Victorian Energy Prices January 2019

Transcription

1 Victorian Energy Prices January 2019 An update report on the Victorian Tariff-Tracking Project

2 Victorian Energy Prices January 2019 An Update report on the Victorian Tariff-Tracking Project May Mauseth Johnston, February 2019 Alviss Consulting Pty Ltd twitter.com/alvissc twitter.com/vinniesaust Contact: Gavin Dufty Manager, Social Policy Unit Victoria St Vincent de Paul Society Phone: (03) or twitter.com/gavindufty Cover photo: Kim Walvisch on Instagram) St Vincent de Paul Society and Alviss Consulting Pty Ltd This work is copyright. Apart from any use permitted under the Copyright Act 1968 (Ctw), no parts may be adapted, reproduced, copied, stored, distributed, published or put to commercial use without prior written permission from the St Vincent de Paul Society.

3 Disclaimer The energy offers, tariffs and bill calculations presented in this report and associated workbooks should be used as a general guide only and should not be relied upon. The workbooks are not an appropriate substitute for obtaining an offer from an energy retailer. The information presented in this report and the workbooks is not provided as financial advice. While we have taken great care to ensure accuracy of the information provided in this report and the workbooks, they are suitable for use only as a research and advocacy tool. We do not accept any legal responsibility for errors or inaccuracies. The St Vincent de Paul Society and Alviss Consulting Pty Ltd do not accept liability for any action taken based on the information provided in this report or the associated workbooks or for any loss, economic or otherwise, suffered as a result of reliance on the information presented. If you would like to obtain information about energy offers available to you as a customer, go to the Victorian Government s website or contact the energy retailers directly. Acknowledgments This project was funded by Energy Consumers Australia ( as part of its grants process for consumer advocacy projects and research projects for the benefit of consumers of electricity and natural gas. The views expressed in this document do not necessarily reflect the views of Energy Consumers Australia. We also wish to thank and acknowledge the efforts of the various retailers that review and provide feedback on these reports. While any errors that may occur are our own, we appreciate their views, suggestions and cooperation.

4 The Victorian Tariff-Tracking Project To date, this project has tracked electricity and gas tariffs in Victoria from July 2008 (retail price deregulation took effect on 1 January 2009) to January 2019, and developed a spreadsheet based tool that allows consumer advocates to build on the initial analysis and continue to track changes as they occur. In 2016, market offers available to new solar customers were added to the Tariff-Tracking project. The workbook allows users to calculate annual bills based on retailers rates, feed in tariffs offered and additional discounts. Again, the user can enter consumption level as well as choosing to run the bill calculation based on 1.5 kw or 3 kw solar systems. We have developed five workbooks that allow the user to enter consumption levels and analyse household bills for gas and electricity: Workbook 1: Electricity standing offers July January 2019 Workbook 2: Gas standing offers July January 2019 Workbook 3: Electricity market offers 2010 to 2019 Workbook 4: Gas market offers 2010 to 2019 Workbook 5: Solar market offers 2016 to 2019 The five workbooks can be accessed at the St Vincent de Paul Society Victoria s website au/energy

5 Contents The Victorian Tariff-Tracking Project Key findings 1 1. Changes to the standing offers Electricity standing offers January 2018 January Gas standing offers January 2018 January Market offers Electricity market offers post July Gas market offers January Solar market offers January Methodology and assumptions Electricity network charges Comparing all market offers Total cost of energy and price changes by area Inner city, inner North and Eastern suburbs Inner West and North Western Suburbs South Eastern suburbs and Mornington Peninsula Outer Western suburbs and Western Victoria Outer Northern and Eastern suburbs and Eastern Victoria 55

6 Key findings Most of the Victorian retailers gazetted new standing offers that took effect in early January Two of the three incumbent retailers, and Energy Australia, did not change their electricity standing offer prices in January 2019., on the other hand, decreased their electricity standing offer prices by -2% on average. 1 For gas, Energy Australia s standing offer prices have increased by 4-5% while s prices have decreased slightly. s prices remained unchanged. continues to be the retailer with the highest electricity standing offers in all network areas. and have the highest gas standing offer prices. Analysis presented in section 1 shows that many of the retailers (13 out of 23) have not changed their electricity standing offer prices since January Covau, GloBird and Diamond Energy, however, are the retailers with the greatest increases while Sumo,, and Powerdirect reduced their standing offer electricity prices across all network areas. Households with typical electricity consumption can save up to $1,800 - $2,270 per annum (depending on their network area) if switching from the worst standing offer to the best market offer. 2 See section 2.1. The difference between the best and the worst market offers ranges from $700 per annum (in Citipower s area) to $950 (in Ausnet s area) for customers with typical consumption levels. 3 See section Tango Energy s market offers produce the lowest annual bill for average consumption households in all network areas. Dodo, on the other hand, has the most expensive market offer in all network areas. 4 See section While some retailers did not change their electricity market offers in January 2019, some decreased their rates while others increased theirs. Q Energy, GloBird and Alinta are the retailers with the greatest price increases while Simply,, Powerdirect, Lumo, 1st Energy and had the greatest price decreases. See section Gas customers with typical consumption (63,000Mj) can save up to $670 - $1,050 per annum (depending on their gas zone) if switching from the worst standing offer to the best market offer. 5 See section 2.2. The price-spread for gas market offers ranges from $310 per annum (Ausnet West/Tru West gas zone) to $570 (Multinet 1/Origin Metro gas zone) for customers with typical consumption levels. 6 See section Note that all three retailers now offer additional discounts to some (concession card holders) or all standing offer customers that are not included in their standing offer rates. See November 2018 media releases from Origin: com.au/about/investors-media/media-centre/origin_continues_price_relief_for_victorian_customers.html, : agl.com.au/about-agl/media-centre/asx-and-media-releases/2018/november/agl-announces-safety-net-for-electricitycustomers and Energy Australia: 2 Based on the worst of the retailers standing offer (single rate) and the best of the published market offers (including guaranteed discounts and/or pay on time discounts). 3 Households using 4,800kWh per annum (single rate) and all market offer bills include guaranteed discounts and pay on time discounts. Discounts that require payments to be made by direct debit are not included. 4 Ibid. 5 Based on the worst of the retailers standing offer and the best of the published market offers (including dual fuel offers, guaranteed discounts and/or pay on time discounts). 6 Bill calculations based on average electricity (4,800kWh) market offers including guaranteed discounts and pay on time discounts. 1

7 Energy Australia, Alinta, Momentum and Covau are the retailers that increased their gas prices the most in January 2019 while had the greatest price decreases. See section New solar customers with a 3kW system installed will have an annual bill that is between $665 and $865 less (depending on network area) than non-solar customers with the same consumption level. 7 See section 2.3. The maximum price-spread is around $515 in Ausnet, $475 in Jemena and Powercor s areas, $460 in United Energy and $420 in Citipower. 8 See section 2.3. In January 2019, the regulated electricity network charges increased in all network areas except for the Jemena and United Energy networks. The greatest increase was in the Ausnet network (5%). See section 3. As a proportion of electricity bills, the network charge component is currently highest in Ausnet (28%) and lowest in Citipower, Jemena and United Energy (21%). 9 See section 3. Section 4 compares all published electricity and gas market offers as of January As such it includes offers with various conditions such as direct debit payments, membership of sports clubs or frequent flyer programs, as well as other conditions). 10 Twenty-two retailers offer 67 electricity market offers in the Citipower network and fifteen of these offers require payment by direct debit. Only five of the offers have guaranteed (non-conditional) discounts while over half of the offers (35) have a conditional pay on time discount. Furthermore, monthly billing is becoming an increasingly common feature of market offers and twenty-six of the offers require customers to pay monthly instead of quarterly. See section 4. Dual fuel standing offer customers in Kilmore, Seymour, Violet Town, Nagambie, Wangaratta, Chiltern and Wodonga, continue to have the highest average annual combined energy bills. Based on typical consumption levels, the average combined annual energy bill in these areas is now almost $4, Bill calculations based on average electricity (4,800kWh) market offers including guaranteed discounts and pay on time discounts. 8 Based on the worst and the best of the published market offers for single rate customers using 4,800 kwh per annum and a 3kW solar system installed. Bills include additional discounts and/or pay on time discounts and FIT, 3kW solar system. 9 The annual Network Use of System Charges (NUOS) have been calculated by allocating 1,200kWh per quarter (again based on annual consumption of 4,800kWh) to the step charges stipulated in the NUOS. The annual NUOS cost also includes fixed charges. Note that as United Energy s NUOS charge has been a seasonal tariff over the last four years, the United Energy consumption used in these calculations is thus based on a proportional allocation of a 5 month summer tariff and a 7 month non-summer (off-peak) rate. NUOS charges do not include smart metering costs. 10 The standard analysis of market offers in the Tariff-Tracking reports do not include offers where the customer is required to pay by direct debit or be a member of a program/organisation. It also only includes one offer for each retailer. 11 Bill calculations are based on the incumbent retailers average standing offer for electricity and gas customers for dual fuel households using 4800kWh and 63,000Mj per annum in the Ausnet electricity network and AGN North/Origin North gas zone. 2

8 1. Changes to the standing offers Most of the Victorian retailers gazetted new standing offers that took effect in early January 2019 and this section compares these new standing offer rates to those that took effect in January Electricity standing offers January 2018 January 2019 As in the previous Tariff-Tracking reports, the bill calculations in this report have assumed an average consumption of 4,800kWh per annum for households on the single rate. 12 These are generally households connected to mains gas and therefore have a lower consumption than all- electric households. For allelectric households, which are predominantly in rural areas, the bill calculations have assumed an average consumption of 7,000kWh per annum. The rates used in the calculations are those for the controlled load offers and a split of 70% peak and 30% off-peak has been assumed. There are five network businesses in Victoria: Powercor and Ausnet distributing electricity to rural and regional Victoria and Citipower, Jemena and United Energy. Two of the three incumbent retailers, and Energy Australia, did not change their electricity standing offer prices in January 2019., on the other hand, decreased their electricity standing offer prices by -2% on average. 13 Charts 1-3 below show the incumbent retailers electricity standing offer as of January 2018 and January On average, decreased its standing offer prices by -2%. is the incumbent retailer in the Jemena and United Energy networks and standing offer customers with an annual consumption of 4,800 kwh (single rate) will experience an annual decrease of $35 (or -1.8%) in Jemena and $30 (or -1.6%) in United Energy s area. Chart 1 Changes to s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based on single rate tariff and annual consumption of 4,800kWh 2,400 2,200 Jan'18 Jan'19 $ per annum 1,800 1,600 1,400 1,200 CP PC AUS JEN UE Network areas Origin and Energy Australia s electricity standing offer prices have remained unchanged since January See charts 2 and Consumption levels do vary between network areas, but we believe 4,800kWh and 7,000kWh per annum are appropriate benchmarks to analyse tariff changes and bill impacts for Victorian households. 13 Note that all three retailers now offer additional discounts to some standing offer customers that are not included in their standing offer rates. and Origin offer additional discounts to all standing offer customers while Energy Australia offer additional discounts to all concession card holders on standing offer tariffs. See FN 1 above. 3

