Questions & answers: NSW electricity and gas prices and assistance with bills
Last updated: 1 July 2010
New electricity prices for 2010 now apply. The NSW Government understands the impact higher electricity and gas prices will have on some NSW consumers. There are a number of options available to help customers reduce consumption and pay their energy bills.
The NSW Government has one of the strongest consumer protection frameworks in the country with a range of rebates, programs and emergency assistance options on offer.
Information about energy prices
What are the components of my electricity bill?
Electricity charges are comprised of wholesale energy costs (that is, the cost of purchasing electricity from generators), retail costs (associated with providing customer call centres and administrative costs), and distribution and transmission network charges (associated with maintaining and upgrading the poles and wires). Maintaining the network also includes the provision of emergency response teams 24 hours a day, seven days a week.
Who sets NSW electricity prices?
The Independent Pricing and Regulatory Tribunal (IPART) is responsible for regulating retail electricity prices for small business and residential customers on standard contracts until at least 2013. IPART reviews prices on a regular basis and sets the prices to reflect the efficient costs of supplying electricity to small customers. IPART determines the wholesale energy costs (the cost of purchasing electricity from generators) and retail operating costs.
Distribution and transmission network charges are regulated by the Australian Energy Regulator (AER), a national independent body. IPART includes these network costs in its decision on electricity prices for customers. Distribution charges cover the cost of transporting the electricity through the physical infrastructure, the poles and wires that make up the electricity network. Typically, about 45-50 per cent of electricity bills relates to network costs.
In making its price determination, IPART undertakes an open and transparent public consultation process. IPART invites interested stakeholders to review the draft proposal and submit comments and suggestions. The NSW Government also made a submission to IPART for this pricing determination.
This process is independent and the NSW Government has no discretion to amend IPART's determination.
For customers on a negotiated contract, prices are set according to the terms and conditions agreed between the customer and the retailer.
How does the AER set network prices?
The AER is the national, independent specialist regulatory body for distribution and transmission electricity network businesses in Australia. In 2009 the AER released new NSW network charges for five years between 2009 and 2014.
The AER undertook a rigorous consultation process before deciding the appropriate level of network charges. During this, the NSW Government requested the AER smooth the price increases over five years. As a result, the AER has agreed to reduce the burden on NSW customers in the initial period of the determination.
What is a regulated price and do I have to pay this?
A regulated price is the price charged to customers on standard contracts. In NSW all small customers, households and those small businesses who consume less than 160 megawatt hours (MWh) of electricity per year, are able to choose between being supplied electricity on a standard contract from their standard retailer (EnergyAustralia, Integral Energy or Country Energy, depending on where they live), or entering into a negotiated contract with a retailer of their choice. An average NSW household uses around 7,500 kilowatt hours a year.
This allows customers the freedom to shop around and choose the best available deal for their electricity.
Standard retailers may offer negotiated contracts to small customers, in addition to standard contracts at regulated prices.
Who do these new electricity prices affect, what is a small customer?
These prices are for small customers whose electricity is supplied by a standard retailer (Country Energy, EnergyAustralia or Integral Energy depending on where they live) on a standard contract. A small customer is any household or business using less than 160 megawatt hours (MWh) of electricity per year. An average household uses around 7,500 kilowatt hours (equivalent to 7.5 megawatt hours) a year.
What are the new electricity prices?
In March 2010 IPART set new prices for the next three years which started from 1 July 2010. While the exact dollar increases for each customer will depend on a number of factors, including where they live, how much electricity they use and the type of tariff they are on, IPART has released indicative annual bills for average residential and small business customers. These can be found at www.ipart.nsw.gov.au.
What sort of increases are these?
In 2010, IPART has approved an average increase of 10 per cent for EnergyAustralia customers (around $2.42 per week), 7 per cent for Integral Energy customers (around $1.63 per week) and 13 per cent for Country Energy customers (around $3.52 per week).
Why are prices increasing?
IPART sets prices that reflect the efficient cost of supplying electricity to customers. An 'efficient cost' means energy businesses need to spend money wisely, and find business savings internally before passing costs onto consumers.
A major component of the proposed price rises included costs relating to the Commonwealth Government's proposed Carbon Pollution Reduction Scheme (CPRS) and costs associated with maintaining and upgrading the electricity network to help ensure a secure and reliable supply of electricity to NSW households and businesses both now and into the future.
The Commonwealth Government has announced that its proposed CPRS will now no longer come into effect until at least 2013. Previously, it was to commence on 1 July 2011. As a result, electricity price rises will not include any costs associated with a CPRS until such time that it comes into effect.
