NSW Energy Prices July 2015

Transcription

1 NSW Energy Prices July 2015 An Update Report on the NSW Tariff-Tracking Project July 2015

2 NewSouthWalesEnergyPricesJuly2015 AnUpdatereportontheNSWTariffATrackingProject MayMausethJohnston,July twitter.com/alvissctwitter.com/vinniesaust Contact:GavinDufty Manager,SocialPolicyUnitVictoria StVincentdePaulSociety Phone:(03) or twitter.com/gavindufty StVincentdePaulSocietyandAlvissConsultingPtyLtd Thisworkiscopyright.ApartfromanyusepermittedundertheCopyrightAct1968(Ctw),no parts may be adapted, reproduced, copied, stored, distributed, published or put to commercialusewithoutpriorwrittenpermissionfromthestvincentdepaulsociety. 1

3 Disclaimer Theenergyoffers,tariffsandbillcalculationspresentedinthisreportandassociated workbooks should be used as a general guide only and should not be relied upon. The workbooks are not an appropriate substitute for obtaining an offer from an energyretailer.theinformationpresentedinthisreportandtheworkbooksisnot providedasfinancialadvice.whilewehavetakengreatcaretoensureaccuracyof theinformationprovidedinthisreportandtheworkbooks,theyaresuitableforuse onlyasaresearchandadvocacytool.wedonotacceptanylegalresponsibilityfor errorsorinaccuracies.thestvincentdepaulsocietyandalvissconsultingptyltddo not accept liability for any action taken based on the information provided in this reportortheassociatedworkbooksorforanyloss,economicorotherwise,suffered as a result of reliance on the information presented. If you would like to obtain information about energy offers available to you as a customer, go to Australian Energy Regulator s Energy Made Easy website or contact the energy retailers directly. 2

4 Acknowledgements ThisprojectwasfundedbyEnergyConsumersAustralia ( advocacyprojectsandresearchprojectsforthebenefitofconsumersofelectricity andnaturalgas. TheviewsexpressedinthisdocumentdonotnecessarilyreflecttheviewsofEnergy ConsumersAustralia. 3

5 NoteregardingtheRepealofthecarbontaxbill On23June2014theGovernmentreintroducedtheCleanEnergyLegislation(Carbon TaxRepeal)Bill2013[No.2]intheHouseofRepresentatives.Thebillrepealedthe sixactsthatestablishedthecarbonpricingmechanism.thesenatepassedthebill on17july2014andretailerswererequiredtopublishnew,carbonexclusive,prices andbackdatetheseto1july. As the methodology of the Vinnies TariffcTracking project is based on providing annual price updates as of July every year, the July 2014 tariffs collected were carboninclusive.assuch,themainanalysispresentedinthisreportisbasedonjuly 2014prices(carboninclusive)andJuly2015prices(carbonexclusive).However,we haveassessedtheimpactoftherepealofthecarbontax,comparedtootherfactors, byusingseparatesourcestoestimatebillspriortotherepeal,aftertherepealandas ofjuly AlvissConsultingcollectedandanalysedcarbonexclusivepricesasofOctober2014fortwo separateprojects:taxon,taxoff:electricitypricesbeforeandaftertherepealofthecarbon tax,november2014(electricitypricesonly)andresidentialelectricityandgaspricesfrom January2012toJanuary2015,AreporttotheACCC,March

6 TableofContents Acknowledgements 3 NoteregardingtheRepealofthecarbontaxbill 4 TheNSWTariffATrackingProject:purposeandoutputs 6 Keyfindings 7 1.EnergypricechangesfromJuly2014toJuly MarketoffersJuly ElectricitymarketoffersJuly PotentialsavingscDifferencesbetweenelectricityoffers GasmarketoffersJuly PotentialsavingscDifferencesbetweengasoffers DualfueloffersJuly Retailmarketdevelopments Thepricecspread Latepaymentfees 38 4.Networkcharges 40 5.Totalcostofenergybyarea InnerSydney,NorthernSydney,Swansea,Newcastle,Maitland,Cessnock 44 SingletonandUpperHunter 5.2 Western Sydney, Wollongong, Blue Mountains, Lithgow, Kandos, Moss 46 Vale,Nowra,Ulladulla 5.3RuralandRegionalNSW 47 5