9 Chart 2 Changes to Origin s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based on single rate tariff and annual consumption of 4,800kWh 2,400 2,200 Jan'18 Jan'19 $ per annum 1,800 1,600 1,400 1,200 CP PC AUS JEN UE Network areas Chart 3 Changes to Energy Australia s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based on single rate tariff and annual consumption of 4,800kWh $ per annum 2,400 2,200 1,800 1,600 Jan'18 Jan'19 1,400 1,200 CP PC AUS JEN UE Network areas As highlighted in the previous update report on the Victorian Tariff-Tracker project, some retailers place customers on their standing offer rates when the market offer s benefit period expires and it is therefore important that market offer customers are aware of retailers with very high standing offer rates. 14 The difference between standing offer prices are even greater when comparing all 23 retailers as of January The difference between the worst and the best standing offer is highest in the Ausnet network where the difference is approximately $1,700 per annum for a medium consumption household (down from $2,150 in January 2018). In Jemena the difference is $1,535, in Powercor it is $1,390, in Citipower s network areas the difference is around $1,230, and in United Energy s network area the maximum difference is $1,210. continues to be the retailer that produces the highest standing offer bills in all network areas. The three incumbent retailers standing offers are all in the middle-band of most network areas. Charts 4 8 below show retailers current annual standing offer bills for each of the five network areas St Vincent de Paul Society and Alviss Consulting, The NEM -A hazy retail maze, December Tango Energy was previously known as Pacific Hydro. 4

10 Chart 4 Standing offers in the Citipower network (as annual bills, inc GST), January Calculations based on single rate tariff and annual consumption of 4,800kWh SUMO POWER GLOBIRD ENERGY 1ST ENERGY PEOPLE ENERGY LUMO ENERGY COVAU POWERSHOP SIMPLY ENERGY BLUE NRG ENERGYAUSTRALIA DIAMOND ENERGY ORIGIN ENERGY POWERDIRECT RED ENERGY AMAYSIM CLICK ENERGY ALINTA ENERGY Q ENERGY DODO POWER & GAS COMMANDER TANGO ENERGY MOMENTUM ENERGY 2,547 2,379 2,348 2,225 2,179 2,137 2,077 2,026 2,005 1,955 1,894 1,855 1,855 1,839 1,825 1,825 1,800 1,782 1,775 1,768 1,757 1,716 2, ,500 2,500 3,000 3,500 Chart 5 Standing offers in the Powercor network (as annual bills, inc GST), January Calculations based on single rate tariff and annual consumption of 4,800kWh SUMO POWER 1ST ENERGY PEOPLE ENERGY GLOBIRD ENERGY POWERSHOP LUMO ENERGY COVAU DIAMOND ENERGY ENERGYAUSTRALIA SIMPLY ENERGY ORIGIN ENERGY BLUE NRG DODO POWER & GAS COMMANDER ALINTA ENERGY POWERDIRECT AMAYSIM CLICK ENERGY RED ENERGY TANGO ENERGY MOMENTUM ENERGY Q ENERGY 2,329 2,323 2,311 2,249 2,234 2,225 2,161 2,132 2,069 2,060 2,031 2,011 2,011 2,010 2,010 2,004 1,937 1,882 1,858 2,767 2,765 2,881 3, ,500 2,500 3,000 3,500 5

11 Chart 6 Standing offers in the Ausnet network (as annual bills, inc GST), January Calculations based on single rate tariff and annual consumption of 4,800kWh SUMO POWER 1ST ENERGY PEOPLE ENERGY GLOBIRD ENERGY COVAU POWERSHOP LUMO ENERGY DIAMOND ENERGY SIMPLY ENERGY ENERGYAUSTRALIA BLUE NRG ALINTA ENERGY DODO POWER & GAS COMMANDER ORIGIN ENERGY AMAYSIM CLICK ENERGY MOMENTUM ENERGY RED ENERGY POWERDIRECT TANGO ENERGY Q ENERGY 3,184 2,994 2,779 2,562 2,513 2,509 2,407 2,369 2,327 2,323 2,295 2,273 2,273 2,263 2,183 2,183 2,171 2,163 2,130 2,130 2,088 2,001 3, ,500 2,500 3,000 3,500 4,000 Chart 7 Standing offers in the Jemena network (as annual bills, inc GST), January Calculations based on single rate tariff and annual consumption of 4,800kWh SUMO POWER 1ST ENERGY GLOBIRD ENERGY PEOPLE ENERGY LUMO ENERGY COVAU POWERSHOP SIMPLY ENERGY ENERGYAUSTRALIA BLUE NRG DIAMOND ENERGY ALINTA ENERGY ORIGIN ENERGY DODO POWER & GAS POWERDIRECT COMMANDER AMAYSIM CLICK ENERGY RED ENERGY TANGO ENERGY MOMENTUM ENERGY Q ENERGY 2,369 2,286 2,254 2,221 2,175 2,148 2,081 2,077 2,043 2,039 2,036 2,036 2,028 1,982 1,982 1,967 1,850 1,815 1,716 2,685 2,673 2,868 3, ,500 2,500 3,000 3,500 6

12 Chart 8 Standing offers in the United Energy network (as annual bills, inc GST), January Calculations based on single rate tariff and annual consumption of 4,800kWh SUMO POWER GLOBIRD ENERGY 1ST ENERGY PEOPLE ENERGY LUMO ENERGY COVAU POWERSHOP SIMPLY ENERGY DIAMOND ENERGY ENERGYAUSTRALIA BLUE NRG ORIGIN ENERGY TANGO ENERGY POWERDIRECT DODO POWER & GAS ALINTA ENERGY COMMANDER RED ENERGY AMAYSIM CLICK ENERGY Q ENERGY MOMENTUM ENERGY 2,605 2,552 2,504 2,312 2,308 2,230 2,178 2,134 2,109 2,035 2,015 1,971 1,937 1,937 1,930 1,927 1,920 1,894 1,876 1,876 1,840 1,823 3, ,500 2,500 3,000 3,500 Charts 9 13 below show the average increases as well as the individual retailers increases in each network area from January 2018 to January Many of the retailers (13 out of 23) have not changed their electricity standing offer prices since January Covau, GloBird and Diamond Energy, however, are the retailers with the greatest increases while Sumo,, and Powerdirect reduced their standing offer electricity prices across all network areas. In the Citipower network, the average increase across the 23 retailers is 1.4%. Retailers with increases that are significantly higher than average are: GloBird, Covau, Diamond and Tango Energy (see chart 9). Chart 9 Percentage changes to standing offers taking effect in January 2019 in the Citipower network - Calculations based annual bills for customers on a single rate tariff and annual consumption of 4,800kWh st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Blue NRG CP Avg In the Powercor network, the average increase is also 1.4%. Retailers with increases that are higher than average are: Covau, GloBird, Diamond and Tango Energy (see chart 10). 7

13 Chart 10 Percentage changes to standing offers taking effect in January 2019 in the Powercor network - Calculations based annual bills for customers on a single rate tariff and annual consumption of 4,800kWh st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Blue NRG PC Avg In the Ausnet network, the average increase is 1.3%. Retailers with increases that are significantly higher than average are: Covau, GloBird, Diamond and Tango Energy (see chart 11). Chart 11 Percentage changes to standing offers taking effect in January 2019 in the Ausnet network - Calculations based annual bills for customers on a single rate tariff and annual consumption of 4,800kWh st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Blue NRG Aus Avg In the Jemena network, the average increase is 1%. Retailers with increases that are higher than average are: Covau, GloBird, Tango Energy and Diamond (see chart 12). 8

14 Chart 12 Percentage changes to standing offers taking effect in January 2019 in the Jemena network - Calculations based annual bills for customers on a single rate tariff and annual consumption of 4,800kWh st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Blue NRG Jen Avg In the United Energy network, the average increase is 1.5%. Retailers with increases that are higher than average are: GloBird, Diamond, Covau and Tango Energy (see chart 13). Chart 13 Percentage changes to standing offers taking effect in January 2019 in the United Energy network - Calculations based annual bills for customers on a single rate tariff and annual consumption of 4,800kWh st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Blue NRG UE Avg Retailers are allowed to change their standing offers every 6 months but only one retailer,, changed their offers twice in the last year. 1.2 Gas standing offers January 2018 January 2019 There are three gas distributors and eight main gas zones. The distributors are Multinet, Envestra/ Australian Gas Network and Ausnet. The gas zones are: Multinet 1/Origin Metro, Multinet 2/ South, Envestra North/Origin North, Envestra Central 2/TRU East, Envestra Central 1/Origin South East, Ausnet West/TRU West, Ausnet Central 2/ North and Ausnet Central 1/TRU Central. The names of the gas zones derive from when, Origin and TRU (now Energy Australia) were energy retailers with designated areas. These three retailers are not distribution businesses and they are not involved in setting the distribution charges in these areas. The companies names are merely used as a descriptor for the various gas zones that Multinet, Envestra/Australian Gas Network and Ausnet distribute gas to. There are also some smaller rural zones (such as Mildura) that are not included in the Tariff-Tracking tool. Chart 14 shows that households experience price changes of between 1 to 5% in January Energy Australia s prices have increased while s prices have decreased slightly. s prices remained unchanged. 9

