Peak cost slug in power pay plans

The West Australian - - NEWS - Daniel Mercer

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.”

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