7 TheNSWTariffATrackingProject:purposeandoutputs Todate,thisprojecthastrackedelectricityandgastariffsinNSWfromJuly2009to July2015,anddevelopedaspreadsheetcbasedtoolthatallowsconsumeradvocates tobuildontheinitialanalysisandcontinuetotrackchangesastheyoccur. 2 Thefirst reportforthenswtariffctrackingprojectwaspublishedinaugust2011andthisis thefourthupcdatereportfocusingonpricechangesthathaveoccurredoverthelast year. Wehavedevelopedfourworkbooksthatallowtheusertoenterconsumptionlevels andanalysehouseholdbillsfornswgasandelectricityoffers. Workbook1:RegulatedelectricityoffersJuly2008cJuly2015 Workbook2:RegulatedgasoffersJuly2009cJuly2015 Workbook3:ElectricitymarketoffersJuly2011,2012,2013,2014and Workbook4:GasmarketoffersJuly2011,2012,2013,2014and2015 Thefourworkbooksandthereportsareavailableatwww.vinnies.org.au/energy 2 Theregulatedelectricityoffersworkbookalsocontainsthe2008rates 3 Allmarketoffersarepublishedoffersanddonotincludespecialoffersthatretailersmarket throughdoorcknockingcampaignsorbrokers.weusetheretailers websitestocollect marketofferforthetariffctrackingtool.iftheretailerhasmorethanonemarketofferwe usetheofferwiththebestrates/discountsthatdonotrequiredirectdebitarrangements. TheTariffcTrackingtooldoesnotincludeanyadditionaldiscountsorbonusesbutkeymarket offerfeaturesarelistedinthespreadsheets.thisreportcontainsanalysisofsomeofthose features. 6

8 Keyfindings NSW electricity retail prices taking effect in July 2015 produce annual bills thataretypically190c400,or9%c13%,less(dependingonnetworkarea andmetertype)thantheywerelastyear(july2014). 4 Seechart1insection1 below. Electricity customers on the regulated rate prior to 1 July 2014 (approximately 35% of residential customers) were transferred to the transitionaltariff. 5 Customersonthe transitionaltariff havereceivedeven greater electricity price decreases of between 235 and 655, or 11% and 21%(dependingonnetworkareaandmetertype).Seechart2insection1. Themainreasonsforthesepricedecreasesaretherepealofthecarbontax and the lower regulated network charges. In Essential s network area the reducednetworkpriceisthemaincontributorwhiletherepealofthecarbon taxhasbeenthemaindriverfordecreasesinausgridandessential sareas. Seechart3insection1. Gas prices have decreased significantly in two pricing zones (the Jemena SydneyzoneandtheJemenaruralzonethatcoversGoulburn,Boorowa,Yass andyoung).gaspricesinthealburyandmurrayriverregion,ontheother hand, have increased. While gas prices did reduce post the repeal of the carbontax,itisnotthemaincontributortofallinggasprices.seechart7in section1. The overall price reduction to average market offer bills from July 2014 to July2015is220c380perannum,or11%c14%.However,westressthata largeproportionofthisreductionisbasedonbillsbeingpaidontime.ifthese conditionaldiscountsarenotobtained,theaveragemarketofferhasreduced by 9% c 13% over the same period. This is the same reduction we have registeredforelectricitystandingoffers.seesection2. Customers switching from the worst electricity standing offer to the best market offer can save up to 550 c 1,050 per annum (depending on the networkarea)ifbillsarepaidontime. 6 Seesection BasedontheaveragestandingoffersasofJuly2014andJuly NSWderegulatedelectricityretailpriceson1July2014.Thetransitionaltariffexpireson1 July2016andhouseholdsstillonthistariffbythen,willbemovedtotheirretailer'sdefault standingoffer. 6 Basedontheworststandingoffer(7,200kWh,singlerate)andthebestofthepublished marketoffers(includingadditionaldiscountsand/orpayontimediscounts). 7

9 Customers switching from the transitional electricity offer to the best marketoffercansaveupto190perannuminausgrid sareaand300in EndeavourandEssential snetworkareas. 7 Seesection2.1. The difference between electricity market offers is also significant. The differencebetweenthesinglebestandthesingleworstmarketofferranges from590perannum(inendeavour sarea)to1,060(inessential sarea)for customers with typical consumption levels. 8 The difference, or the pricec spread,isthussignificantlygreaterthanlastyearwhentherangewas340 to450.seesection2.1. Typical consumption gas customers in Jemena s Sydney price zone, can potentially save 120 on their annual gas bill (including pay on time discounts) by switching from the regulated offer to Covau s market offer. 9 Seesection2.2 Thedifferencebetweenelectricitystandingofferbillsandmarketofferbillsis increasing. In the Endeavour network (Western Sydney), for example, the averagestandingofferisnow13%morethantheaveragemarketoffer.see chart21insection3.1. Two years ago (July 2013), the incumbent retailer inausgrid selectricity networkarea,energyaustralia,hadstandingofferpricesthatwere8%higher thanitsmarketoffer(includingdiscounts).asofjuly2015,thedifferenceis 17%.Seechart22insection3.1. The difference in annual bills between customers that pay on time and customersthatpaylateisalsoontheincrease.injuly2013,annualelectricity market offer bills were on average 6% more (or 130) for late paying customers compared to customers that paid on time in Ausgrid s network area.asofjuly2015,thedifferenceisalmost13%or230perannum.see chart23insection3.2. InJuly2015theelectricityNetworkUseofSystemcharges(NUOS)decreased in all network areas and the annual NUOS bill for average consumption householdsinessential s network(country NSW) is now less than it was in 2010.Seechart24insection4. 7 Basedonthe transitionaloffer (7,200kWh,singlerate)andthebestofthepublished marketoffers(includingpayontimediscounts). 8 Householdsusing7,200kWhperannum(singlerate),marketoffersincludepayontime discounts. 9 Basedontheregulatedoffer(24,000Mjperannum)andthebestofthepublishedmarket offers(includingadditionaldiscountsand/orpayontimediscounts). 8