15 Chart 14 Changes (%) to incumbent retailers standing offers from January 2018 to January Calculations based an annual consumption of 63,000Mj Percentage (%) changes Multi 1 Multi 2 Envestra North Envestra Central 2 Envestra Central 1 Ausnet West Ausnet Central 2 Ausnet Central 1 Origin EA Charts below show the incumbent retailers gas standing offer as of January 2018 and January Chart 15 Changes to s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based an annual consumption of 63,000Mj 1,900 1,800 1,700 Jan'17 Jan'19 $ per annum 1,600 1,500 1,400 1,300 1,200 1,100 Multi 1 Multi 2 Envestra North Envestra Envestra Central 2 Central 1 Gas zones Ausnet West Ausnet Ausnet Central 2 Central 1 Chart 16 Changes to Origin s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based an annual consumption of 63,000Mj 1,900 1,800 1,700 Jan'18 Jan'19 $ per anum 1,600 1,500 1,400 1,300 1,200 1,100 Multi 1 Multi 2 Envestra North Envestra Envestra Central 2 Central 1 Gas zones Ausnet West Ausnet Ausnet Central 2 Central 1 10

16 Chart 17 Changes to Energy Australia s standing offers (as annual bills, inc GST) from January 2018 to January Calculations based an annual consumption of 63,000Mj $ per annum 2,200 1,800 1,600 1,400 Jan'18 Jan'19 1,200 Multi 1 Multi 2 Envestra North Envestra Envestra Central 2 Central 1 Gas zones Ausnet West Ausnet Ausnet Central 2 Central 1 Five of the 2nd tier retailers have also increased their gas standing offers but the size of the increases varies significantly. Chart 18 compares annual bills as of January 2018 to January 2019 for 13 retailers in the Multinet 1/Origin metro gas zone. It shows that in addition to Energy Australia, Covau, Momentum, Alinta and increased their gas standing offer prices. Chart 18 Changes to standing offers (as annual bills, inc GST) from January 2018 to January 2019 in the Multinet 1/Origin Metro gas zone - Calculations based an annual consumption of 63,000Mj $ per annum 2,400 2,200 1,800 1,600 Jan'18 Jan'19 1,400 1,200 Covau On average, across all retailers, gas standing offer prices increased by 2.1% in the Multinet 1/Origin Metro gas zone. Covau and Momentum s increases of 9.5% are thus significantly higher than the average. 2. Market offers As many retailers gazetted new standing offers to take effect post 1 January 2018, many retailers have also amended their market offers. The size of the discounts offered continues to be very high but most of them are conditional upon bills being paid on time. 2.1 Electricity market offers post July The price-spread, or the difference between the best market offer and the worst standing offer (as well as the differences between market offers), will change somewhat throughout the year but as of January 2019: 16 The market offers were collected from the retailers websites in mid-january 2019 and it should be noted that retailers may change their rates at any time. 11

17 Typical consumption households (4,800kWh) can save $1,800 - $2,270 per annum (depending on their network area) if switching from the worst standing offer to the best market offer. 17 The greatest potential annual saving is in Ausnet s network area (approximately $2,270). 18 The difference between the best and the worst market offers ranges from just over $700 per annum (in Citipower s area) to $950 (in Ausnet s area) for customers with typical consumption levels. 19 Table 1 below shows additional discounts applicable to the electricity retailers published market offer rates. Some of the retailers have multiple market offers and may offer higher (or lower) discounts than those listed here. However, if the discount is higher the length of the contract term is typically longer. In other cases, the discount might be higher, but the customer must agree to pay by direct debit. 20 Table 1 Electricity market offer features January Retailer Name Effective from Guaranteed discount Pay on time discount Contract term/ benefit period 1st Energy Market Offer 10/12/18 no 20% off usage no no Savers 1/1/19 no 33% off usage 12 months no Fair Savers 12/1/19 30% off usage no 12 months no Garnet 3/12/18 no 27% off bill no no Commander Market offer 1/10/17 no 20% off usage no no Smart Saver 1/1/19 no 30% off usage 12 months no Diamond Energy Pay on time discount 1/1/18 no 7% off bill 24 months no ^ Dodo Electricity 23/2/18 no no no no Anytime Saver 13/12/18 32% off usage no 12 months no Glosave 8/12/18 no 34% off bill no no Value 19/12/17 no 3% off bill no no SmilePower 1/1/19 no 20% off usage 12 months no Saver 1/1/19 no 20% off usage 12 months no Tango Energy Home Select 5/2/18 no no 12 months no People Energy^ On time saver 1/7/17 no 20% off usage no no Powerdirect Market Offer 1/1/19 no 41% off usage 12 months no * Autopay with Power Saver 1/7/18 no 19.5% off bill no no Q Energy Flexi Saver Home 1/1/19 no no 24 months no Living Energy Saver 1/1/19 no 10% off bill no no Plus 26/9/18 no 40% off usage 24 months no Pay on time 1/12/18 no 43% off usage 12 months no Electricity as you go 14/1/19 no no no no ^ Additional discounts for direct debit, e-billing or dual fuel customers may apply * s conditional discount is not based on pay on time but it does require customers to actively purchase special deals Early termination fee Potential savings - Differences between electricity offers Typical consumption households (4,800kWh per annum) on the worst standing offers can save around $1,800 - $2,270 per annum if switching to the best published market offer (depending on their network 17 Based on the worst of the retailers standing offer (single rate) and the best of the published market offers (including additional discounts and/or pay on time discounts). 18 Ibid. 19 Households using 4,800kWh per annum (single rate) and all market offer bills include additional discounts and/or pay on time discounts. 20 Dodo, for example, has a direct debit discount where customers receive a 30% discount off the market offer electricity rates. This discount is not included in the bill calculations presented in this report. 21 Most retailers have more than one market offer product. The offers used for this analysis are those we deem on-going, key products with as few conditions (i.e. direct debit, e-billing and exit fees) as possible. These market offers are features have been published on the retailers websites in mid-january

18 area). 22 This is less compared to last year (January 2018) and the difference between the worst and the best market offers is also reducing. Customers on the best market offer will pay approximately $700 - $950 less per annum compared to customers on the worst market offer. It should be stressed that the majority of these discounts are conditional on bills being paid on time and households with cash-flow issues thus may find themselves unable to achieve the annual bills estimated for some of the best offers included in the charts below. Chart 19 below shows the retail market offer price-spread within each of the five network areas. 23 Chart 19 Maximum price-spread for market offers in each network area January 2019 (incl GST), including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) $ per annum 2,600 2,400 2,200 1,800 1,600 1,400 1,200 CP PC SP Jen UE Charts below show annual retail bills for typical consumption (4,800kWh per annum, single rate) for each of the five network areas. The blue columns to the left represent the standing offer bill, the red columns are the market offers including guaranteed discounts (but not pay on time discounts) while the green columns are market offer bills including pay on time discounts. 24 Citipower In Citipower s area, average consumption households on the worst standing offer can save approximately $1,800 per annum if switching to the best published market offer. Tango Energy is the retailer that currently offers the best market offer rates in this area. Chart 20 Citipower s network area: Estimated annual bills (incl GST) for electricity standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) 3,500 3,000 2,500 1,500 Standing Market (ex POT) Market (inc POT) 1st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Retail offers in Citipower's area 22 Based on market offer bills that include guaranteed discounts and pay on time discounts. 23 Households using 4,800kWh per annum (single rate) and all market offer bills include guaranteed discounts and/or pay on time discounts. 24 Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in table 1. Note that Tango Energy was previously known as Pacific Hydro. 13

19 The difference between the best and the worst market offer is also significant. Tango Energy s offer is approximately $700 less than Dodo s market offer post discounts (and pay on time discounts) for households with this consumption level. Figure 1 below shows estimated annual bills for market offers post discounts in Citipower s network area. 25 Figure 1 Citipower s network area: Lowest to highest annual bills (incl GST) for market offers in January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) Tango Energy $1,150 $1,257 Powerdirect 1st Energy Commander Diamond Energy Q Energy People Energy $1,282 $1,332 $1,334 $1,335 $1,394 $1,404 $1,422 $1,433 $1,444 $1,483 $1,559 $1,569 $1,581 $1,609 $1,642 $1,644 $1,664 $1,740 $1,845 $1, Bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate). These bill estimates are based on rates published on the retailers websites on mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 14

20 Powercor In Powercor s network area, average consumption households on the worst standing offer can save $2,320 per annum if switching to the best published market offer. Tango Energy is again the retailer that currently offers the best market offer rates. Chart 21 Powercor s network area: Estimated annual bills (incl GST) for electricity standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) 3,500 3,000 2,500 Standing Market (ex POT) Market (inc POT) 1,500 1st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Retail offers in Powercor's area Q Energy The difference between the best and the worst market offers is more than that of Citipower s network area. Tango Energy s offer is $885 less than Dodo s market offer post discounts for households with this consumption level. Figure 2 below shows estimated annual bills for market offers post discounts in Powercor s network area Bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate). These bill estimates are based on rates published on the retailers websites on mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 15

21 Figure 2 Powercor s network area: Lowest to highest annual bills (incl GST) for market offers in January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) Tango Energy $1,279 $1,355 Powerdirect 1st Energy Diamond Energy Commander Q Energy People Energy $1,396 $1,460 $1,467 $1,487 $1,516 $1,516 $1,566 $1,578 $1,583 $1,649 $1,668 $1,767 $1,770 $1,804 $1,809 $1,821 $1,834 $1,841 $2,158 $2,164 16

22 Ausnet In Ausnet s network area, average consumption households on the worst standing offer can save approximately $2,270 per annum if switching to the best published market offer. Tango Energy is the retailer with the best market offer rates in this network area. Chart 22 Ausnet s network area: Estimated annual bills (incl GST) for electricity standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) 4,000 3,500 3,000 2,500 1,500 Standing Market (ex POT) Market (inc POT) 1st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Retail offers in Ausnet's area Q Energy As in other network areas, the difference between the best and the worst market offers is significant. Tango Energy s offer is approximately $950 less per annum than Dodo s market offer post discounts for households with this consumption level. Figure 3 below shows estimated annual bills for market offers post discounts in Ausnet s network area Bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate). These bill estimates are based on rates published on the retailers websites on mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 17

