Questions & answers: NSW electricity and gas prices and assistance with bills
Much of the price increase is due to Commonwealth programs. The increasing number of Commonwealth interventions in the energy market brings with them an increasing level of Commonwealth responsibility for energy financial assistance measures. Further information on Commonwealth financial assistance is available at www.cleanenergyfuture.gov.au
Information about energy prices
1. What are the components of my electricity bill?
Electricity costs cover:
- wholesale energy costs (electricity from generators purchased in the National Energy Market)
- retail costs (retail call centres and administrative costs)
- distribution and transmission network charges (costs to maintain and upgrade the poles and wires, including 24 hour emergency response teams)
- Commonwealth Carbon Tax and Green Energy Schemes.
2. Who sets NSW electricity prices?
The Independent Pricing and Regulatory Tribunal (IPART) regulates retail electricity prices for small business and residential customers on standard contracts until at least 2013.
The final price of electricity includes wholesale costs, retail costs, network costs and green schemes. IPART reviews wholesale costs regularly, to take into account the cost of purchasing electricity from generators.
Network charges (poles and wires) are regulated by the Australian Energy Regulator (AER), a national independent body. These network charges are included in the final price IPART sets.
3. How does the Australian Energy Regulator set network prices?
The Australian Energy Regulator (AER) is the national, independent specialist regulatory body for distribution and transmission electricity network businesses in Australia. The AER reviews the revenue requirements of the network businesses every five years and the network businesses then submit annual pricing proposals which must be consistent with the determination. In 2009 the AER released new NSW network charges for five years between 2009 and 2014.
4. What is a regulated price and do I have to pay this?
A regulated price is the price charged to customers on standard contracts.
NSW small customers can choose between a standard contract, or shop around and choose their own retailer. The Independent Pricing and Regulatory Tribunal’s (IPART) Myenergyoffers website helps customers compare energy deals.
For customers that may not have access to the internet or require assistance, they may call the NSW Government’s Energy Information Line on 1300 136 888 (select Option Two for the price comparison service).
5. What are the new electricity prices from 1 July 2012?
The Independent Pricing and Regulatory Tribunal (IPART) has released its Final Report recommending increases to the regulated electricity price for households from 1 July 2012. IPART has released indicative annual bills for average residential and small business customers. These can be found at www.ipart.nsw.gov.au.
6. What sort of increases are these?
The draft report indicates regulated retail electricity prices will rise on average by:
- $364 per year (20.6%) for EnergyAustralia* residential customers
- $208 per year (11.8%) for Integral Energy* residential customers
- $427 per year (19.7%) for Country Energy* residential customers
* EnergyAustralia is owned by TRUenergy and Integral Energy and Country Energy are owned by Origin Energy.
7. Why are prices increasing?
The Independent Pricing and Regulatory Tribunal (IPART) sets prices that reflect the efficient cost of supplying electricity to customers. An 'efficient cost' means energy businesses need to spend money wisely, and find business savings internally before passing costs onto consumers.
The key drivers of the price rises are:
- The Commonwealth’s Carbon Tax, which will increase energy bills by 8.9%
- Network charges, which will increase by on average 8.4%.
In addition, IPART has found green schemes will consist of approximately $316 on an average household bill (average $2200). This includes:
- The Commonwealth’s Carbon Tax ($168)
- Renewable Energy Targets (small and large scale) ($102)
- NSW Energy Savings Scheme ($13)
- NSW Climate Change Levy ($34) to fund the Solar Bonus Scheme
More information is available on IPART’s website.
8. Who regulates NSW gas prices?
The Independent Pricing and Regulatory Tribunal (IPART) agrees pricing arrangements with each of the standard gas retailers supplying small customers in NSW - AGL, Country Energy, Origin Energy and ActewAGL. Small gas customers are those that use less than 1 terajoule a year.
These pricing agreements set out the maximum price that each of these retailers can charge small customers on standard contracts in different parts of the State.
Gas customers can also choose to shop around and enter into a negotiated contract with another retailer to get the best deal for their circumstances.