10 9 The annual energy cost for dual fuel households with typical consumption levels has decreased by between 190 and 575. Households in Bathurst, Orange, Dubbo and Parkes are receiving the biggest price cuts while the NowraandShoalhavenregionisatthelowerend. 10 Seesection5. 10 Basedaverageelectricitystandingoffer(7,200kWhperannum,singlerate)andthe regulatedgasoffer(24,000mjperannum)asofjuly2014and2015.

11 1.EnergypricechangesfromJuly2014toJuly AcomparisonoftheJuly2014averageretailstandingoffer(acrossallretailers)with the July 2015 average offer shows that electricity costs have decreased. Prices are now typically 190 c 400 less per annum(depending on network area and meter type)comparedtooneyearago.chart1belowshowsannualdecreasesforaverage consumptionhouseholds(permetertype)inthethreenetworkareas. Chart1ChangestotheannualelectricitybillfromJuly2014toJuly2015(averagestanding offer), Based on7,200kwhperannumforsinglerateand8,000kwhperannumfor customerswithcontrolledload(30%offcpeak1),inclgst Difference(()( 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 218% Single%rate% 191% 193% 190% 407% Two%rate% 367% Ausgrid% Endeavour% Essential%% Customers on the transitional offer have received even greater electricity price decreasesofbetween235and655,or11%and21%(dependingonnetworkarea andmetertype). 12 Chart2belowshowsannualdecreasesforaverageconsumption households(permetertype)inthethreenetworkareas. 11 Thesecalculationsarebasedonchangestotheaveragestandingofferforsinglerate electricitycustomersusing7,200kwhperannum,changestotheaveragestandingofferfor controlledloadelectricitycustomers(typicallyallcelectrichouseholds)using8,000kwhper annum(thereof30%offcpeak)andchangestotheregulatedofferforgascustomersusing 24,000Mjperannum. 12 Electricitycustomersontheregulatedratepriorto1July2014weretransferredtothe transitionaltariff.thetransitionaltariffexpireson1july

12 Chart 2 Decreases to the annual electricity bill from July 2014 to July 2015(transitional offer), Based on 7,200kWh per annum for single rate and8,000kwhperannumfor customerswithcontrolledload(30%offcpeak1),inclgst 0% Single%rate% Two%rate% Difference(()( 100% 200% 300% 400% 500% 245% 236% 377% 352% 657% 561% Ausgrid% Endeavour% Essential%% 600% 700% While standing offer prices in NSW have fallen by 9% c13%since July 2014, it is importanttonotethattherepealofthecarbontaxon17july2014(resultinginnew prices being backdated to 1 July 2014) is the main contributor to these price decreasesintheausgridandendeavournetworks.chart3belowshowsannualbills asofjuly2014(carboninclusive),october2014(carbonexclusive)andjuly2015.it shows that a typical annual bill in the Ausgrid network reduced by approximately 160(or7%)aftertherepealandhassincethenreducedbyafurther50(or2.5%). In the Endeavour network a typical bill reduced by 160 after the repeal and has remainedstable(slightdecrease)sincethen.intheessentialnetwork,however,the impact of the regulated network price changes in July 2015 is greater than the impact of the repeal. A typical annual bill reduced by 170(5.5%) after the repeal buthassincethenreducedbyafurther240(8.5%). 11

13 Chart3Estimatedannualbillsforelectricitystandingoffers,July2014andJuly2015(7,200 kwhperannum,singlerate,incgst) 3,100% 3,000% 2,900% 2,800% 2,700% 2,600% 2,500% 2,400% 2,300% 2,200% 2,100% 2,000% 1,900% Charts4c6showestimatedannualbillsforsingleratecustomers(7,200kWh/annum) ineachofthethreenetworkareas.inausgrid snetworkarea,allretailershavelower standing offers compared to last year with the exception of Red Energy. 13 Five retailershavestandingofferratesthatproducehigherannualbillsthantheaverage, these are: Sanctuary, Commander, Click, Momentum and Dodo. The difference betweenthehighest(sanctuary)andthelowest(covau)standingofferbillis400. Chart4Ausgrid:Annualcostofelectricitystandingoffers,July2014vs.July2015,Basedon 7,200kWhperannumforsinglerate,inclGST 2,500% 2,400% 2,300% 2,200% 2,100% 2,000% 1,900% 1,800% 1,700% 1,600% Jul14% Oct14% Jan15% Apr15% Jul15% AGL% Origin% Powerdirect% Red%Energy% Click% Dodo% Lumo% Energy%Aus% Momentum% Qenergy% Simply% Powershop% Covau% Sanctuary% Commander% Diamond% Ausgrid% Endeavour% Essential%% Jul'14% Jul'15% Avg.%2015% 13 Asnewretailersenterthemarketandsomeretailersexit,notalloftheretailersincluded inthisyear sanalysisofferedelectricitytonswconsumersinjuly2014.furthermore,some retailersdid(e.g.simply)butwerenotincludedinthetariffctrackinganalysisbecauseof inaccessibleorunreliabletariffinformation. 12