23 Figure 3 Ausnet s network area: Lowest to highest annual bills (incl GST) for market offers in January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) Tango Energy Powerdirect $1,427 $1,460 $1,503 1st Energy Diamond Energy Commander Q Energy People Energy $1,533 $1,591 $1,594 $1,638 $1,642 $1,658 $1,675 $1,716 $1,767 $1,842 $1,860 $1,918 $1,965 $1,968 $1,996 $2,068 $2,208 $2,349 $2,376 18

24 Jemena In Jemena s network area, average consumption households on the worst standing offer can save approximately $1,990 per annum if switching to the best published market offer. Tango Energy is the retailers with the best market offer rates in this network area Chart 23 Jemena s network area: Estimated annual bills (incl GST) for electricity standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) 3,500 3,000 2,500 Standing Market (ex POT) Market (inc POT) 1,500 1st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Retail offers in Jemena's area Q Energy The difference between the best and the worst market offers is $870 per annum. Tango Energy has the best value market offer rates and, again, Dodo has the worst. Figure 4 below shows estimated annual bills for market offers post discounts in Jemena s network Bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate). These bill estimates are based on rates published on the retailers websites on mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 19

25 Figure 4 Jemena s network area: Lowest to highest annual bills (incl GST) for market offers in January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) Tango Energy $1,262 $1,351 $1,376 Powerdirect 1st Energy Q Energy Diamond Energy Commander People Energy $1,400 $1,435 $1,447 $1,489 $1,490 $1,524 $1,526 $1,586 $1,587 $1,615 $1,664 $1,707 $1,714 $1,740 $1,745 $1,784 $1,789 $2,094 $2,131 20

26 United Energy In United Energy s network area, average consumption households on the worst standing offer can save $1,835 per annum if switching to the best published market offer. Tango Energy is again the retailer with the best market offer rates in this network area. Chart 24 United Energy s network area: Estimated annual bills (incl GST) for electricity standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) 3,500 3,000 2,500 1,500 Standing Market (ex POT) Market (inc POT) 1st Energy Commander Diamond Energy Tango Energy People Energy Powerdirect Q Energy Retail Offers in United Energy's area As in other network areas, the difference between the best and the worst market offers is significant. Tango Energy s offer is approximately $820 less per annum than Dodo s market offer post discounts for households with this consumption level. Figure 5 below shows estimated annual bills for market offers post discounts in United Energy s network area Bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate). These bill estimates are based on rates published on the retailers websites on mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 21

27 Figure 5 United Energy s network area: Lowest to highest annual bills (incl GST) for market offers in January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate) Tango Energy $1,197 $1,279 $1,302 Powerdirect 1st Energy Diamond Energy Commander Q Energy People Energy $1,320 $1,369 $1,406 $1,440 $1,465 $1,478 $1,481 $1,483 $1,543 $1,615 $1,637 $1,688 $1,690 $1,699 $1,744 $1,754 $1,835 $1,956 $2,017 22

28 2.2.1 Changes to electricity market offers While not all retailers changed their market offers in January 2019, some decreased their rates while others increased. Q Energy, GloBird and Alinta are the retailers with the greatest price increases while Simply,, Powerdirect, Lumo, 1st Energy and had the greatest price decreases. Charts below show retailers market offers (as annual bills) as of July 2018 and January 2019, as well as percentage changes, for each network area. Chart 25 Citipower s network area: Changes to annual bills for electricity market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate), incl. GST 1,800 1,600 1,400 1, , % -4.4% +18.4% 1st Energy +9.4% Commander Diamond Energy -3.6% +5.6% +26.8% +2.1% -6.5% Jul-18 Tango Energy Jan % +44.6% People Energy Powerdirect Q Energy -9.2% -5.3% Chart 26 Powercor s network area: Changes to annual bills for electricity market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate), incl. GST 1, % -4.6% +18.6% +8.4% +2.1% +28.8% -2.7% -3.0% +5.7% +37.3% -5.7% -9.0% -5.3% st Energy Commander Diamond Energy Jul-18 Tango Energy Jan-19 People Energy Powerdirect Q Energy 23

29 Chart 27 Ausnet s network area: Changes to annual bills for electricity market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate), incl. GST 2,500 1, % +18.8% -4.3% +1.5% +12.7% +2.7% +5.7% +27.1% +2.1% -0.9% +49.8% -5.3% -5.6% -4.9% +7.9% st Energy Commander Diamond Energy Jul-18 Tango Energy Jan-19 People Energy Powerdirect Q Energy Chart 28 Jemena s network area: Changes to annual bills for electricity market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate), incl. GST 2,500 1, % -4.6%+18.8% +8.3% -2.0% +6.1% +2.2% +26.7% -6.2% +23.2% -5.8% -5.7%-5.5% -5.3% Chart 29 United Energy s network area: Changes to annual bills for electricity market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 4,800kWh per annum (single rate), incl. GST ,500 1,500 1st Energy -5.2% -4.5% +18.3% Commander Diamond Energy +10.3% Jul-18 Tango Energy Jan % +2.2% +32.9% +6.1% -6.4% People Energy Powerdirect Q Energy +47.3% -5.8% -8.6% +4.0% -5.3% st Energy Commander Diamond Energy Jul-18 Tango Energy Jan-19 People Energy Powerdirect Q Energy 24

30 2.2 Gas market offers January Typical consumption households (63,000Mj) can save $670 - $1,050 per annum (depending on their gas zone) if switching from the worst standing offer to the best market offer. 31 The greatest potential savings are in the AGN North/Origin North gas zone (Northern and Central Victoria). 32 The difference between the best and the worst market offers ranges from $310 per annum (Ausnet West/Tru West gas zone) to $570 (Multinet 1/Origin Metro gas zone) for customers with typical consumption levels. 33 Chart 30 below shows the retail market offer price-spread within each of the eight main gas pricing zones. Chart 30 Maximum price-spread in each pricing zone January 2019 (incl GST), including discounts and pay on time discounts - Households consuming 63,000Mj per annum $ per annum 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 Multi 1 Multi 2 AGN North AGN AGN Central 2 Central 1 Ausnet West Ausnet Ausnet Central 2 Central 1 As with electricity, additional discounts apply to the gas market offer rates. The majority of these discounts are now conditional on the customer paying the bill by the due date. Table 2 below shows additional discounts applicable to the gas retailers published market offer rates. Table 2 Gas market offer features January Retailer Name Effective from Guaranteed discount Pay on time discount Contract term/ benefit period Savers 14/1/19 no 24% off usage 12 months no Fair Saver 12/1/19 20% off usage no 12 months no Burgundy 3/12/18 no 26% off bill no no Smart Saver 1/1/19 no 16% off usage 12 months no ^ Market offer 23/2/18 no no no no Anytime Saver 2/1/19 22% off usage no 12 months no Value 1/1/19 no 3% off bill no no Savers 14/1/19 no 24% off usage 12 months no Early termination fee 30 These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. Additional discounts for customers choosing to pay by direct debit are not included in these bill calculations. 31 Based on the worst of the retailers standing offer and the best of the published market offers (including additional discounts and/or pay on time discounts). 32 Ibid. 33 Households using 63,000Mj per annum. All market offer bills include additional discounts and/or pay on time discounts. 34 Most retailers have more than one market offer product. The offers used for this analysis are those we deem on-going, key products with as few conditions (i.e. direct debit, e-billing and exit fees) as possible. These bill estimates are based on rates published on the retailers websites in mid-january

31 Fair Saver 12/1/19 20% off usage no 12 months no Burgundy 3/12/18 no 26% off bill no no Smart Saver 1/1/19 no 16% off usage 12 months no ^ Market offer 23/2/18 no no no no Anytime Saver 2/1/19 22% off usage no 12 months no Value 1/1/19 no 3% off bill no no Market offer 1/1/19 no no no no Saver 1/1/19 no 13% off usage 12 months no Easy Saver 1/1/19 no 10% off bill no no Plus 26/9/18 no 26% off usage 24 months no Pay on time 1/5/18 no 25% off usage 12 months no Gas as you go 14/1/19 no no no no GloSave 15/11/18 no 32% off usage no no * Autopay with Gas Saver 9/5/18 no 5% off bill no no ^ Additional discounts for direct debit, e-billing or dual fuel customers may apply * s conditional discount is not based on pay on time but it does require customers to actively purchase special deals Potential savings - Differences between gas offers Typical consumption households (63,000Mj per annum) on the worst standing offer can save $670 - $1,050 per annum if switching to the best published market offer (depending on their gas zone). Charts below show annual retail bills for typical consumption (63,000Mj per annum) for each of the eight main gas zones. The blue columns to the left represent the standing offer bill, the red columns are the market offers including guaranteed discounts (but not pay on time discounts) while the green columns are market offer bills including pay on time discounts. 35 As only ten of the fifteen retailers offer gas as a stand alone product, figures 6-13 below, which rank gas market offers according to size of annual bill, do not include retailers that only offer gas in conjunction with electricity contracts. 36 Multinet 1/Origin Metro Gas Zone In the Multinet 1 gas zone, average consumption households on the worst standing offer can save approximately $885 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone. Chart 31 Multinet 1/Origin Metro gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 37 2,600 2,400 2,200 1,800 1,600 1,400 1,200 Standing Market (ex POT) Market (incl POT) 800 Covau Retail offers in Multinet 1 gas zone GloBird 35 Based on market offer bills that include discounts and pay on time discounts. 36 As a retailer with good value gas rates can have expensive electricity rates (and vice versa), we seek to focus on retail offers available to customers independently from other products. 37 Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 26

32 Figure 6 below shows estimated annual bills for stand alone gas market offers post discounts in the Multinet 1 gas zone. The difference between the best (Red) and the worst (Dodo) is approximately $440 per annum. $1,393 $1,409 $1,438 $1,439 $1,446 $1,476 $1,477 $1,513 $1,537 $1,550 Figure 6 Multinet 1/Origin Metro gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 38 $1,551 $1,615 $1,686 $1,823 $1,834 Multinet 2/ South Gas Zone In the Multinet 2 gas zone, average consumption households on the worst standing offer can save approximately $905 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone. Standing Market (ex POT) Market (incl POT) Chart 32 Multinet 2/ South gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 39 2,600 2,400 2,200 1,800 1,600 1,400 1, Covau Retail offers in Multinet 2 gas zone GloBird 38 These bill estimates are based on rates published on the retailers websites in mid-january Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 27

