Moreland Energy Foundation

MEFL has recently received a number of phone calls from disappointed residents who have found they are paying more for their electricity after installing solar.

Many Moreland residents are finding they are shifted onto different rates, or ‘tariffs’, for the electricity they buy after they’ve installed solar and signed up for the solar Premium Feed-in Tariff. Typically, people are being shifted from flat-rate tariffs of around 17-19 c/kWh, onto ‘time-of-use’ tariffs, with off-peak rates as low as 12c/kWh, but peak rates up around 26-28 c/kWh. With the off-peak period defined as from 11pm to 7am, there is little opportunity to benefit from the lower off-peak rates.

The Victorian Government has recently announced a moratorium on aspects of the smart meter roll-out, effective from March 22nd, 2010. The moratorium was announced in response to concerns raised by advocacy and consumer groups on the impacts for customers of new ‘time-of-use’ pricing structures.

As smart meters measure electricity consumption in half-hourly intervals, the roll-out enables the introduction of innovative pricing structures, such as time-of-use tariffs whereby you pay different prices for consumption (based on the time of day and/or the season). It is fears around the impact on low-income customers of some of the pricing structures being proposed by some energy businesses that has prompted the moratorium.

A couple of years ago the Victorian government mandated the introduction of smart meters to all households and small businesses in Victoria over four years, commencing in September 2009. Electricity distribution businesses are now gradually replacing all existing meters on a suburb-by-suburb basis.

Although estimates vary, the cost for replacing existing meters is approximately $40- $50 per household. This cost will be paid off over time via an increase to the metering fee on your electricity bill. This increase began to appear on all consumer bills from 1 January 2010, regardless of when your meter is changed over. The fee is set by the Australian Energy Regulator.

Why?

The main claimed benefit from introducing smart meters across the State is economic – specifically, efficiencies in meter reading, connections and disconnections and fault detection. Basically, as all smart meters can be read and connected remotely, there is no longer any need to send someone around to read your meter.

Additionally, as they measure electricity consumption in half-hourly intervals, they enable the introduction of innovative pricing structures, such as time-of-use tariffs whereby you pay different prices for consumption, based on the time of day and/or the season. For example, retailers may charge higher rates for energy used during peak times (e.g. midday on weekdays, or during the summer months) and less at times of low demand (at night or during winter).