14 IntheEndeavourEnergynetworkarea,thepricecspreadislowerthanitisinthe Ausgridarea.Thedifferencebetweenthehighest(againSanctuary)standingoffer billandthelowest(powershop)is285. Chart5Endeavour:Annualcostofelectricitystandingoffers,July2014vs.July2015,Based on7,200kwhperannumforsinglerate,inclgst 2,500% 2,400% 2,300% 2,200% 2,100% 2,000% 1,900% 1,800% 1,700% 1,600% 1,500% AGL% Origin% Powerdirect% Red%Energy% Click% Dodo% Lumo% Energy%Aus% Momentum% Qenergy% Simply% Powershop% Covau% Sanctuary% Commander% Diamond% Jul'14% Jul'15% Avg.%2015% In the Essential Energy network, on the other hand, the pricecspread is significant. Thedifferencebetweenthesinglehigheststandingoffer(Sanctuary)andthelowest (Covau)is760perannum. Chart5Essential:Annualcostofelectricity,July2013(regulatedrate)vs.July2014(standing offers),basedon7,200kwhperannumforsinglerate,inclgst 3,300% 3,100% 2,900% 2,700% 2,500% 2,300% 2,100% 1,900% 1,700% 1,500% AGL% Origin% Powerdirect% Red%Energy% Click% Dodo% Lumo% Energy%Aus% Momentum% Simply% Qenergy% Powershop% Covau% Sanctuary% Commander% Diamond% Jul'14% Jul'15% Avg.%2015% 13

15 As the NSW Government decided not to deregulate the gas retail market, the Independent Pricing and Regulatory Tribunal (IPART) continues to regulate the standingoffergasratesinnsw. Compared to July 2014, gas prices have reduced significantly in the two Jemena zones(sydneyandthesouthernriverina/goulburnarea).mostothergaszoneshave receivedamoderatetosmallpricedecreasewiththeexceptionoftheoriginzones inthealburyandmurrayriverregion.theannualgasbillisdownby175,or16%, for average consumption households in Sydney while households in the Albury/Murraygaszoneshavehadanincreaseofapproximately40totheannual bill. Chart7ChangestotheannualcostofgasfromJuly2014toJuly2015forhouseholdsusing 24,000Mjperannum (increase(to(annual(bill( 100% 50% 0% 50% 100% 150% 200% The three standard gas retailers are AGL, ActewAGL and Origin Energy. Jemena s Sydney zone (AGL) is the largest in terms of customer numbers. Origin is the incumbentretailerinsevenpricingzoneswhileactewaglisinthree. 14

16 Table1GassupplyareasinNSW NSWGasZonesandhostretailers JemenaSydney(AGL) Sydney,Newcastle,Wollongong,BlueMountains JemenaRegional(ActewAGL) Boroowa,Goulburn,YassandYoung Envestra(Origin) CoomaandBombala Temora*,Holbrook,Henty,CulcairnandWallaWalla TumutandGundagai WaggaWaggaandUranquity Albury,MoamaandJindera MurrayValleyTowns Centralranges(Origin) Tamworth ActewAGL(ActewAGL) QueanbeyanandBundgendore Shoalhaven *TemorahasbeenunderthesamepricingzoneasHolbrook,Hentyetc.sinceJuly2013 Thedifferencebetweenwinterandsummerconsumptionwillvarysignificantlyfrom householdtohousehold(dependingprimarilyuponusageofgasspaceheating).the chartsbelowdonotadjustforincreasedwinterconsumptionbutassumeconsistent consumptionlevelsthroughouttheyearand,forseasonaltariffs,thewinter/summer priceshavebeenallocatedaccordingtothetimeframestowhichtheyapply,e.g.4 monthswinterpeak(33.33%oftheyear)and8monthssummeroffcpeak(66.66%of theyear).becauseoftheseasonalityofgasconsumptionandgastariffstheannual bill calculations presented in this report are indicative only, and their primary purposeistotrackchangesovertimeandanalysedifferencesbetweengaszones. Chart 8 below shows annual gas bills for the Jemena/Sydney zone based on the regulated gas offers as of July 2014 (carbon inclusive), October 2014 (carbon exclusive), January and July They show that households experienced a price decrease(approximately50)duetothecarbonrepealandthatpricesdecreasedby afurther120injuly