33 Figure 7 below shows estimated annual bills for stand alone gas market offers post discounts in the Multinet 2 gas zone. The difference between the best (Red) and the worst (Covau) is approximately $450 per annum. $1,372 $1,396 Figure 7 Multinet 2/ South gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 40 $1,439 $1,442 $1,456 $1,476 $1,492 $1,513 $1,537 $1,550 $1,551 $1,615 $1,686 $1,745 $1,823 AGN North/Origin North Gas Zone In the AGN North gas zone, average consumption households on the worst standing offer can save approximately $1,050 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone. Chart 33 AGN North/Origin North gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 41 2,600 2,400 2,200 1,800 1,600 1,400 1,200 Standing Market (ex POT) Market (incl POT) 800 Covau Retail offers in AGN North gas zone GloBird 40 These bill estimates are based on rates published on the retailers websites in mid-january Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 28

34 Figure 8 below shows estimated annual bills for stand alone gas market offers post discounts in the AGN North gas zone. The difference between the best (Sumo) and the worst (Dodo) is approximately $570 per annum. $1,351 $1,456 $1,458 $1,479 $1,483 $1,509 Figure 8 AGN North/Origin North gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 42 $1,527 $1,533 $1,556 $1,566 $1,566 $1,633 $1,696 $1,777 $1,923 AGN Central 2/Tru East Gas Zone In the AGN Central 2 gas zone, average consumption households on the worst standing offer can save approximately $1,270 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone. Chart 34 AGN Central 2/Tru East gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 43 2,600 2,400 2,200 1,800 1,600 1,400 1,200 Standing Market (ex POT) Market (incl POT) 800 Covau Retail offers on AGN Central 2 gas zone GloBird 42 These bill estimates are based on rates published on the retailers websites in mid-january Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 29

35 Figure 9 below shows estimated annual bills for stand alone gas market offers post discounts in the AGN Central 2 gas zone. The difference between the best () and the worst (Dodo) is approximately $400 per annum. $1,407 $1,433 Figure 9 AGN Central 2/Tru East gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 44 $1,441 $1,458 $1,462 $1,511 $1,544 $1,554 $1,556 $1,566 $1,586 $1,616 $1,713 $1,759 $1,811 AGN Central 1/Origin South East Gas Zone In the AGN Central 1 gas zone, average consumption households on the worst standing offer can save approximately $945 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone. Chart 35 AGN Central 1/Origin South East gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 45 2,600 2,400 2,200 1,800 1,600 1,400 1,200 Standing Market (ex POT) Market (incl POT) 800 Covau Retail offers in AGN Central 1 gas zone GloBird 44 Only retailers that offer stand-alone gas contracts have been included in this figure. These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. 45 Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 30

36 $1,433 $1,451 $1,458 $1,462 $1,474 Figure 10 shows estimated annual bills for stand alone gas market offers post discounts in the AGN Central 1 gas zone. The difference between the best (Red) and the worst (Dodo) is approximately $460 per annum. Figure 10 AGN Central 1/Origin South East gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 46 $1,511 $1,536 $1,554 $1,556 $1,566 $1,586 $1,616 $1,713 $1,759 $1,894 Ausnet West/Tru West Gas Zone In the Ausnet West gas zone, average consumption households on the worst standing offer can save approximately $670 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone, however, as offer gas in conjunction with an electricity contract it should be noted that the best stand-alone gas offer is GloBird s. Chart 36 Ausnet West/Tru West gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 47 2,600 2,400 2,200 1,800 1,600 1,400 1,200 Standing Market (ex POT) Market (incl POT) 800 Covau GloBird Retail offers in Ausnet West gas zone 46 Only retailers that offer stand-alone gas contracts have been included in this figure. These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. 47 Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 31

37 Figure 11 below shows estimated annual bills for stand alone gas market offers post discounts in the Ausnet West gas zone. The difference between the best (GloBird) and the worst () is approximately $300 per annum. $1,334 $1,342 $1,370 $1,382 $1,382 $1,416 $1,419 $1,431 $1,442 Figure 11 Ausnet West/Tru West gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 48 $1,457 $1,495 $1,512 $1,611 $1,645 Ausnet Central 2/ North Gas Zone In the Ausnet Central 2 gas zone, average consumption households on the worst standing offer can save approximately $920 per annum if switching to the best published market offer. is the retailer with the best market offer rates in this gas zone, however, as only offer gas in conjunction with an electricity contract it should be noted that the best stand-alone gas offer is GloBird s. Standing Market (ex POT) Market (incl POT) Chart 37 Ausnet Central 2/ North gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 49 2,600 2,400 2,200 1,800 1,600 1,400 1, Covau Retail offers in Ausnet Central 2 gas zone GloBird 48 Only retailers that offer stand-alone gas contracts have been included in this figure. These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. 49 Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table 2. 32

38 Figure 12 below shows estimated annual bills for stand alone gas market offers post discounts in the Ausnet Central 2. The difference between the best (GloBird) and the worst (Covau) is approximately $390 per annum. $1,383 $1,421 $1,457 $1,484 $1,485 $1,495 $1,511 Figure 12 Ausnet Central 2/ North gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 50 $1,537 $1,567 $1,567 $1,573 $1,598 $1,705 $1,801 $1,810 Ausnet Central 1/Tru Central Gas Zone In the Ausnet Central 1 gas zone, average consumption households on the worst standing offer can save approximately $925 per annum if switching to the best published market offer. is again the retailer with the best market offer rates in this gas zone, however, as only offer gas in conjunction with an electricity contract it should be noted that the best stand-alone gas offer is Red Energy s. 50 Only retailers that offer stand-alone gas contracts have been included in this figure. These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. 33

39 Chart 38 Ausnet Central 1/Tru Central gas zone: Estimated annual bills (incl GST) for gas standing and market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 51 2,600 2,400 2,200 1,800 1,600 1,400 1, Standing Market (ex POT) Market (incl POT) Covau Retail offers in Ausnet Central 1 gas zone GloBird Figure 13 below shows estimated annual bills for stand alone gas market offers post discounts in the Ausnet Central 1 gas zone. The difference between the best () and the worst (Covau) is approximately $400 per annum. Figure 13 Ausnet Central 1/Tru Central gas zone: Lowest to highest annual bills (incl GST) for market offers January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum 52 $1,379 $1,408 $1,421 $1,484 $1,491 $1,508 $1,509 $1,537 $1,567 $1,567 $1,594 $1,598 $1,705 $1,810 $1, Discounts (excluding GST) have been applied to consumption and/or total bill as per offers listed in the table Only retailers that offer stand-alone gas contracts have been included in this figure. These bill estimates are based on rates published on the retailers websites in mid-january 2019 and it must be noted that retailers may change their rates at any time. 34

40 2.2.2 Changes to gas market offers While some retailers did not change their gas market offers in January 2019, some decreased their rates while others increased theirs. Energy Australia, Alinta, Momentum and Covau are the retailers with the greatest price increases while had the greatest price decreases. Charts below show retailers market offers (as annual bills) as of July 2018 and January 2019, as well as percentage changes, for each gas zone. Chart 39 Multinet 1 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +12.0% +6.9% +2.2% +19.1% +6.4% +11.2% -28.4% +2.2% -0.4% Covau Jul-18 Jan-19 Chart 40 Multinet 2 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +13.6% +6.9% +19.1% +6.1% +11.2% -28.4% +2.2% -0.4% Covau Jul-18 Jan-19 35

41 Chart 41 AGN North gas zone: Changes Chart 41 to AGN annual North bills gas for zone: gas market offers Changes from to July annual 2018 bills to January for gas 2019, including market offers discounts from and July pay 2018 on to time discounts January 2019, - Households including consuming discounts and pay on time discounts - 63,000Mj per annum, incl. GST Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +11.9% +2.8% +18.8% +5.8% +9.8% -28.4% -3.3% Covau Jul-18 Jan-19 Chart 42 AGN Central 2 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +12.8% +5.1% +18.8% -28.4% +5.2% +13.0% -3.3% Covau Jul-18 Jan-19 Chart 43 AGN Central 1 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +11.3% +5.1% -28.4% +18.8% +6.0% +13.0% -3.3% Covau Jul-18 Jan-19 36

42 Chart 44 Ausnet West gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +12.8% +5.5% +17.9% +5.1% +2.4% -28.4% +9.6% Covau Jul-18 Jan-19 Chart 45 Ausnet Central 2 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +13.3% +6.2% +18.6% +3.9% +7.8% -28.4% +9.6% Covau Jul-18 Jan-19 Chart 46 Ausnet Central 1 gas zone: Changes to annual bills for gas market offers from July 2018 to January 2019, including discounts and pay on time discounts - Households consuming 63,000Mj per annum, incl. GST 2,500 1, % +14.0% +6.2% -28.4% +18.6% +4.8% +7.8% +9.6% Covau Jul-18 Jan-19 37

