Mon-Fri 9AM to 8PM (AEST)Electricity Default Market Offer Changes 2024
Australia, watch for the upcoming changes to electricity market offers for 2024. These changes affect the Default Market Offer (DMO), […]
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In this guide, you will learn all about electricity so you can understand each element that makes up the price you pay. You will find out how energy is generated and distributed in the ACT, how this affects the cost of your electricity, and all the other factors that determine your bill. And, most importantly, you’ll learn how to find a cheaper bill for your home or business.
From the time it is made to the time it powers your home, electricity goes on a long journey involving large-scale generators, small-scale renewable sources, thousands of kilometres of wires and the retail company that ties it all together. The costs involved in each step of this journey are all accounted for in your electricity bill, so it pays to understand the process. Below you will find out more about each of the key players involved in providing your electricity.
Being a small territory, it’s not possible to produce all of the ACT’s electricity in the region. However, this doesn’t stop them from leading the nation in renewable energy sources. In 2020, 100% of the ACT’s electricity was sourced from renewable generators, primarily solar and wind, from locations both in the state and in other areas of the country.
The ACT’s renewable power comes from several large-scale generators, including Mugga Lane Solar Park, Royalla Solar Farm, Williamsdale Solar Farm and Royalla Solar Farm. In addition, over 30,000 homes and businesses are fitted with solar panels, equalling about 15% of ACT homes.
This large use of renewables means that if you are an ACT resident, congratulations, you are enjoying the lowest electricity prices in the country!
The ACT is also connected to the National Electricity Market (NEM) or “the grid”. This ensures a consistent and reliable supply of electricity to the region, with the option to import energy from the grid in times of low production from renewable sources. The ACT can also sell electricity back to the grid during times of peak generation.
This does, however, mean that the ACT is not completely safe from variations in the electricity market, and can be affected when the cost of generating electricity in other states rises. More on that later.
Once electricity has been generated it is transported to your home through two steps – transmission and distribution.
The transmission network transports electricity through a high-voltage network, to reduce the loss of electricity during its journey. For the ACT, the transmission network is managed by Transgrid.
Electricity is then converted to a lower voltage and transported to homes and businesses via the distribution network. In the ACT the main distribution network is managed by Evoenergy, although some parts of the region fall into the NSW distribution network, Essential Energy.
This distributor is responsible for maintaining poles and wires, trimming trees, emergency works, connecting homes and meter readings. The costs incurred in doing this are passed onto customers in your electricity bill.
There are 13 electricity retailers in the ACT. It is their role to connect homes and businesses to the distribution network. Each retailer is responsible for covering the costs of the generators and distributors, as well as their own running costs. This means that when there is a variation in any part of the supply chain, your retailer will pass on the cost to you in your quarterly bill.
Retailers are competing with each other to supply you with energy, so you can find some great deals and offers available, especially for new customers, to try to lure you over to their services.
You can read more about the ACT’s energy retailers here.
Average of 4.5 Rating among users
As you can probably imagine, there are a lot of variables that can affect the expenses incurred in each of the steps described above. All of these variables are taken into account when calculating the electricity price you see on your bill.
Several of the main variables are explained below.
If you live in the ACT, luckily the cost of wholesale electricity is the lowest in the country, thanks to the transition to renewable energy. However, the ACT is still connected to the NEM, so changes in the price of wholesale electricity in other parts of the country can affect the total price of your power.
The wholesale price of electricity in Australia can be affected by several factors:
Increase in coal prices – most of Australia’s electricity, particularly in NSW and QLD, is generated using coal-fired power stations. The cost of coal is extremely volatile and can increase for many reasons. Recently, the bushfires and floods, as well as the COVID-19 pandemic have caused national and global distribution issues, pushing the coal price up. The sanctions placed on Russia after the invasion of Ukraine have also caused a spike in global coal prices.
Limited generation – when supply cannot meet demand, the cost of wholesale electricity rises. Supply in the ACT can suffer during suboptimal times of generation from renewable sources, such as low sunlight or poor conditions for wind power. During these times, electricity is imported to the region from other states, which increases the cost of power.
Increased demand – during seasonal peaks, the demand for power goes up. This can be caused by an increase in heating and cooling systems during the coldest and hottest months of the year. A sharp or unforeseen increase in demand results in a spike in the price of wholesale electricity.
Time of the day
The price of electricity varies throughout the day, in response to different levels of demand. During times of peak consumption, ACT consumers pay more for their electricity usage. Peak times are between 5 pm and 8 pm daily (AEST) for residential customers, and 7 am to 5 pm on weekdays (AEST) for small business customers.