17 Chart8EstimatedannualbillsforregulatedgasoffersinAGL/Jemena sarea,july2014and July2015(24,000Mjperannum,incGST) 1,200% 1,150% 1,100% 1,050% 1,000% 950% 900% 850% 800% 750% 700% Charts9and10belowshowannualgasbillsfortheregionalgaszonesbasedonthe regulated gas offers as of July 2014 (carbon inclusive) and July 2015 (carbon exclusive). Chart9EstimatedannualbillsforregulatedgasoffersinOrigin sareas,july2014andjuly 2015(24,000Mjperannum,incGST) 14 (per(annum( 1,300% 1,200% 1,100% 1,000% 900% 800% 700% 600% 500% 400% 300% Jul14% Jul15% 14 Note:TheCoomazoneincludesBombala.TheHentyzoneincludesHolbrook,Culcairn, TemoraandWallaWalla.TheTumutzoneincludesGundagai.TheWaggaWaggazone includesuranquity.thealburyzoneincludesmoamaandjindera.themurrayvalleyzone coversmurrayvalleytowns. 16

18 Chart10EstimatedannualbillsforregulatedgasoffersinActewAGL sareas,july2014and July2015(24,000Mjperannum,incGST) 15 (per(annum( 1,100% 1,000% 900% 800% 700% 600% 500% 400% Jul14% Jul15% Table2and3belowhighlightsomeofthepricetrendsforNSWelectricityandgas offers. For more detailed information about the areas and differences in energy pricechangesseesection5. Table2ChangestoelectricitypricesbyareaJuly2014 July Changestoannualbillsince Percentage Area July2014 Singlerate Tworate^ InnerSydney,theCentralCoast uptonewcastle,andinland areassuchasmaitland, Cessnock,SingletonandUpper Hunter(Ausgrid) WesternSydney,mostofthe IllawaraCoast,theBlue Mountainsandinlandtowns suchaslithgowandkandos (EndeavourEnergy) MostofruralandregionalNSWA fromnorthofportstephensand Murrundi,southofBatemans BayandeastofLithgow (EssentialEnergy) c220 c190 c400 c190 c190 c370 ^Forallcelectrichouseholdswithpeak/offcpeak(controlledload)rates c9% c8c9% c13% 15 Note: The Boorowa zone includes Goulbourn, Yass and Young. The Queanbeyan zone includesbungendore. 16 Basedonhouseholdconsumptionof7,200kWhperannumattheaveragestandingoffer rateforthesingleratetariff.thesecondcalculationisbasedonhouseholdconsumptionof 8,000kWhperannumattheaveragestandingofferrateforthecontrolledloadtariff. 17

19 Table3ChangestogaspricesbyareaJuly2014 July Area Changestoannualbill Percentage sincejuly2014 Sydney,Newcastle,Wollongong, c175 c16% BlueMountains(AGL) CoomaandBombala(Origin) c20 c2% Temora,Holbrook,Henty,Culcairn c20 c2% andwalla(origin) TumutandGundagai(Origin) c20 c2% WaggaWaggaandUranquity c20 c2% (Origin) Tamworth(Origin) 0 0% Boroowa,Goulburn,Yassand c155 c14% Young(ActewAGL) QueanbeyanandBundgendore c6 c1% (ActewAGL) Shoalhaven(ActewAGL) 0 0% Albury,MoamaandJindera(Origin) 35 6% MurrayValleyTowns(Origin) 40 4% 17 Basedontheregulatedgasratesforcustomersusing24,000Mjperannum. 18

20 2.MarketoffersJuly2015 Section 1 above shows that the retailers electricity standing offers decreased post the repeal of the carbon tax as well as in July 2015(especially in Essential s area). Average market offers also decreased post the repeal(by 6%) and continued to declineslightlyinjanuaryandapril2015,beforereducingbyanother4%c7%injuly 2015(see chart 11). The overall price reduction to average market offer bills from July2014toJuly2015is220c380perannum,or11%c14%.However,westress thatalargeproportionofthisreductionisbasedonbillsbeingpaidontime.ifthese conditionaldiscountsarenotobtained,theaveragemarketofferhasreducedby9% c 13% over the same period. This is the same reduction we have registered for electricitystandingoffers. It should also be noted that retail market offers typically feature high pay on time discountsthatareappliedtotheusagecomponentofbillsonly.however,asthese usagechargesarenowlowerconsumersmayeasilyoverestimatethebenefitsofa slightlyhigherdiscount.consumerslookingtoswitchretailersshouldthereforenot justlookforthehighestdiscount.forexample,a10%payontimediscountoffusage chargeswillproducea10savingiftheusagechargesare100.a12%payontime discount will produce an 8.40 saving if the usage charges are 70. It is therefore importantthatconsumersunderstandwhatthediscountappliestoandhowmuchit translates to in actual dollar terms. In addition, the fixed supply charges have not reduced, effectively resulting in the fixed supply charge becoming a larger proportional component of bills for market offer customers compared to standing offercustomers. Our NSW TariffcTracker data shows that the consumption price (cents per kwh) component of average market offer rates (prior to discounts) reduced by 9%c15% (depending on network area) from July 2014 to July The fixed supply charge (centsperday),however,increasedby1%overthesameperiod.atthesametime, the fixed charges attracted an average discount of approximately 3% in both July 2014andJuly2015,whiletheaveragediscountforusagechargesincreasedto8.5% injuly2015(from5%injuly2014). 19