Electricity networks require maintenance and refurbishment. There are some 300,000 kilometres of electricity wires and cables across the State, 2.2 million power poles and 180,000 substations which have to be regularly maintained or replaced.
This includes infrastructure maintenance and the provision of emergency response teams all year round.
Ongoing investment in the electricity network to ensure this infrastructure can continue to keep up with a growing population and increased electricity use is needed to ensure customers have a reliable electricity supply. Over $16 billion will be spent between 2009 and 2014 on network infrastructure.
I've heard the Carbon Pollution Reduction Scheme (CPRS) is no longer happening until 2013. Will this affect my electricity price?
The Commonwealth Government has announced that its proposed CPRS will now no longer come into effect until at least 2013. As a result, electricity price rises will not include any costs associated with a CPRS until such time that it comes into effect.
From 1 July 2010, IPART has approved an average increase of 10 per cent for EnergyAustralia customers (around $2.42 per week), 7 per cent for Integral Energy customers (around $1.63 per week) and 13 per cent for Country Energy customers (around $3.52 per week).
These price increases will not change because they did not include any costs for the CPRS.
Price increases approved by IPART from 1 July 2011, and 1 July 2012, will now be less as a result of the CPRS not being introduced. Prices will now rise on average in 2011 by 11 per cent, and 8 per cent in 2012.
Why can't IPART lower the prices?
IPART is required to ensure that regulated retail prices are set at a level which reflects the efficient cost of supplying electricity to small customers.
If regulated prices are less than that, electricity retailers will be exposed to financial risk as they will be unable to recover their costs and continue to supply their customers. Cost reflective prices are also important in allowing electricity network providers to keep electricity networks maintained to ensure electricity supplies are secure for households and businesses.
How does IPART work out the prices?
IPART and specialist consultants work out the cost of buying electricity from generators and an appropriate retail margin. As part of its determination IPART includes an annual review of retailers’ wholesale electricity purchase costs. Wholesale costs make up around 40 per cent of the final price of electricity.
This is to ensure regulated prices keep up with movements, both upward and downward, in the wholesale electricity market.
In its review of wholesale costs, IPART will undertake an open and transparent consultation process about retailers’ electricity purchase costs, and invite submissions from interested parties.
IPART also included network costs that were approved by the AER in 2009. Network charges make up about 45-50 per cent of the price of electricity.
IPART started its review in June 2009 and released a number of papers for consultation including a draft pricing determination in December with submissions open until February 2010. A public hearing was also held for interested people.
The NSW Government made a submission to IPART which highlighted the Government's concern about the impact the proposed increases could have on households and small businesses across the State. The Government has also sought confirmation from IPART that the final increases to regulated prices will be no more than required to ensure the ongoing financial viability of the NSW standard electricity retailers and to meet IPART's Terms of Reference.
How often will my electricity bills go up?
IPART has set price increases for three years 2010 to 2013. Prices will increase each year on 1 July starting in 2010.
Any increases relating to the proposed CPRS will only come into effect when a CPRS starts and IPART will review regulated prices annually to ensure that customers will only pay for the costs associated with the scheme that is implemented.
Who regulates NSW gas prices?
The Independent Pricing and Regulatory Tribunal (IPART) agrees pricing arrangements with each of the standard gas retailers supplying small customers in NSW - AGL, Country Energy, Origin Energy and ActewAGL. Small gas customers are those that use less than 1 terajoule a year.
These pricing agreements set out the maximum price that each of these retailers can charge small customers on standard contracts in different parts of the State.
Gas customers can also choose to shop around and enter into a negotiated contract with another retailer to get the best deal for their circumstances.
IPART goes through a public consultation process when setting prices and anyone is invited to review the draft proposal and submit comments and suggestions.
The AER sets the network charges for gas. In NSW, the majority of gas networks are owned by private companies such as Jemena Pty Ltd. The AER sets the amount Jemena can charge retail gas companies and this cost is included in the price paid by small gas customers.
What is the process for reviewing gas prices?
IPART has reviewed gas retail prices for 2010 to 2013 and released its report with new prices coming into effect from 1 July 2010. In its decision making process IPART held a public hearing to listen to the views of the community and stakeholders and took public submissions.
For more information on your gas price visit the IPART website.
What are the new gas prices?