The Australian Energy Regulator (AER) sets the network charges for gas. In NSW, the majority of gas networks are owned by private companies such as Jemena Pty Ltd. The AER sets the amount Jemena can charge retail gas companies and this cost is included in the price paid by small gas customers.
9. What is the process for reviewing gas prices?
The Independent Pricing and Regulatory Tribunal (IPART) has reviewed gas retail prices for 2010 to 2013 and released its report with new prices coming into effect from 1 July 2010. In its decision making process IPART held a public hearing to listen to the views of the community and stakeholders and took public submissions.
Each year, the standard gas retailers submit proposed changed to their prices for IPART consideration.
For more information on your gas price visit the IPART website.
10. What are the most recent gas prices?
The Independent Pricing and Regulatory Tribunal (IPART) has released its final Information Paper recommending increases to the regulated gas retail price for households from 1 July 2012.
IPART has released indicative annual bills for average residential customers. These can be found at www.ipart.nsw.gov.au.
The Information Paper indicated regulated gas retail prices will rise on average by:
- $106 per year (14.8%) for AGL residential customers
- $93 per year (11.6%) for Country Energy residential customers
- $117 per year (10.4%) for Origin Energy residential customers
- $46 - $142 per year (8.8% - 14.5%) for ActewAGL residential customers.
The key drivers of the price rises are;
- The Commonwealth’s Carbon Tax, which will increase gas bills by 5.5% to 9%
- Network charges, which will increase gas bills by 6.7% for a typical AGL residential customer.
For more information on the price of gas for each standard gas retailer visit the Independent Pricing and Regulatory Tribunal (IPART) website.
11. Why are the price increases different for each gas retailer?
Gas network charges account for about half of a customer's total gas bill. Prices vary between gas retailers reflecting the unique characteristics of each network, which include differences in the number and length of pipelines in each network, the terrain and the size of the network area.
The Australian Energy Regulator (AER) sets network charges. The AER also recently reviewed access arrangements for Jemena gas networks and network charges.
The Jemena gas network covers Sydney, Newcastle, the Central Coast, Wollongong and many regional centres. For more information visit the AER website.
The Independent Pricing and Regulatory Tribunal (IPART's) final report on regulated gas tariffs provides for retailers to pass on to customers any changes in network tariffs.
Assistance measures available for customers
12. I’m concerned I may not be able to afford an increase, what can I do?
From 1 July 2012 the NSW Government is introducing a $75 Family Energy Rebate, rising to $150 by 1 July 2014. The Low Income Household Rebate will also increase to $215 from 1 July 2012, rising to $235 by 1 July 2014. From 1 July 2012 households eligible for both rebates will receive a maximum of $250. There are a range of measures to help with energy bills. Other assistance measures include:
- Medical Energy Rebate ($200 a year rising to $215 from July 2012)
- Life Support Rebate (rates vary depending on the type of machine)
- Home Power Savings Program (savings of up to 20 per cent on electricity use)
- Retailer Hardship Policies and Payment Plans
- Funding and support for free financial counselling services. Financial counsellors in New South Wales are accredited with the Financial Counsellors’ Association of NSW Inc (FCAN). See the FCAN website for a list of financial counsellors in your area.
- Save Power website (for useful energy saving tips and information on rebates to assist households purchase energy savings appliances).
- Energy Accounts Payment Assistance (EAPA) vouchers (emergency assistance)
Centrepay is also available to prevent large energy bills by making regular instalments.
More information on electricity rebates and EAPA is available from your electricity retailer or from the Energy Information Line on 1300 136 888.
For more information on rebates, hardship programs and payment plans contact your retailer, who can assist and/or refer you to the relevant agency.
13. How will I receive the Low Income Household Rebate?
The Low Income Household Rebate was introduced on 1 July 2011 and replaced the Energy Rebate. People that received the Energy Rebate, did not have to do anything, and automatically received the more generous Low Income Household Rebate.
Customers that are eligible but not currently receiving the Low Income Household Rebate need to contact their retailer to apply.
14. How will I receive the Family Energy Rebate?
NSW electricity account holders will be eligible to receive the Family Energy Rebate in the 2012-13 financial year if they were eligible for the Commonwealth Government's Family Tax Benefit A or B at any time during the previous financial year (2011-12).