21 Chart11AverageelectricitymarketoffersfromJuly2014toJuly2015foreachofthethree networkareas.billcalculationsincludediscounts,payontimediscountsandgstc Householdsconsuming7,200kWhperannum(singlerate) 18 2,800% 2,700% 2,600% 2,500% 2,400% 2,300% 2,200% 2,100% 2,000% 1,900% 1,800% 1,700% 1,600% 1,500% Jul'14% Oct'14% Jan'15% Apr'15% Jul'15% Essential% Ausgrid% Endeavour% Inrelationtogas,section1showsthattheregulatedgasofferdecreasedby4.5% aftertherepealofthecarbontaxandafurther12%injuly2015.theaveragegas marketofferdecreasedby7%aftertherepealofthecarbontaxandafurther17%in July2015(seechart12).Whilethegasmarketoffersfollowthesamepatternasthe gasstandingoffers,theoverallpricereduction(includingpayontimediscounts)has beenhigher. 18 Sources:July2014and2015pricesfromStVincentdePaulSociety snswtariffctracker; October2014pricesfromAlvissConsulting,Taxon,Taxoff:Electricitypricesbeforeandafter therepealofthecarbontax,november2014;january2015pricesfromalvissconsulting, ResidentialelectricityandgaspricesfromJanuary2012toJanuary2015,Areporttothe ACCC,March2015;April2015pricesfromAlvissConsulting sdatacollectionservice. 20

22 Chart12Averagegasmarketoffer(singlefueloffersonly)fromJuly2014toJuly2015.Inthe Jemena/Sydneygaszone.Billcalculationsincludediscounts,payontimediscountsandGSTc Householdsconsuming24,000Mjperannum 19 1,100% 1,000% 900% 800% 700% 600% 500% Jul14% Oct14% Jan15% Apr15% Jul15% 2.1ElectricitymarketoffersJuly Typical consumption households (7,200kWh) can save 550 c 1,050 per annum (depending on their network area) if switching from the worst standingoffertothebestmarketoffer. 21 The greatest potential saving is in Essential s network area (approximately 1,050). 22 Thisis340morethancustomersswitchinginJulylastyearcould achieve. Customersswitchingfromthe transitionaloffer tothebestmarketoffercan save up to 190 per annum in Ausgrid s area and 300 in Endeavour and Essential snetworkareas Ibid 20 Themarketofferswerecollectedbetweenthe15 th andthe21 st ofjuly2015anditshould benotedthatretailersmaychangetheirratesatanytime.asretailers tariffinformationcan beinaccessible(i.e.informationlackingfromtheirwebsite)orunreliable(i.e.tarifforoffer informationappearsoutdatedorincorrect),wehavenotbeenabletoincludesimplyenergy inouranalysispertainingtoendeavourandessential snetworkareas.furthermore,wenote thattworetailers(powerdirectandsanctuary)mayhavechangedtheirofferswithout updatingtheirwebsites.wethereforecautionreaderstorelyonspecificfindingsinrelation totheseretailers. 21 Basedontheworststandingoffer(singlerate)andthebestofthepublishedmarketoffers (includingadditionaldiscountsand/orpayontimediscounts). 22 Ibid. 21

23 The difference between the best and the worst market offer ranges from 590 per annum (in Endeavour s area) to 1,060 (in Essential s area) for customers with typical consumption levels. 24 The difference, or the pricec spread, is thus significantly greater compared to last year when the range was340to450. The big pricecspread is somewhat skewed by the single worst retail offer in each network area (Sanctuary s offers). If we exclude these outliers, the difference between the best and the worst market offer ranges from 360 per annum (in Endeavour s area) to 810 (in Essential s area). 25 Chart 13 below shows the retail market offer pricecspread within each of the three networkareas. Chart13PricecspreadforfifteenelectricitymarketoffersineachnetworkareapostJuly 2015(inclGST),includingdiscountsandpayontimediscountscHouseholdsconsuming 7,200kWhperannum(singlerate) (per(annum( 3,200% 3,000% 2,800% 2,600% 2,400% 2,200% 2,000% 1,800% 1,600% 1,400% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% Ausgrid% Endeavour% Essential% Retail(offers( Table 4 below shows additional discounts applicable to the electricity retailers publishedmarketofferrates.table4alsoshowsothercontracttermsandfeatures, such as early termination fees, associated with these market offers. Some of the retailershavemultiplemarketoffersandmayofferhigher(orlower)discountsthan those listed here. However, if the discounts are higher they are tied to other conditionssuchaspaymentbydirectdebit Basedonthe transitionaloffer (7,200kWh,singlerate)andthebestofthepublished marketoffers(includingadditionaldiscountsand/orpayontimediscounts). 24 Householdsusing7,200kWhperannum(singlerate)andallmarketofferbillsinclude additionaldiscountsand/orpayontimediscounts. 25 Ibid 26 Momentum,forexample,hasintroducedadirectdebitdiscountwherecustomersreceive a2%discountoffthemarketofferelectricityrates(theirsmilepowerproduct).this discountisnotincludedinthebillcalculationspresentedinthisreport. 22

