On 1 July 2015, Queensland’s small businesses moved onto Energex’s new demand-based tariff structures. What will that mean for you? Businesses have had 2 years to implement energy management strategies that reduce their demand on the electricity network – but, have you been paying attention? Here’s what you need to know about the new tariff structure statement. Apply for a Free Energy Bill Audit.
What Is a Tariff and How Do They Work?
All electricity consumers are assigned to at least one tariff. Your tariff considers your energy consumption usage and establishes a standard charge rate at which to calculate your consumption cost and demand on the network.
In November 2015, Energex released their Tariff Structure Statement for 1 July 2017 to 30 June 2020. This new tariff structure statement will introduce demand-based tariffs for small and medium businesses. New demand tariffs for this tariff class are a step towards more cost-reflective pricing and will encourage customers to use the network more efficiently.
What Are the Tariff Structure Changes?
Energex have moved from a kW demand to a more cost reflective kVA demand. This provides a pricing signal to those customers who are not using the network efficiently to improve their power factor efficiency.
Small business tariffs have been calculated using a single peak half-hour demand during the billing period. It’s a 30-minute window during the billing month when your business used the most electricity. This is used to calculate your demand charge.
Which Tariffs Apply to You?
There are three common business tariffs that most likely apply to you; business flat, small demand, and large demand. Check your most recent electricity bill to identify the tariff you’ve been assigned to.
Business Flat is the default tariff for all businesses which consume less than 100,000-kWhs per year. You’ll be charged a:
- flat kWh rate, and
- daily supply charge
Small Demand is the default tariff for all businesses which consume more than 100,000-kWhs per year. You’ll be charged a:
- daily supply charge,
- volume charge in kWhs, and
- kVA demand charge for your highest peak usage over a 30-minute period each month.
The large demand tariff is a similar set up to small demand but is for larger customers who consume more than 100,000-kWhs per year. However, this tariff is best suited for those customers with much high annual consumption and high kVA demand.
Many customers can gain good savings by engaging an expert to complete a detailed tariff analysis and opt for a more beneficial tariff instead of the default Energex has placed them on.
Opportunities for Small Demand Customers.
Check out your bill and identify your network charge line items so you can calculate your total demand charge for the year. For some small customers, this demand charge could equate to 50% of their total bill amount!
But, this isn’t the end of the road for you. There are some things you can do to improve your situation. If you can manage your energy consumption and consistently keep it below the 100,000-kWh threshold, you’ll be able to request a tariff re-assignment from Energex to move your business onto the cheaper business flat structure rate. Depending on your business consumption needs, this could be through power factor correction, solar power, or a comprehensive energy management solution.
Apply for a Free Energy Bill Audit to see if you qualify.