Ausgrid Time Of Use customers getting a raw deal

Ausgrid Time of Use Raw Deal

If you’re on a Time Of Use electricity tariff in the Ausgrid network (Sydney, Central Coast or Hunter Region), chances are your retailer has been giving you a raw deal.

That’s because almost half of retailers haven’t passed on Ausgrid’s reduced peak hour network charges for Time Of Use customers. If you think every Time of Use plan is based on the same hours, read on to find out which retailers are sharing the savings and which are holding them back…

Fewer peak hours, but many wouldn’t know it.

From July 2018, Ausgrid stopped charging its peak tariff in April, May, September and October. Plus, during Winter (June, July, and August), the peak period dropped back to just 4 hours each weekday. If retailers reduced the peak hours in line with the Ausgrid network, households would enjoy real savings. 

Unfortunately, 17 retailers are still charging peak rates in April, May, September and October. As a result, these retailers pocket an additional 19.7 cents per kWh. The 19.7 cents (ex GST) is the difference between what Ausgrid charges retailers for electricity consumed in Peak and Shoulder periods. Many households would be unaware of the seasonal Time of Use tariff because it was not widely publicised. So many retailers kept charging the ‘old’ peak times during the 30 hours each week for these four months of the year (adding up to ~ 500 hours p.a). 

Further, Ausgrid also changed its Time Of Use peak period from 2-8pm to 5-9pm from June to August. But fifteen retailers are still charging customers peak rates for 6 hours a day – adding 10 extra hours per week (~130 hours p.a.) during Winter.

Not all Time of Use plans have equal hours.

The total effect is that Time Of Use consumers with many retailers will likely be paying at least an extra 20 cents (inc GST) for each kWh they consume across ~630 hours per year.

For a household using 1kWh of electricity in those 630 “extra” peak hours, some retailers will pocket ~$125 p.a. by not aligning with the seasonal tariff hours.

Let’s look at which retailers share the savings and those that are yet to pass on the reduced peak periods.

Retailers sharing the savings

As of 25th January 2024, the following retailers have adopted Ausgrid’s current Time Of Use periods for tariff EA025 for households (based on their published Basic Plan Information Documents) and are passing on the savings available from reduced peak periods for eight months of the year.

  • Amber (market-link plans pass on network costs and the wholesale energy price)
  • EnergyAustralia
  • Energy Locals
  • Kogan Energy
  • Nectr
  • Origin Energy
  • OVO Energy
  • Pacific Blue
  • Powershop
  • Simply Energy
  • Tango Energy

Retailers not aligned with the standard Ausgrid TOU seasonal hours

The retailers who are not aligned with the standard Ausgrid TOU hours and have significantly more Peak period hours (based on their published Basic Plan Information Documents) are:

  • 1st Energy (2-8pm Mon – Fri peak hours all year round)
  • AGL (2-8pm Mon – Fri peak hours all year round)
  • Alinta Energy (2-8pm Mon – Fri peak hours all year round)
  • CovaU (2-8pm Mon -Fri peak hours all year round)
  • Diamond Energy (5-9pm Mon – Fri peak hours all year round)
  • Dodo (2-8pm Mon – Fri peak hours all year round)
  • GloBird Energy (2-8pm Mon – Fri peak hours all year round)
  • Momentum Energy (2-8pm Mon – Fri peak hours all year round)
  • Red Energy (2-8pm Mon – Fri peak hours all year round)
  • Sumo (2-8pm Mon – Fri peak hours all year round)

For retailers applying 6 hours of peak period every weekday over the year, this works out to peak rates applying 18% of the time.
Compare this to any retailer who is passing on the seasonal tariff. In this case, peak rates apply for 11% of the hours across a year.

How do I work out what’s a good deal?

It’s hard to calculate the full impact of this issue without considering a household’s full meter data history. Hourly usage data enables an accurate calculation to reflect the costs between retailers using the current and old-time of use periods. Here are some ideas for households in the Ausgrid network area on Time Of Use tariffs to be mindful of when shopping for a better deal.

The only consistent period is summer when just about every retailer – uses the 2pm-8pm peak during weekdays. However, it’s the other times of the year when the seasonal Time of Use works out better that you’ll need to account for. For example, if you are comparing a current bill from a retailer using year-round peak – then don’t forget to move any ‘peak’ hours in April, May, September and October to ‘shoulder’ when entering into a comparison – to get an estimate for seasonal rates. One simple rule of thumb for the average household is to factor an additional ~$100 in favour of retailers offering Ausgrid’s seasonal TOU tariffs vs those still applying their own year-round peak tariff. 

Pass it on

The Australian Energy Regulator has been pushing electricity networks hard to implement cost-reflective tariffs. And ultimately, the intention of this is for retailers to pass costs and savings on to consumers.
Where there is falling or limited demand on the network, like in Autumn and Spring, peak network charges in Ausgrid have been removed, and so-to should retail peak costs. In Winter, when electricity demand has moved later into the evening and for a shorter period (thanks to solar), the Ausgrid network peak cost period have been adjusted and reduced.

If it looks like price gouging…

Energy retailers should have the opportunity to innovate and try different pricing offers to appeal to households. If there’s a genuine trade-off – between peak rates and lower rates – then bring it on. But suppose it’s simply hanging onto the old peak rate periods long after the networks have cut their costs. In that case, it’s just another brick in the wall of frustration for Aussie energy consumers.

After more than five years, many retailers in Ausgrid are still to adopt the cost-reflective tariffs and instead have pocketed potential savings consumers should receive. Legally, retailers are free to set their own Time of Use hours. But is this something that the average person would consider is reasonable behaviour if they were aware of the situation?

Now you know that not all Time of Use plans in Ausgrid are created equal.