24 Table 4 Published electricity market offers post July 2015: Key additional features and contractconditions Guaranteed discounts Contract term/ benefit period Early Termination Fee Late Payment Fee Payontime discounts Other AGL No 1year No %offusage Yes^ Origin No 1year No 12 18%offusage Yes Click No No No 12 7%offbill No Simply 10%offbill^^ 2years Upto143 No No No Energy No 1year No 12 18%offusage No Australia Dodo No No No No 20%offusage No Momentum No 1or3years 49.50or No No No 99 Powerdirect No 3years %offusage Yes Red No 2years Upto95 No 10%offbill Yes Lumo No 2years Upto75 No 10%offbill Yes Powershop No No No No 12%offbill* Yes Covau No 1year 25 No** 16%offusage Yes Diamond No 2years %offbill Yes Sanctuary No 3years No** 25 No No Commander No No No No 20%offusage No ^AGL sofferincludesafurther2%offconsumptionratesfordualfuelcustomers. ^^Simplyoffersa10%discountinAusgrid sareaanditdoescurrentlynothavepublishedoffersfor othernetworkareas *Powershop sdiscountisconditionaluponthecustomerregularlypurchasingtheironlinesaver product. **Retailers Factsheetsdonotmentionthisfee Note:Examplesofotherfeaturesincludeloyaltybonuses,creditstotheaccountuponcommencinga contractandshopvouchers. 23

25 2.1.1PotentialsavingsADifferencesbetweenelectricityoffers Typicalconsumptionhouseholds(7,200kWhperannum)ontheworststandingoffer can save 550 c 1,050 per annum if switching to the best published market offer (depending on their network area). 27 Importantly, it is the difference between individual retailers offers that can produce significant savings if switching from a standing offer to a market offer. Customers who choose to stay with the same retailer,butchangetoamarketoffer,areunlikelytoexperienceannualsavingsas large as these. Furthermore, we stress that the majority of these discounts are conditional on bills being paid on time and households with cashcflow issues thus may find themselves unable to achieve the annual bills estimated for some of the bestoffersincludedinthechartsbelow. Charts14c16belowshowannualretailbillsfortypicalconsumption(7,200kWhper annum,singlerate)foreachofthethreenetworkareas.thebluecolumnstotheleft represent the standing offer bill, the red columns are the market offers including guaranteeddiscounts(butnotpayontimediscounts)whilethegreencolumnsare market offer bills including pay on time discounts. 28 The dotted lines show the transitionaloffer ineachnetworkarea. Ausgrid InAusgrid sarea,averageconsumptionhouseholdsontheworststandingoffercan saveapproximately660perannumifswitchingtothebestpublishedmarketoffer. Covau is the retailer that currently offers the best market offer rates in this area. Customerscurrentlyonthe transitionaloffer maysave190perannumifswitching tothebestmarketoffer.asmostmarketofferdiscountsareconditionaluponbills being paid on time, however, none of these offers will produce a saving for late payingcustomerscurrentlyonthe transitionaloffer Basedonmarketofferbillsthatincludediscountsandpayontimediscounts. 28 Thesemarketofferswerecollectedbetweenthe15 th andthe21 st ofjuly2015andit shouldbenotedthatretailersmaychangetheirratesatanytime.discounts(excludinggst) havebeenappliedtoconsumptionand/ortotalbillasperofferslistedintable4. 24

26 Chart14Ausgrid snetworkarea:estimatedannualbills(inclgst)forelectricitytransitional, standingandmarketofferspostjuly2015,includingdiscountsandpayontimediscountsc Householdsconsuming7,200kWhperannum(singlerate) Standing% Market%(ex%POT)% Market%(inc%POT)% Transitional% 2,400% 2,200% 2,000% 1,800% 1,600% 1,400% 1,200% 1,000% 2,600% 2,400% 2,200% 2,000% 1,800% 1,600% 1,400% 1,200% 1,000% Retail(offers(in(Ausgrid's(area( The difference between the best and the worst market offer is also significant. Covau s offer is approximately 660 less than Sanctuary s market offer post discounts(and pay on time discounts) for households with this consumption level. Figure 1 below shows estimated annual bills for market offers post discounts in Ausgrid s network area as well their current ranking compared to their offers one yearago(brackets). 25