43 2.3 Solar market offers January 2019 The maximum price-spread is around $515 in Ausnet, $475 in Jemena and Powercor s areas, $460 in United Energy and $420 in Citipower. 53 Depending on network area, Melbourne solar customers with a 3kW system installed would on average pay between $865 and $900 less per annum compared to non-solar households. 54 Non-metropolitan households would on average pay between $990 and $1,080 less per annum compared to non-solar households. 55 While many solar customers currently receive a solar feed in rate (FIT) of 60 cents (the premium FIT scheme), this scheme is closed to new entrants and new solar customers should therefore carefully assess both the retailers FIT rates as well as the cost of electricity imported when choosing a solar offer. 56 This section analyses and compares market offer bills for Victorian customers with 1.5 kw and 3 kw systems installed. As retailers are not required to publish rates for solar products purchased and installed through them, this analysis only examines electricity offers available to customers independently of solar panels and installation. Methodology and assumptions To calculate the annual bills for the various solar market offers the following assumptions and methodology have been applied: An annual household consumption of 4,800kWh (including both produced and imported). Calculations have been produced for households with 1.5 kw and 3 kw systems only. For Melbourne households, an annual generation capacity per kw installed of MWh and an export rate of 47.4% for 3 kw systems and 14.9% for 1.5 kw systems. 57 For non-metropolitan households, an annual generation capacity per kw installed of MWh and an export rate of 54.8% for 3 kw systems and 26.8% for 1.5 kw systems. 58 Only FIT rates available to new customers have been included. Retailer funded FIT rates have been applied as per offer (see table 3 below). A flat annual consumption has been assumed. The annual bills have been based on quarterly bill calculations and all step increases have been applied as quarterly thresholds (including when the retail offer refers to daily or monthly thresholds). Daily fixed charges have been multiplied by 91 to calculate the quarterly amount. 53 Based on the worst and the best of the published market offers for single rate customers using 4,800 kwh per annum and a 3kW solar system installed. Bills include additional discounts and/or pay on time discounts and FIT, 3kW solar system. 54 Ibid. 55 Ibid. 56 Approximately 88,000 households, small businesses and community groups are on the PFIT scheme and the 60 cents rate is set to last until 2024 see 57 These figures are based analysis presented in a report for the Alternative Technology Association (ATA) by Alviss Consulting (Alviss Consulting, Retail Offers and Market Transparency for New Solar Customers, June 2013). 58 Ibid. 38

44 Table 3: Retailers FIT rates Retailer* Offer FIT rate (c/kwh) Solar Savers 20 Fair Saver 11.3 Solar 18 Commander Market offer 11.6 Diamond Energy Pay on time discount 12 Market offer 11.6 ^ Anytime Saver 9.9 Glosave 10 Value 11.3 SmilePower 9.9 Solar Boost 20 Tango Energy Home Select 11.3 Powerdirect Market offer 11.3 Autopay with Power Saver 11.8 Living Energy Saver 11.3 Plus 11.3 Pay on time 9.9 Solar as you go 20 Smart Saver Solar 11.3 * 1st Energy, People Energy and Q Energy do not offer market offer contracts to solar customers in Victoria ^ Note that Energy Australia offers a three part time-varying feed-in-tariff to solar customers on a Time of Use (TOU) tariff. The time-varying FIT rate is 7.1 c/kwh for electricity exported at peak times, 29 c/kwh at off-peak times and 10.3 c/kwh shoulder times. Chart 47 below compares annual retail bills for solar customers in Melbourne (Citipower) with 3 kw and 1.5 kw installed. It shows that for this consumption level, the average market offer bill for households in this area with a 3kW system installed is $665 and that is $865 less than the average market offer bill for non-solar customers (see chart 20 in section above). Households with a 1.5 kw system installed will typically have an annual bill of $1,030. Melbourne (Citipower) solar customers with 3 kw systems (and this consumption level) would be approximately $420 per annum better off on Tango s offer compared to Covau s. Chart 47 also shows that, Click, Origin and s offers produce annual bills that are above average for 1.5 kw systems despite having the highest FIT rates (20, 18, 20 and 20 c/kwh respectively). This highlights the importance of solar customers not choosing retail offers based on FIT rates alone. Chart 47 Annual bills including discounts and FIT credits for Melbourne/Citipower customers with 3 kw and 1.5 kw solar systems. Electricity offers in January 2019 as annual bills, Single rate, 4,800kWh (GST inc). 59 1,300 1, Calculations include discounts off usage or bill as well as pay on time discounts off usage or bill kw 1.5 kw 3 kw avg 1.5 kw avg Commander Diamond Energy Tango Energy Powerdirect

45 Chart 48 below shows annual bills for Melbourne solar customers in the Jemena network. It shows that for this consumption level, the average market offer bill for households in this area with a 3kW system installed is $715 and that is $905 less than the average market offer bill for non-solar customers (see chart 23 in section above). Households with a 1.5 kw system installed will have an annual bill of $1,095. Chart 48 Annual bills including discounts and FIT credits for Melbourne/Jemena customers with 3 kw and 1.5 kw solar systems. Electricity offers in January 2019 as annual bills, Single rate, 4,800kWh (GST inc). 60 1,500 1,300 1, ,500 1,300 1, kw 1.5 kw 3 kw avg 1.5 kw avg Commander Diamond Energy Tango Energy Powerdirect Chart 49 below shows annual bills for Melbourne solar customers in the United Energy network. It shows that for this consumption level, the average market offer bill for households in this area with a 3kW system installed is $685 and that is $885 less than the average market offer bill for non-solar customers (see chart 24 in section above). Households with a 1.5 kw system installed will have an annual bill of $1,065. Chart 49 Annual bills including discounts and FIT credits for Melbourne/United Energy customers with 3 kw and 1.5 kw solar systems. Electricity offers in January 2019 as annual bills, Single rate, 4,800kWh (GST inc) kw 1.5 kw 3 kw avg 1.5 kw avg Commander Diamond Energy Tango Energy Powerdirect Homes outside Melbourne s metropolitan area will typically have less overshadowing and therefore a higher generation capacity and export rate. Chart 50 compares annual retail bills for non-metropolitan solar customers with 3 kw systems in four network areas (Jemena, United, Powercor and Ausnet). It shows that the average annual bill for non-metropolitan solar customers with this consumption level is approximately $610 in Jemena, $580 in United, $665 in Powercor and $720 in Ausnet. The average annual bill is $990 to $1,080 lower than the annual bill for non-solar customers (see section above for nonsolar customers). 60 Ibid. 61 Ibid. 40

46 Chart 50 Annual bills including discounts and FIT credits for nonmetropolitan customers in Jemena, United Energy, Powercor and Ausnet with 3 kw solar systems. Electricity offers in January 2019 as annual bills, Single rate, 4,800kWh (GST inc). 62 1, Jemena United Powercor Ausnet Commander Diamond Energy Tango Energy Powerdirect Figures below show estimated annual bills for solar market offers including FIT and discounts for Melbourne customers in Citipower, Jemena and United Energy s networks and non-metropolitan customers in the Powercor and Ausnet networks (all based on 3 kw systems). 63 The maximum pricespread is around $515 in Ausnet, $470 in Jemena and Powercor s areas, $460 in United Energy and $420 in Citipower. 62 Ibid. 63 These bill estimates are based on rates published on the retailers websites in mid-january Bill calculations include guaranteed discounts and pay on time discount but any additional discounts for customers choosing to pay by direct debit are not included. Annual consumption of 4,800kWh annum (including both produced and imported), single rate, and GST inclusive. Note that Tango Energy was formerly known as Pacific Hydro. 41

47 Figure 13 Lowest to highest annual bills (incl GST) for solar market offers in January 2019 in the Citipower network Figure 14 Lowest to highest annual bills (incl GST) for solar market offers in January 2019 in the Jemena network Figure 15 Lowest to highest annual bills (incl GST) for solar market offers in January 2019 in the United Energy network Tango Energy $480 Tango Energy $521 Tango Energy $491 $547 $557 $507 $550 $596 $548 $579 $598 $581 Powerdirect $591 $613 $589 $593 $627 Powerdirect $598 $607 $647 $604 $610 $649 $608 $640 $662 $610 $652 Powerdirect $664 $612 $664 $731 $693 $665 $734 $704 Diamond Energy $701 Diamond Energy $750 Diamond Energy $719 $709 $761 $741 Commander $722 $768 Commander $794 $725 Commander $839 $820 $798 $871 $898 $852 $955 $940 $901 $997 $952 42

48 Figure 16 Lowest to highest annual bills (incl GST) for solar market offers in January 2019 in the Powercor network Figure 17 Lowest to highest annual bills (incl GST) for solar market offers in January 2019 in the Ausnet network Tango Energy $462 Tango Energy $535 $495 $538 $527 $598 $558 $599 Powerdirect $584 Powerdirect $601 $587 $646 $605 $647 $607 $648 $608 $648 $623 $668 $652 $699 $689 Diamond Energy $769 $709 $770 Diamond Energy $736 $780 $749 $780 Commander $775 Commander $876 $830 $916 $902 $944 $933 $1,052 43

49 3. Electricity network charges The Victorian electricity networks introduce new Network Use of System (NUOS) charges as of 1 January every year. These NUOS charges comprise Transmission Use of System (TUOS) and Distribution Use of System (DUOS) and the retailers can, and generally will, build changes to the NUOS (in relation to both shape and price) into their retail tariffs. 64 Electricity bills are made up of several components, including generation (wholesale market) costs, network costs (distribution and transmission), green schemes and costs associated with other public policy initiatives, and retail costs. In Victoria, where retail prices are deregulated, effective competition is required to ensure that households do not pay more than necessary for both generation (wholesale) and retail services (including retail margins). This section therefore seeks to explore the cost of each component, as well as changes to these cost components over time. Chart 51 below shows that NUOS charges remained relatively stable from 2008 to 2010 and that the maximum difference to the annual NUOS charge (for this consumption level) was approximately $100. The maximum difference between networks is currently around $200 per annum. From July 2011 to July 2013 the NUOS charges increased in all of Victoria s electricity network but since then there have been some increases and some decreases, depending on the network area. In January 2019, the NUOS increased in all network areas except for the Jemena and United Energy networks. Chart 51 NUOS charges from 2008 to 2019 as estimated annual cost (GST exclusive) for households using 4,800kWh per annum, single rate. 65 NUOS CHARGES ($) PER ANNUM Citipower Powercor Ausnet Jemena UE In January 2019, the NUOS charge increased by 5% in Ausnet while it decreased by -4% in United Energy. Chart 52 shows changes to NUOS in January Note that NUOS charges do not include smart metering costs. 65 The annual NUOS charges have been calculated by allocating 1,200kWh per quarter (again based on annual consumption of 4,800kWh) to the step charges stipulated in the NUOS. The annual NUOS cost also includes fixed charges. Note that as United Energy s NUOS charge has been a seasonal tariff over the last four years, the United Energy consumption used in these calculations is thus based on a proportional allocation of a 5 month summer tariff and a 7 month non-summer (off-peak) rate. 44