Demand is measured in 30-minute intervals during the peak period (e.g. for residential customers, 5.00 pm to 5.30 pm, 5.30 pm to 6 pm, and so on).
Electricity retailers in the ACT offer time-of-use (ToU) tariffs, which include lower rates for energy used in off-peak periods. However, even in peak times, electricity pricing is still highly competitive thanks to electricity being generated by renewable sources.
The state government’s reference price regulates electricity retailers in the ACT. This acts similarly to the Default Market Offer (DMO) and the Victorian Default Offer (VDO).
The reference price was introduced on 1st October 2021 by the Independent Competition and Regulatory Commission (ICRC) and serves two purposes.
Firstly, retailers must use the reference price as a comparison rate for their residential and small business rates to allow customers to effectively compare plans.
Secondly, the reference price acts as a safety net for customers who do not have the capability or time to engage in the market and compare offers. The reference price is the maximum price that retailers can charge these customers.
The ACT government sets the reference price each year, taking into account the current market conditions and the cost of supplying electricity to the region.
With all these factors and variables affecting your bill, it’s important for retailers to be transparent. They do this by breaking down the charges on your bill to reflect the different costs.
On your ACT electricity bill you will see:
Supply charge (also known as a network charge). This is a fixed price per day and is determined by the amount the retailer pays to the distribution network for buying and transporting electricity to your home.
Usage charge. This is the price per unit of electricity usage, measured in kilowatt-hours (kWh). The rate you pay for your usage depends on the retailer and plan you choose. You might pay a different rate at different times of the day or for different appliances, such as heaters or electric vehicles if you have a Time of Use or Controlled-Load plan.
Demand charge. This is the charge for the maximum demand placed on the electricity network to provide reliable and consistent electricity at all times.
With all these factors and variables affecting your bill, it’s important for retailers to be transparent. They do this by breaking down the charges on your bill to reflect the different costs.
On your ACT electricity bill you will see:
Supply charge (also known as a network charge). This is a fixed price per day and is determined by the amount the retailer pays to the distribution network for buying and transporting electricity to your home.
Usage charge. This is the price per unit of electricity usage, measured in kilowatt-hours (kWh). The rate you pay for your usage depends on the retailer and plan you choose. You might pay a different rate at different times of the day or for different appliances, such as heaters or electric vehicles if you have a Time of Use or Controlled-Load plan.
Demand charge. This is the charge for the maximum demand placed on the electricity network to provide reliable and consistent electricity at all times.
To use our 100% free comparison tool to find better ACT electricity providers, simply enter your postcode and let us take care of the rest!
Now that you know all the elements that make up the cost of electricity, you are ready to start comparing plans. Retailers have some fixed costs, such as the supply cost that they pay to the networks, however, they also have a range of variable offers and discounts for ACT customers.
Finding a plan with a rate that suits your needs can lead to some significant savings, so it’s worth doing your research.
When you are comparing plans, there are several things to look out for.
In the ACT 13 different retailers are competing to win your business. To stand out from the crowd, each retailer has a range of rates and discounts on offer. The cheap plan for you will be the one that best suits your particular electricity usage habits.
If you haven’t compared your bill in several years, then you are probably paying the reference price, which is the maximum price for electricity in the ACT. You should look for a cheaper plan by comparing the factors below.
Market offers
Market offers are the plans that retailers offer, and have a range of benefits specific to the retailer. You should look for a market offer that includes rates to match your needs. This might be a plan with low off-peak rates, a high solar feed-in tariff or a ‘controlled load’ tariff that offers special rates for things like swimming pools or electric vehicles.
Other benefits often seen in market offers include fixed-term discounts, no lock-in contracts and no exit fees.
It’s important to understand the terms of your market offer – some include short-term discounts that might be appealing, but might not be the cheap option in the long term.
Special offers and discounts
Along with their market offers, many retailers have special offers and discounts to impress potential customers.
Some common offers include pay-on-time discounts, discounts for going paperless and signing up online, or reduced rates for paying by direct debit.
You can also usually find a discount for bundling your services with one retailer if they offer more than one product, such as electricity, gas, phone and internet.
With so many market offers and discounts available for ACT customers, it can feel overwhelming trying to find the best one. Retailers are now required to show their market offers in comparison to the reference price to make it easier to compare plans from different providers.
If you find a plan you are happy with, make sure you fully understand the terms and conditions of the discount. A lot of offers are for a 12-month period, and after that, you will be transferred to the reference price. By comparing your bill every 12 months, you can be sure you are always getting the best deal.