Customers will be able to apply for the Family Energy Rebate from 1 July 2012 and information on how to apply will be available before then. Assessment of applications will involve verification of applicants’ eligibility for the Family Tax Benefit A or B.
The timing of the annual Family Energy Rebate payment will depend on verification of Centrelink data and the timing of energy retailers’ billing cycles.
Recipients of the Low Income Household Rebate will also be able to claim the Family Energy Rebate provided they meet the eligibility criteria. However, the combined rebates will be capped at $250 per annum, per household.
14. What else is the Government doing to address electricity price rises?
The NSW Government is:
- Merging the three NSW electricity distribution businesses into one State-owned corporation, to cut waste, reduce administrative overheads and corporate costs and reduce duplication in shared services, to deliver more than $400 million in cost and efficiency savings over four years to fund rebates and put downward pressure on network charges.
- Capping dividends from the NSW electricity distribution businesses requiring the impacts on price, service quality and reliability to be considered when setting future dividends, and requiring Boards to declare that dividends will not place additional pressures on price, service quality or future reliability.
- Selling the State’s electricity generators in line with recommendations from a Special Commission of Inquiry into the former Government’s electricity transactions. The sale of these generators will ensure NSW consumers benefit from a more competitive electricity sector which will help to put downward pressure on rising electricity prices.
- Improving the transparency of energy pricing by requiring retailers to print the typical cost of the Commonwealth carbon tax and green energy schemes on all electricity bills for small customers who are on regulated contracts.
15. I run a small business, what assistance is there to help me?
There are programs available such as the Efficiency for Small Business Program, which provides personalised energy assessments, tailored action plans and rebates of up to $5,000 for making energy efficiency improvements that help small businesses save money and reduce carbon pollution. For more information visit www.savepower.nsw.gov.au.
16. I have tried to talk to my retailer but they won’t help, what can I do?
Customers who need assistance with their energy bills should first contact their retailer.
You can also contact a community welfare organisation or financial counsellor. Community welfare organisations may be able to help people with immediate difficulty paying energy bills, for instance through the provision of Energy Account Payment Assistance (EAPA) vouchers and other emergency assistance. Financial counsellors can take a more holistic, longer term approach to dealing with the customer's financial difficulties. Financial counsellors work closely with community welfare organisations and can refer clients to other services where appropriate.
Customers who are experiencing difficulty dealing with their retailer can contact the Energy and Water Ombudsman NSW (EWON), which is a free, independent service available to help resolve disputes.
EWON has been approved by the Government as an independent way of helping customers resolve disputes with energy providers where internal dispute resolution procedures have failed. For more information you can contact EWON on freecall 1800 246 545 or visit www.ewon.com.au.
17. How can I shop around and compare energy deals?
Visit the Independent Pricing and Regulatory Tribunal’s (IPART) price comparison website www.myenergyoffers.nsw.gov.au that allows small customers (households and small business) to easily compare electricity and gas deals for free.
For customers that may not have access to the internet or require assistance, they may call the NSW Government’s Energy Information Line on 1300 136 888 (select Option Two for the price comparison service).
18. What rebates and assistance can I get for my gas bill?
The NSW Government assistance measures are intended to help to households in need no matter what energy source they use. The same rebates are paid to eligible households whether they have gas or not. This recognises that households have similar needs even if some use gas as well as electricity. All households need energy for hot water, cooking, heating and cooling regardless of the source of that energy.
Because all gas customers will have some form of electricity account as well and for administrative purposes, NSW Government rebates are paid off electricity bills in all cases.
Customers that also have the option to use gas for heating water, cooking and heating their homes are at an advantage because the cost of water heating is a large percentage of energy costs and gas is usually more efficient and cheaper.
The Energy Accounts Payment Assistance (EAPA) scheme is different to rebates and EAPA vouchers can be used for both electricity and gas accounts.
19. I have a dispute with my gas retailer, what can I do?
Gas customers are also able to contact Energy and Water Ombudsman NSW (EWON) if they are having difficulty resolving a dispute with their gas retailer. The NSW Government has made regulatory changes to ensure all gas retailers and distributors are members of EWON. All gas customers are able to access this free, independent service.