50 Chart 52 Changes to NUOS charges from January 2018 to January 2019 as $ per annum (GST exclusive) and % for households using 4,800kWh per annum, single rate. 66 $ change Citipower Powercor Ausnet Jemena UE % change $ Change % Change Chart 53 below looks at NUOS charges as a proportion of total bill. It shows that the NUOS proportion of electricity bills is currently highest in Ausnet (28%) and lowest in Citipower, Jemena and United Energy (21%). Chart 53 NUOS charges (excl GST) from July 2008 to January 2019 as proportion (%) of annual retail bill (incl. GST) for electricity regulated/standing offers, 4,800kWh per annum, single rate. 67 NUOS AS PROPORTION (%) OF BILL Citipower Powercor Ausnet Jemena UE Comparing all market offers This section compares all published electricity and gas market offers as of January As such it includes offers with various conditions such as direct debit payments, membership of sports clubs or frequent flyer programs, as well as other conditions. 68 Twenty-two retailers offer 67 electricity market offers in the Citipower network. Chart 53 below shows these offers as annual bills inclusive of all discounts as well as additional incentives. 69 It shows that the 66 Ibid. 67 The standing offer bill is based on the average incumbent (, Origin and Energy Australia) standing offer as of July every year (except for in 2017, 2018 and 2019 where it is based on January offers). Note that as United Energy s NUOS charge has been a seasonal tariff over the last three years, the United Energy consumption used in these calculations is thus based on a proportional allocation of a 5 month summer tariff and a 7 month non-summer (off-peak) rate. 68 The standard analysis of market offers in the Tariff-Tracking reports do not include offers where the customer is required to pay by direct debit or be a member of a program/organisation. It also only includes one offer for each retailer. 69 All discounts (guaranteed, pay on time, direct debit, e-billing and dual fuel) have been included as per retail offer. Only incentives that can readily be given a monetary value (for the first 12 months of a contract) have been included. For example, the monetary value of earning frequent flyer points have not been included. 45

51 maximum difference to annual bills is approximately $800 for this consumption level. A household on Origin s Supply offer would pay around $1,895 for 12 months of supply while a household on Tango s Home Select offer would pay $1,095 over the same period. 70 The average mean market offer bill is $1,467. Table 4 below outlines the conditions attached to these market offers as well as the type of discounts they offer. 71 Fifteen of the 67 offers require payment by direct debit (including Tango Energy s Home Select offer). Only five of the offers have guaranteed (non-conditional) discounts while over half of the offers (35) have a conditional pay on time discount. We have been registering that monthly billing is becoming an increasingly common feature of market offers and twenty-six of the offers in table 4 require customers to pay monthly instead of quarterly. 70 Note that Origin now offers a 17% additional discount to all customers on non-discounted offers and that these discounts are not included in the above. These discounts were announced through a media release on 30 November 2018, but they are not outlined in Origin s own Price and Product Information Statements. See Origin s media release: about/investors-media/media-centre/origin_continues_price_relief_for_victorian_customers.html. 71 All additional incentives listed as monetary values have been included in the bill calculations. 46

52 Chart 54 Electricity market offers in Citipower network as annual bills, 4,800kWh/annum, single rate including all discounts and additional incentives, January 2019 Supply Freedom People Energy On time saver Prepaid Q Energy Flexi Saver Home Q Energy Flexi Home People Energy Total saver Bill Saver Move Smart Saver Smart Saver - Dual Fuel Smart Saver SmilePower Electricity as you go Saver Smart Saver DD Flexi Saver Easy Save DD Diamond Energy Pay on time discount Qantas Red Plus Everyday Commander Market offer Glosave Maximiser Saver Online Bonus Glosave DD Diamond Energy Direct Debit Velocity Anytime Saver Pay on time (min discount) Lite Maximiser Online Bonus 1st Energy Market offer No frills Savers Home Connect Autopay with Power Saver Anytime Saver Pay on time Qantas Red Saver Living Energy Saver Fair Saver One low rate Savers Move Mate Autopay with Mega Pack Essentials Savers Online Save Movie Secure Saver Pay on time (max discount) Garnet Basic Movers SmilePower Flexi Movers DD Market offer Powerdirect Market offer Value Essentials Plus Geelong Cats Value DD AFL Plus Extra Tango Energy Home Select RACV Tango Energy Home E-Select ,200 1,400 1,600 1,800 47

53 Table 4: Conditions and features of electricity market offers in Citipower network, January 2019 Retailer Offer Bill Direct Debit only E-billing only Monthly billing Membership Guaranteed discount Pay-on-time discount Direct debit discount E-bill/online discount Dual fuel discount Fixed rates Other incentives Approx. incentive value ($) Supply $1,894 Freedom $1,855 People Energy On time saver $1,813 Prepaid $1,767 $80 Q Energy Flexi Home $1,740 Q Energy Flexi Saver Home $1,740 People Energy Total Saver $1,731 Bill Saver $1,704 Move $1,697 Smart Saver $1,680 Smart Saver - Dual Fuel $1,666 Smart Saver $1,664 Momentum Energy SmilePower $1,644 Electricity as you go $1,642 Saver $1,609 Smart Saver DD $1,595 Flexi Saver $1,589 Globird Energy Easy Save DD $1,581 Diamond Energy Pay on time discount $1,581 Qantas Red Plus $1,580 Everyday $1,577 Commander Market offer $1,569 Globird Energy Glosave $1,559 Maximiser $1,552 Saver Online Bonus $1,538 Globird Energy Glosave DD $1,535 Diamond Energy Direct Debit $1,530 Velocity Anytime Saver $1,513 Pay on time (min discount) $1,506 Lite $1,498 Maximiser Online Bonus $1,495 1st Energy Market offer $1,444 No frills $1,444 (12 months) Savers Home Connect $1,434 $79 Autopay with Power Saver $1,433 Anytime Saver $1,428 $50 Pay on time $1,428

54 Retailer Offer Bill Direct Debit only E-billing only Monthly billing Membership Guaranteed discount Pay-on-time discount Direct debit discount E-bill/online discount Dual fuel discount Fixed rates Other incentives Approx. incentive value ($) Living Energy Saver $1,422 Qantas Red Saver $1,422 Fair Saver $1,404 One low rate $1,396 (12 months) Savers $1,394 Momentum Energy Move Mate $1,390 $50 Autopay with Mega Pack $1,367 Essentials $1,366 (12 months) Savers Online $1,366 $25 Movie $1,345 $50 Save $1,345 $50 Secure Saver $1,343 Pay on time (max discount) $1,334 Garnet $1,332 (24 months) Basic $1,321 $50 Movers $1,319 $50 Momentum Energy SmilePower Flexi $1,298 $50 Movers DD $1,290 $50 Dodo Power & Gas Market offer $1,284 Powerdirect Market offer $1,282 Value $1,280 $50 Essentials Plus $1,278 Momentum Energy (24 months) Geelong Cats $1,253 $50 Value DD $1,252 $50 AFL $1,207 $175 Plus $1,202 $50 Extra $1,159 $50 Tango Energy Home Select $1,150 (12 months) RACV $1,130 $50 $80 Tango Energy Home E-Select $1,095 (12 months) $50 49

55 In relation to gas, fifteen retailers offer 48 gas market offers in the Multinet 1/Origin central gas zone. Chart 55 below shows these offers as annual bills inclusive of all discounts as well as additional incentives. 72 It shows that the maximum difference to annual bills is approximately $770 for this consumption level. A household on Move offer would pay around $1,120 for 12 months of supply while a household on s Essential Plus offer would pay $1,350 over a 12 month period. The average mean market offer bill is $1,523. Table 5 below outlines the conditions attached to these market offers as well as the type of discounts they offer. 73 Nine of the 48 offers require payment by direct debit, only four of the offers have guaranteed (non-conditional) discounts while over half of the offers (28) have a conditional pay on time discount. Chart 55 Gas market offers in the Multinet 1 gas zone as annual bills, 63,000Mj/annum including all discounts and additional incentives, January 2019 Move Covau Smart Saver Freedom Covau Smart Saver DD Supply Burgundy Save Movie Flexi Saver Velocity Anytime Saver Pay on time (min discount) Market offer AFL Gas as you go Qantas Red Plus Everyday Basic Saver Smart Saver Saver Online Bonus Lite Extra Plus No frills Maximiser Anytime Saver Auto Pay with Gas Saver Pay on time (max discount) Maximiser Online Bonus Movers Market offer Savers GloSave Fair Saver Movers DD RACV Value Savers Online GloSave DD Easy Save Essentials ComboGas Qantas Red Saver Easy Saver Value DD Secure Saver ComboGas DD Essentials Plus , 000 1, 500 2, 000 2, All discounts (guaranteed, pay on time, direct debit, e-billing and dual fuel) have been included as per retail offer. Only incentives that can readily be given a monetary value (for the first 12 months of a contract) have been included. For example, the monetary value of earning frequent flyer points have not been included. 73 All additional incentives listed as monetary values have been included in the bill calculations. 50

56 Table 5 Conditions and features of gas market offers in Multinet 1/origin Metro gas zone, January 2019 Retailer Offer Bill Direct Debit only E-billing only Monthly billing Membership Guaranteed discount Pay-on-time discount Direct debit discount E-bill/online discount Dual fuel discount Fixed rates Other incentives Approx. incentive value ($) Move $2,119 Smart Saver $1,823 Freedom $1,804 Smart Saver DD $1,751 Supply $1,697 Burgundy $1,686 Movie $1,685 $50 Save $1,685 $50 Flexi Saver $1,662 Velocity Anytime Saver $1,599 Pay on time (min discount) $1,599 Momentum Energy Market offer $1,560 $50 AFL $1,553 $170 Gas as you go $1,550 Qantas Red Plus $1,548 Everyday $1,533 Basic $1,523 Saver $1,513 Saver Online Bonus $1,499 Smart Saver $1,499 Lite $1,497 Plus $1,496 $50 Extra $1,496 $50 No frills $1,487 Maximiser $1,484 (12 months) Anytime Saver $1,482 $50 Auto Pay with Gas Saver $1,476 Pay on time (max discount) $1,473 Maximiser Online Bonus $1,470 Movers $1,461 $50 Dodo Power & Gas Market offer $1,450 Savers $1,446 GloSave $1,439 Fair Saver $1,438 Movers DD $1,430 $50 RACV $1,428 $50 51