IPART has approved price increases of about 5 per cent for the majority of small gas customers in NSW on regulated prices, from 1 July 2010. Over the three years to 2013 prices are expected to increase between 12 and 17 per cent, depending on where you live. 'Small gas customers' are households and businesses that use less than 1 terajoule a year, equivalent to an annual gas bill of around $15,000.
Prices will vary across metropolitan and regional NSW. About 30 per cent of NSW households are connected to gas and currently spend about $12 a week on gas.
These draft price increases do not include the Commonwealth Government's proposed Carbon Pollution Reduction Scheme (CPRS). The Commonwealth has announced that its proposed CPRS will now no longer come into effect until at least 2013.
For more information on the price of gas for each supplier visit the IPART website.
Why are the price increases different for each gas supplier?
Gas network charges account for about half of a customer's total gas bill. Prices vary between gas suppliers reflecting the unique characteristics of each network, which include differences in the number and length of pipelines in each network, the terrain and the size of the network area.
The Australian Energy Regulator (AER) sets network charges.
The AER also recently reviewed access arrangements for Jemena gas networks and network charges. The Jemena gas network covers Sydney, Newcastle, the Central Coast, Wollongong and many regional centres. For more information visit the AER website.
The gas price increases approved by IPART include the gas network charges approved by the AER.
What rebates and assistance can I get for my gas bill?
The NSW Government assistance measures are intended to help households in need no matter what energy source they use. The same rebates are paid to eligible households whether they have gas or not. This recognises that households have similar needs even if some use gas as well as electricity. All households need energy for hot water, cooking, heating and cooling regardless of the source of that energy.
Because all gas customers will have some form of electricity account as well as for administrative purposes, Government rebates are credited against electricity bills.
The Energy Accounts Payment Assistance (EAPA) scheme is different to rebates and EAPA vouchers can be used for both electricity and gas accounts.
I have a dispute with my gas retailer, what can I do?
Gas customers are also able to contact the Energy & Water Ombudsman NSW (EWON) if they are having difficulty resolving a dispute with their gas retailer. The NSW Government has made regulatory changes to ensure all gas retailers and distributors are members of EWON. All gas customers are able to access this free, independent service.
Assistance measures available for customers
I can't afford to pay this, what can I do?
The NSW Government has a number of consumer protection measures available to assist customers with their energy bills.
The first thing you should do is call your energy retailer. Your retailer will be able to explain to you the range of measures on offer including direct financial assistance like rebates. If you have an outstanding bill, they may also set you up with an affordable payment plan, or deferred payment arrangement. Customers should contact their retailer to find out more about hardship programs and payment plans.
Retailers also offer programs to help people cut down on the energy used at home, which will help to reduce bills. You are likely to find further information and contact details on your electricity bill.
From 1 March 2010, the Government requires all energy retailers to provide extra assistance to residential customers having difficulty paying their energy bills.
Retailers must develop, publish and implement hardship charters to identify what assistance is available to customers. This assistance must include options for alternative payment arrangements such as instalment plans or Centrepay. Retailers are required to make two offers of a payment plan to a residential customer experiencing financial difficulties before the retailer can move to disconnect the customer.
What assistance is there to help with my energy bills?
The NSW Government understands some people will find energy price rises difficult to meet and has a range of programs to help eligible customers stay connected to these essential services. These include the:
- NSW Energy Rebate ($145 a year from 1 July 2010 rising to $161 from July 2011)
- Medical Energy Rebate ($145 a year from 1 July rising to $161 from July 2011)
- Life Support Rebate (rates vary depending on the type of machine)
- Energy Accounts Payment Assistance (EAPA) vouchers
- Home Power Savings Program (savings of up to 20 per cent on electricity use)
- Retailer Hardship Policies and Payment Plans
- Funding and support for free financial counselling services offered by FCAN
- Save Power website (for useful energy saving tips and information on rebates to assist households purchase energy savings appliances).
Centrepay is also available to prevent large energy bills by making regular instalments.
More information on electricity rebates and EAPA assistance is available from your electricity retailer or from the Energy Information Line on 1300 136 888.
For more information on rebates, hardship programs and payment plans contact your retailer, who can assist and if you are eligible, set you up with rebates or programs.
What is the Government doing, are there any new assistance measures coming up?
Yes. The NSW Government is constantly reviewing its consumer protection measures to ensure they are the right fit and can help as many people as possible. To help more customers meet higher electricity costs, the NSW Government has recently increased and extended its Energy Rebate.
New measures including a price comparison website and Energy Assistance Guide will be coming soon.
How has the Energy Rebate been increased and extended?
