assessing the feasibility of implementing solar power generation now, prior to Energex apply default tariff Business Demand (NTC7100) come 2020, where demand charges will move towards a more complicated and costly pricing system.