57 Retailer Offer Bill Direct Debit only E-billing only Monthly billing Membership Guaranteed discount Pay-on-time discount Direct debit discount E-bill/online discount Dual fuel discount Fixed rates Other incentives Approx. incentive value ($) Value $1,422 $50 Savers Online $1,419 $25 Easy Save $1,418 GloSave DD $1,418 Essentials $1,407 (12 months) ComboGas $1,397 Easy Saver $1,393 Qantas Red Saver $1,393 Value DD $1,392 $50 Secure Saver $1,380 ComboGas DD $1,376 Essentials Plus $1,352 (24 months) (24 months) $50 5. Total cost of energy and price changes by area As approximately 60% of Victorian households are connected to both electricity and gas, it is important to analyse whether there are areas that have experienced high increases in both electricity and gas prices, and conversely, whether there are areas where the increases in electricity and gas prices are at the lower end. Such analysis allows for a more detailed understanding of the total energy costs faced by households across Victoria. 74 The analysis presented in this section shows that while the increases are small compared to previous years, dual fuel households have received an overall increase to energy costs because gas bills are up by more than electricity bills are down. Table 6 Electricity standing offer price changes (average) by area January 2018 to January 2019 Area Annual bill change since January 2018 Percentage change Inner city and Eastern suburbs (Citipower) -$10-0.6% Outer Western suburbs and Western Victoria (Powercor) -$10 -$15* -0.6% -0.6%* Outer Northern and Eastern suburbs and Eastern Victoria (SP Ausnet) -$10 $1, % -0.5%* Inner West and Northern suburbs (Jemena) -$10-0.6% Outer South Eastern suburbs and Mornington Peninsula (United Energy) -$10-0.6% * For all-electric households with peak/off-peak (controlled load) rates 74 The figures in tables 6-9 are based on the incumbent retailers average standing offer for electricity and gas customers for dual fuel households using 4800kWh and 63,000Mj per annum, and all-electric households using 7000kWh (thereof 30% off-peak). To calculate the increases we have used the average of the incumbent retailers standing offer rates rather than the average of all standing offers. This was done because the vast majority of customers on the standing offer are with the incumbents (, Origin and Energy Australia). Furthermore, as discussed above, market offers do generally reflect the increases to the standing offers. 52

58 Table 7 Gas standing offer price changes (average) by area from January 2018 to January 2019 Area Annual bill change since January 2018 Eastern and South Eastern suburbs (Origin Metro zone) $25 1.3% Bayside and outer South Eastern suburbs ( South zone) $25 1.3% Northern and North Eastern Victoria (Origin North zone) $25 1.3% CBD, inner city and North Eastern suburbs (TRU East zone) $25 1.3% Frankston, Mornington Peninsula and Gippsland (Origin South East zone) $25 1.3% Macedon Ranges, Bendigo, Ballarat and Western Victoria (TRU West zone) $20 1.0% Western and North Western suburbs ( North zone) $20 1.0% Outer Western suburbs, Geelong and Bellarine Peninsula (TRU Central zone) $20 1.0% Percentage change Table 8 Average annual electricity bill by area. Based on standing offers January 2019 Area Average annual bill Inner city and Eastern suburbs (Citipower) $1,920 Outer Western suburbs and Western Victoria (Powercor) $2,135 $2,630* Outer Northern and Eastern suburbs and Eastern Victoria (SP Ausnet) $2,240 $2,735* Inner West and Northern suburbs (Jemena) $2,085 Outer South Eastern suburbs and Mornington Peninsula (United Energy) $2,020 * For all-electric households with peak/off-peak (controlled load) rates Table 9 Average annual gas bill by area. Based on standing offers January 2019 Area Average annual bill Eastern and South Eastern suburbs (Multinet 1/Origin Metro zone) $1,815 Bayside and outer South Eastern suburbs (Multinet 2/ South zone) $1,815 Northern and North Eastern Victoria (AGN North/Origin North zone) $1,855 CBD, inner city and North Eastern suburbs (AGN Central 2/TRU East zone) $1,825 Frankston, Mornington Peninsula and Gippsland (AGN Central 1/Origin South East zone) $1,845 Macedon Ranges, Bendigo, Ballarat and Western Victoria (Ausnet West/TRU West zone) $1,720 Western and North Western suburbs (Ausnet Central 2/ North zone) $1,835 Outer Western suburbs, Geelong and Bellarine Peninsula (Ausnet Central 1/TRU Central zone) $1,835 * For all-electric households with peak/off-peak (controlled load) rates 5.1 Inner city, inner North and Eastern suburbs The electricity standing offer has on average decreased by -$10 over the last year for average consumption (4800kWh) households in this area. Households in the AGN Central 2 gas zone (CBD and inner North) have experienced an increase in gas prices of approximately $25 over the same period. Households with an average consumption of electricity and gas in Melbourne (CBD), Brunswick, Carlton, Fitzroy, Northcote, Richmond and Collingwood will typically receive an increase in energy costs of $15 compared to last year Citipower s electricity distribution network and the AGN Central 2/TRU East gas zone. 53 Source: Citipower

59 Households with an average consumption of electricity and gas in the inner Eastern suburbs of Kew, Hawthorn, Camberwell and Balwyn, and the inner South East areas of South Yarra, Prahran, Armadale, Toorak and Caulfield, will typically receive an increase in energy costs of $15 compared to last year. 76 Households with an average consumption of electricity and gas in the inner city bay side suburbs of St Kilda, Port Melbourne, Albert Park and South Melbourne will typically receive an increase in energy costs of $15 compared to last year Inner West and North Western Suburbs Source: Essential Services Commission 5.3 South Eastern suburbs and Mornington Peninsula The electricity standing offer has on average decreased by -$10 over the last year for average consumption (4800kWh) households in this area. Households in the AGN Central 1 gas zone (Mornington Peninsula and outer South Eastern suburbs) have experienced an increase in gas prices of approximately $25 over the same period. Households with an average consumption of electricity and gas in the bayside suburbs of Elwood, Elsternwick, Brighton, Sandringham, Beaumaris, Chelsea and South Eastern Suburbs of Bentleigh, Moorabbin, Springvale, Noble Park, Keysborough will typically receive an increase in energy costs of $15 compared to last year. 80 The electricity standing offer has on average decreased by -$10 over the last year for average consumption (4800kWh) households in this area. Households in the Ausnet Central 2 (Western and North Western suburbs) have experienced an increase in gas prices of approximately $20 over the same period. Households with an average consumption of electricity and gas in Footscray, Yarraville, Williamstown, Flemington, Moonee Ponds, Broadmeadows, Coolaroo, Braybrook and Sydenham will typically receive an increase in energy costs of $10 compared to last year. 78 Households with an average consumption of electricity and gas in Heidelberg, Fairfield, Ivanhoe, Bundoora, Thomastown, Preston, Reservoir will typically receive an increase in energy costs of $15 compared to last year. 79 Households with an average consumption of electricity and gas in the suburbs of Seaford and Frankston and on the Mornington Peninsula will typically receive an increase in energy costs of $15 compared to last year. 81 Source: Essential Services Commission Households with an average consumption of electricity and gas in the Eastern suburbs of Bulleen, 76 Citipower s electricity distribution network and the Multinet 1/Origin Metro gas zone. 77 Citipower s electricity distribution network and the Multinet 2/ South gas zone. 78 Jemena s electricity distribution network and the AGN Central 2/TRU East gas zone. 79 Bill calculations based on the three incumbent s standing offers. 80 United Energy s electricity distribution network and the Multinet 2/ South gas zone. 81 United Energy s electricity distribution network and the AGN Central 1/Origin South East gas zone. 54

60 Templestowe, Box Hill, Doncaster, Mitcham, Vermont, Glen Waverly and Chadstone will typically receive an increase in energy costs of $15 compared to last year Outer Western suburbs and Western Victoria All-electric households in this area would have typically experienced an electricity price decrease of -$15 over the last year (based on average consumption of 7000kWh). 83 For dual fuel households the electricity standing offer has on average decreased by approximately -$10 over the last year (based on average consumption of 4800kWh). Total energy cost increases for dual fuel households in the Western region will typically amount to: $10 for average consumption households in Hoppers Crossing, Werribee, Geelong region and on the Bellarine peninsula. 84 $10 for average consumption households in Macedon, Kyneton, Ballarat, Colac, Warrnambool, Portland, Hamilton, Horsham, Ararat and Daylesford. 85 Source: Powercor $15 for average consumption households in Northern Victorian towns such as Echuca, Shepparton and Heathcote Outer Northern and Eastern suburbs and Eastern Victoria All-electric households in this area would have typically experienced an electricity price decrease of -$15 over the last year (based on average consumption of 7000kWh). 87 For dual fuel households the electricity standing offer has on average decreased by -$10 over the last year (based on average consumption of 4800kWh). Total energy cost increases for dual fuel households in the Eastern Victoria will typically amount to: $15 for average consumption households in the Outer Northern and Eastern suburbs of Warrandyte, Ringwood, Chirnside Park and the area around Mount Dandenong. 88 $15 for average consumption households in Kilmore, Seymour, Violet Town, Nagambie, Wangaratta, Chiltern and Wodonga. 89 Source: Essential Services Commission $10 for average consumption households in the La Trobe Valley and Sale in the Gippsland region United Energy s electricity distribution network and the Multinet 1/Origin Metro gas zone. 83 Based on the average electricity standing offer for households taking controlled load off-peak (annual consumption of 7000 kwh, 70% peak and 30% off-peak). 84 Powercor s electricity distribution network and Ausnet Central 1/TRU Central gas zone. 85 Powercor s electricity distribution network and the Ausnet West/TRU West gas zone. 86 Powercor s electricity distribution network and the AGN North/Origin North gas zone. 87 Bill calculations based on average electricity market offer including guaranteed discounts and pay on time discounts for households taking controlled load off-peak (annual consumption of 7000 kwh, 70% peak and 30% off-peak). 88 Ausnet s electricity distribution network and the Multinet 1/Origin Metro gas zone. 89 Ausnet s electricity distribution network and the AGN North/ Origin North gas zone. 90 Ausnet s electricity distribution network and the AGN Central 1/Origin South East gas zone. 55