The NSW Government will spend over $800 million on customer assistance measures over five years. This includes an additional $48 million provided in 2010 to extend and increase the Energy Rebate.
From 1 July 2010, the Energy Rebate was increased from $130 a year to $145 per year. And from 1 July 2011, it will increase again to $161 per year.
This higher amount reflects the average rise in regulated retail prices.
In addition the NSW Government's Energy Rebate has now been extended to eligible households who hold a Health care card issued by Centrelink as a result of receiving one of a number of income support payments from the Commonwealth. Health care cards are for people who are below aged pension age and receive certain income support payments from the Commonwealth due to their low income levels. Health Care Card customers will be eligible to receive the Rebate only as long as they continue to hold a Health Care Card and the electricity account is in their name.
How will I receive the higher Energy Rebate?
For people that currently receive the Energy Rebate, the extra rebate amount will automatically increase on 1 July.
New customers with Health Care Cards that will be eligible for the Energy Rebate will need to contact their retailer to apply. It may take some time to process the large expected volume of applications so your rebate may not appear on your first bill. However it will be backdated to 1 July 2010 if you are eligible at that date.
I run a small business, what assistance is there to help me?
The Department of Environment, Climate Change & Water has an Energy Efficiency for Small Business Program, which provides personalised energy assessments, tailored action plans and rebates of up to $5,000 for making energy efficiency improvements that help small businesses save money and reduce carbon pollution. For more information visit www.savepower.nsw.gov.au
I have tried to talk to my retailer but they won’t help, what can I do?
Customers who need assistance with their energy bills should first contact their retailer.
You can also contact a community welfare organisation or financial counsellor. Community welfare organisations may be able to help people with immediate difficulty paying energy bills, for instance through the provision of Energy Account Payment Assistance (EAPA) vouchers and other emergency assistance. Financial counsellors can take a more holistic, longer term approach to dealing with the customer's financial difficulties. Financial counsellors work closely with community welfare organisations and can refer clients to other services where appropriate.
Customers who are experiencing difficulty dealing with their retailer can contact the Energy and Water Ombudsman NSW (EWON), which is a free, independent service available to help resolve disputes.
EWON has been approved by the Government as an independent way of helping customers resolve disputes with energy providers where internal dispute resolution procedures have failed. For more information you can contact EWON on freecall 1800 246 545 or visit www.ewon.com.au.
My neighbour is with a different retailer and they pay less than I do, why?
All small customers in NSW are able to shop around and choose to be supplied by a standard retailer (EnergyAustralia, Integral Energy or Country Energy, depending on where they live) on regulated prices or enter into a negotiated contract with a retailer of their choice.
Since the introduction of full retail contestability on 1 January 2002, all electricity customers in NSW have had the ability to choose their electricity retailer, and can shop around for the best price for their electricity supply.
Everyone's electricity and gas bill is different. This is due to factors such as differences in household size, the number of people living in a house and the types of appliances installed and used.
Before switching retailers, ask for a complete list of all costs associated with the transfer so you can weigh up your options. Some retailers may not charge a termination fee. However there could be other associated costs passed on.
How can I find the best price on electricity and gas?
To ensure retailers provide easy to understand and up to date information about their prices, the Government has introduced strengthened price disclosure requirements, which require retailers to provide information about available energy offers on their website, and to any person on request free of charge, making it easier for customers to understand the terms and conditions of these offers when they are selecting their energy retailer.
The online service will be operated by IPART and available soon.
What rebates and assistance can I get for my gas bill?
The NSW Government assistance measures are intended to help to households in need no matter what energy source they use. The same rebates are paid to eligible households whether they have gas or not. This recognises that households have similar needs even if some use gas as well as electricity. All households need energy for hot water, cooking, heating and cooling regardless of the source of that energy.
Because all gas customers will have some form of electricity account as well and for administrative purposes, Government rebates are paid off electricity bills in all cases.
Customers that also have the option to use gas for heating water, cooking and heating their homes are at an advantage because the cost of water heating is a large percentage of energy costs and gas is usually more efficient and cheaper.
These rebates are also available to long-term residents of caravan parks.
The Energy Accounts Payment Assistance (EAPA) scheme is different to rebates and EAPA vouchers can be used for both electricity and gas accounts.
I have a dispute with my gas retailer, what can I do?
Gas customers are also able to contact EWON if they are having difficulty resolving a dispute with their gas retailer. The NSW Government has made regulatory changes to ensure all gas retailers and distributors are members of EWON. All gas customers are able to access this free, independent service.