Peak cost slug in power pay plans
Electricity consumers who are a drain on the power grid during peak periods will be charged more under mobile phone-style payment plans being rolled out in two of WA’s biggest towns.
Energy Minister Ben Wyatt will today announce regional electricity provider Horizon Power is extending to Broome a groundbreaking pricing model he says could slash costs for consumers.
Mr Wyatt said he was keen to use the model as a template for further power pricing reform across the State after it was successfully tested in Port Hedland last year.
Under the model, customers are given payment plans that charge them according to how much pressure they put on the grid in peak demand times.
The plans, which are based on historical usage patterns, give customers a monthly “allowance” of energy they can use between 1pm and 8pm on business days. Homes and businesses that use the most power during the peak period will be charged a higher monthly fixed sum than customers who draw relatively little from the grid.
Households that stay within their limits can receive credits on their bills of up to $300, rising to $900 for businesses.
Take-up of the plan will not be compulsory, with Horizon expecting about 800 customers to sign up in both towns.
Mr Wyatt said current electricity tariff structures were unsustainable because they did not reflect the underlying costs that drove people’s bills.
He said mobile phone-style payment plans offered a neat way of solving this problem by “empowering” consumers to change their behaviour to save money in a way that could cut massive costs from the network.
Reducing demand at peak periods avoided the need for expensive upgrades to the grid to cope with demand.
With Western Power set to install 350,000 “advanced” meters over the next four years that enable such tariffs, Mr Wyatt said there would be scope to roll out similar policies across WA’s south.
“One thing we do know is the impact on our power bills is all driven by investment in the grid to serve peak periods,” he said.
“If we can reduce the demand at those peak times there is less requirement to therefore spend money upgrading and maintaining for peak times.
“It’s something I’m keen over time to have this rolled out more broadly.”