Demand Tariffs in NSW. The need to knows.

Let’s talk about demand tariffs in NSW. Many households don’t even know they have a demand tariff associated with their property. And lots of those that do wish they didn’t have it. This Guide explains the important things you should know if you have a demand tariff and are looking for the best electricity deal. We’ll cover;

• why do households get demand tariffs applied;
• why some won’t see demand charges on their bills;
• how to shop for the best deal with demand tariff codes;
• how to change your tariff to something more straightforward,
• A list of NSW retailers who generally do/don’t offer Demand tariffs.

Smart meters mean you’ll get a new tariff.

If you installed solar in the last five years in NSW and had the meter upgraded, then you’ll find a smart meter in your electricity box. All new meter installs and upgrades are now required to be smart meters.

Ausgrid and Endeavour

In NSW’s two most populated networks – Ausgrid (covering Sydney, Central Coast, Hunter Region and Newcastle) and Endeavour (covering Western Sydney, the Blue Mountains, Southern Highlands and Illawarra), installing a smart meter means your network will move you to their default Demand tariff.

A demand tariff code will be associated with your property address and NMI number. The network then charges your retailer a ‘demand charge’ based on the highest grid energy consumption for a 30-minute period within the tariff’s nominated peak demand window. On the flip side, the network charges the retailer a lower per kWh usage rate for any grid power the consumer uses over the network’s poles and wires. We’ll cover what you might or might not see on your electricity bill in a moment.

Essential network

The good news is that if you are lucky enough to live in the Essential Energy network (Regional NSW), the default tariff is Time of Use. Expect retailers to offer you a Time of Use tariff consistently. There are two Time of Use tariffs in Essential (including BLNT3AU with extra peak hours in the morning), which you can switch between. There is a Demand  Tariff in Essential (BLND1AR) but it’s not as common.

Electricity bills where you see it

Most retailers pass network demand costs to the households with little to no markup.

Customers of these retailers will see a line item on their bill with a Demand Charge based on the highest 30-minute consumption multiplied by the demand charge (cent/kWh) multiplied by the number of days in the month. Often, the plan name includes the tariff “Anytime Demand” (N73) or “Time of Use Demand” (which, ironically, with Ausgrid’s EA116, has the identical rate applied in all three periods).

Electricity bills where you don’t see it

Some retailers don’t explicitly pass on demand tariffs to households. These households receive a bill that looks like an old-school flat rate. There’s one usage rate applied across the day. And no Demand tariff in sight. This is a choice that retailers make to keep customers whose meter is assigned to a demand tariff (or are forced to make if their billing system doesn’t support demand tariffs).

My cynical self says – there are few ‘free rides’ here. Retailers know how to make money. Some protect their margin by passing on the network demand charges to avoid any risk of losing money. Others increase the usage rates and/or supply charges to cover the Demand charges likely to be incurred. Just because you don’t see a demand charge on your bill doesn’t mean customers aren’t covering the cost.

Demand tariffs can work out OK or better for low and medium-energy use households. For example, some solar households are efficient, setting appliances and A/C to run ‘cost-free’ from daytime solar with little evening use. But, if you are an energy user with big peak afternoon/evening consumption spikes (hello, large ducted A/C system blowing full-tilt early evening), you’ll want to avoid demand tariffs for as long as possible. Switching tariffs is another strategy to do that, too.

How do I know if I have a demand tariff associated with your property address/NMI?

You will likely have a demand tariff code associated with your meter/property;

if you live in the Ausgrid or Endeavour Energy networks and

have had a smart meter installed in the last 4-5 years, typically when solar was added.

or it’s new build from the same period.

When households shop for a new electricity plan and look at the lower-cost options, many discover a demand charge included in the rates when they enter their street address or NMI into a retailers website. So if you find that, it’s a clear signal that you have a Demand tariff. You can also ask your current retailer what your underlying tariff code is. We’ll cover shopping for plans and how to change your tariff next.

Shopping for plans with Demand Tariff

Here are the hacks for shopping for the cheapest plan when different retailers offer your property different tariff structures. 

If your existing retailer already includes demand charges, comparing them across two different tariffs is easy.

Grab your bill. Start a new comparison.

Select Demand as your Tariff.

Then, enter the number of days.

The electricity Usage.

And the Demand Peak (in kWh).

Plus, Solar export.

Bang. You’ve got a comparison of Demand offers from all retailers.
Save the URL or screengrab. (Better still, become a free WATTever member, and you can save all your comparisons – give each a nickname and access them in the future)

Run the same comparison to see potential costs for retailers offering single-rate tariffs to your address. Select Anytime tariff. Enter the same inputs. Check the shortlist of retailers at the end of this article that may provide offers without demand tariffs – and see if this is better or worse than the Demand Tariff offers.

Currently paying flat rates without demand charges, but find that your address is returning tariffs with demand charges on most retailer websites. How do you know what’s cheaper?

Grab your bill. Start a new comparison.

Select Demand as your Tariff.

Then, enter the number of days.

The amount of electricity used.

You won’t know your Demand Peak (in kWh), but you could use 25% of the average daily energy use as an estimate. So if your household uses 12kWh/day – we suggest a peak of 3kWh. If you are a peaky energy user (think a 6kW A/C unit you’re happy to run flat out at peak times – then reflect that)

Bang. You’ve got a comparison of Demand offers from all retailers.
Save the URL or screengrab. (Better still, become a free WATTever member, and you can save all your comparisons – give each a nickname and access them in the future)

Run the same comparison to see potential costs for retailers offering single-rate tariffs to your address. Select Anytime tariff. Enter the same inputs. Check the shortlist of retailers at the end of this article that may provide offers without demand tariffs – and see if this is better or worse than the Demand Tariff offers.

Switching between tariffs in NSW

You can sidestep this fiasco by switching tariffs to a Time of Use tariff where there are no demand charges. Time of Use tariffs are supported by all retailers giving you a choice of more offers you can easily compare. This is essential if you want to find the best deal. 

Demand tariffs are complicated, making it much harder for households to work out what are the cheapest offers for their situation. Switching tariffs means you’ll avoid the headache of Demand charges and paying the penalty for that one day or night a month you used a bit more power for 30 minutes.

Here are the rules about switching tariff in each network.