There’s a lot that goes on behind the scenes in the world of electricity. To ensure your lights turn on every day there is a lot of underlying costs retailers like us have to pay that make powering your site possible.

To help you learn about the factors that can cause your energy prices to change, here’s a simple and informative summary for Ausgrid, Endeavour, Energex, Essential, and South Australia Power Network customers. 

Once a year we, and most other energy retailers, update our energy rates. 

That’s because every year, those in the energy supply chain review their wholesale, network, and environmental costs and decide what to charge energy retailers like us. We update our prices to reflect these changes in external costs. 

While we hope these changes mean we can reduce your prices, sometimes market conditions will result in an increase. The impact on you is also dependent on your usage, network, and other factors.

Here are the main underlying costs that make up energy prices and can cause power prices to change: 

  • Distribution & network: We have to pay local network service providers to maintain power infrastructure, such as poles and wires, that are necessary to supply you with electricity These changes vary between region and tariff type, and often depend on any upgrades or extensions that are required. Network costs have increased for FY21/22.
  • Wholesale energy: This is the price of electricity we buy from a generator to supply to you. The cost of wholesale energy is determined by demand and the level of rooftop solar entering the grid. The more renewable power entering the grid the less wholesale energy is required, thus reducing demand and cost. As a result of continued solar uptake, wholesale costs have decreased for FY21/22.
  • Solar: While it is good news when a lower wholesale price has reduced the cost of energy from the grid, it means that the value of exported solar falls in a similar way. We've worked hard to maintain as high a FiT as we possibly can.
  • Environmental: This is the cost retailers must pay to comply with government environmental regulations and boost investment in renewable energy. Environmental costs have increased for FY21/22. 
  • Metering: To access usage data from meters we’re required to pay the metering provider or the Local Network Service Provider 
  • The Government: All energy providers need to pay fees to fund the Government’s Renewable Energy Target and various energy efficiency programs. 
  • Debt management: Regulatory rules have exposed retailers to additional costs. When a customer doesn't pay us, we still need to pay 80-85% of that money to the parts of the supply chain listed above.

 

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