Other incentives and rewards
As competition heats up between the retailers, some companies are thinking outside the box to reward customers for choosing them. Several retailers offer customers access to a rewards shop, where you can earn points and exchange them for discounts with partner companies such as movies, theme parks, hotels, dining experiences and much more.
Some retailers have also partnered with big Australian brands to reward their customers, for example, Alinta Energy offers 12 months of free access to Kayo when you sign up for their Sports Pack, or you can earn Qantas points when you pay your bill with them.
In addition to discounts provided by energy providers, the ACT government offers a very generous range of discounts and concessions on electricity, natural gas, water and sewerage. These rebates are available to eligible ACT residents who hold one of the below cards:
Centrelink Pensioner Concession Card (PCC).
Centrelink Low Income Health Care Card (HCC).
Veteran’s Affairs Pensioner Concession Card or Gold Card Holders (Prisoner of War, War Widow or Totally Permanently Incapacitated (TPI) Embossed).
ACT Service Access Card.
To find out more contact your energy provider or visit the ACT Utilities Concession page.
Below is a summary of some of our preferred ACT electricity retailers and plans. You can read our full list of retailers here so you can compare and save.
ActewAGL is one of our preferred suppliers. This Canberra based company provides electricity and gas to Canberra and its surrounds, including Queanbeyan, Goulburn, the Snowys, Nowra and the South Coast.
Our favourite feature
As you might expect from a Canberra based electricity company, ActewAGL is 100% carbon neutral, and supports electricity efficiency through plans such as the EVolve plan, offering 4,000 km of free electric car charging every year and the Virtual Power Plant plan, which rewards solar battery owners with low rates.
Our favourite plan
Our favourite ActewAGL plan is the Good to Go plan. This offers a huge 20% discount on the reference price, with rates guaranteed for 12 months for extra peace of mind. It also offers no exit fees and flexible payment options, including full-pay or even-pay.
As one of the ‘Big Three’ energy retailers and one of our preferred suppliers, there’s a lot we love about EnergyAustralia.
Our favourite feature
EnergyAustralia has a proven track record for customer service and has introduced some innovative digital options to the mix. As a result, they have been awarded first prize in the Digital Customer Experience category for 6 years running by Global Reviews.
Our favourite plan
Our favourite EnergyAustralia plan for ACT residents is the No Frills and NBN 100 bundle. This electricity and gas plan gives you a 12% discount on the reference price, plus by bundling with the NBN you get an additional $10 off per month. The plan can be made 100% carbon neutral at no extra cost and you get a $50 sign-up credit when you join online.
To switch your plan call CheapBills on 1300 786 045 or enter your details here.
Now that you are armed with knowledge, you can compare with confidence. To make sure that the plan you choose is right for you, there are a couple of steps you need to complete first.
It’s important to understand how you use electricity in your home or business so that you find a rate that will work for you. Our team of comparison experts will discuss your unique needs, including your off-peak usage, special items such as solar panels or an electric vehicle and any other energy needs for your home, such as natural gas. With this knowledge, we can help you comparison of electricity prices and tariffs, to find the best deal and start saving.
You should also review your other financial commitments so that you know your budget. Before you commit to a new plan, take a look at your whole financial situation, including mortgages, car loans, credit cards, life insurance and other financial products. If you need to reduce your budget, take a look at our energy saving tips.
Now that you are armed with knowledge, you can compare with confidence. To make sure that the plan you choose is right for you, there are a couple of steps you need to complete first.
It’s important to understand how you use electricity in your home or business so that you find a rate that will work for you. Our team of comparison experts will discuss your unique needs, including your off-peak usage, special items such as solar panels or an electric vehicle and any other energy needs for your home, such as natural gas. With this knowledge, we can help you comparison of electricity prices and tariffs, to find the best deal and start saving.
You should also review your other financial commitments so that you know your budget. Before you commit to a new plan, take a look at your whole financial situation, including mortgages, car loans, credit cards, life insurance and other financial products. If you need to reduce your budget, take a look at our energy saving tips.
Comparing your bill and making the switch can be time-consuming. As you’ve just read, there’s a lot to consider before you commit. Let CheapBills do the hard work for you. Not only will our comparison tool find you the best and cheap plan, but we’ll also take care of the switch for you, so you can sit back and enjoy the savings!
Call CheapBills on 1300 786 045 or enter your details here.
Our staff will help you find the best electricity rate for your family.
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