27 Figure1Ausgrid snetworkarea:lowesttohighestannualbills(inclgst)formarketoffers postjuly2015,includingdiscountsandpayontimediscountschouseholdsconsuming 7,200kWhperannum(singlerate) 30 1.Covau1,648(c) 2.OriginEnergy 1,664(4) 3.Powershop 1,676(c) 4.EnergyAustralia 1,683(6) 5.SimplyEnergy1,706(c) 6.AGL 1,759(8) 7.Dodo 1,777(2) 8.RedEnergy 1,785(1) 9.LumoEnergy 1,785(7)% 10.Powerdirect 1,865(10) 11.Commander1,878(c) 12.Momentum 1,885(9) 13.Diamond2,040(c) 14.ClickEnergy 2,081(5) 15.Sanctuary2,308(c) 30 Thesemarketofferswerecollectedbetweenthe15 th andthe21 st ofjuly2015andit shouldbenotedthatretailersmaychangetheirratesatanytime.additionaldiscountsfor customerschoosingtopaybydirectdebitarenotincludedinthesebillcalculations. 26

28 Endeavour In Endeavour s network area, average consumption households on the worst standing offer can save approximately 590 per annum if switching to the best publishedmarketoffer.powershopistheretailerwiththebestmarketofferrates. Customerscurrentlyonthe transitionaloffer maysave300perannumifswitching tothebestmarketoffer. Chart15Endeavour snetworkarea:estimatedannualbills(inclgst)forelectricity transitional,standingandmarketofferspostjuly2015,includingdiscountsandpayontime discountschouseholdsconsuming7,200kwhperannum(singlerate) Standing% Market%(ex%POT)% Market%(inc%POT)% Transitional% 2,400% 2,200% 2,000% 1,800% 1,600% 1,400% 1,200% 1,000% 2,600% 2,400% 2,200% 2,000% 1,800% 1,600% 1,400% 1,200% 1,000% Retail(offers(in(Endeavour's(area( The difference between the best and the worst market offer is similar to that of Ausgrid s network area. Powershop s offer is approximately 590 less than Sanctuary smarketofferpostdiscounts(andpayontimediscounts)forhouseholds withthisconsumptionlevel.figure2belowshowsestimatedannualbillsformarket offers post discounts in Endeavour s network area as well their current ranking comparedtotheiroffersoneyearago(brackets). 27

29 Figure2Endeavour snetworkarea:lowesttohighestannualbills(inclgst)formarket offerspostjuly2015,includingdiscountsandpayontimediscountschouseholdsconsuming 7,200kWhperannum(singlerate) 31 1.Powershop 1,651(c) 2.EnergyAustralia 1,695(7) 3.OriginEnergy 1,696(6) 4.Covau1,708(c) 5.Dodo 1,720(2) 6.RedEnergy 1,723(1) 7.LumoEnergy 1,723(8)% 8.AGL 1,766(10) 9.Powerdirect 1,767(11) 10.Momentum 1,770(9) 11.Commander1,816(c) 12.Diamond1,928(c) 13.ClickEnergy 2,011(4) 14.Sanctuary2,239(c) 31 Thesemarketofferswerecollectedbetweenthe15 th andthe21 st ofjuly2015andit shouldbenotedthatretailersmaychangetheirratesatanytime.additionaldiscountsfor customerschoosingtopaybydirectdebitarenotincludedinthesebillcalculations. 28

30 Essential InEssential snetworkarea,averageconsumptionhouseholdsontheworststanding offer can save approximately 1,050 per annum if switching to the best published market offer. Powershop is the retailer with the best market offer rates in this network area. Customers currently on the transitional offer may save 300 per annumifswitchingtothebestmarketoffer. Chart16Essential snetworkarea:estimatedannualbills(inclgst)forelectricity transitional,standingandmarketofferspostjuly2015,includingdiscountsandpayontime discountschouseholdsconsuming7,200kwhperannum(singlerate) Standing% Market%(ex%POT)% Market%(inc%POT)% Transitional% 3,100% 2,900% 2,700% 2,500% 2,300% 2,100% 1,900% 1,700% 3,300% 3,100% 2,900% 2,700% 2,500% 2,300% 2,100% 1,900% 1,700% Retail(offers(in(Essential's(area( As in other network areas, the difference between the best and the worst market offerissignificant.powershop sofferisapproximately1,050lessperannumthan Sanctuary smarketofferpostdiscounts(andpayontimediscounts)forhouseholds withthisconsumptionlevel.figure3belowshowsestimatedannualbillsformarket offers post discounts in Essential s network area as well their current ranking comparedtotheiroffersoneyearago(brackets). 29

31 Figure3Essential snetworkarea:lowesttohighestannualbills(inclgst)formarketoffers postjuly2015,includingdiscountsandpayontimediscountschouseholdsconsuming 7,200kWhperannum(singlerate) 32 1.Powershop 1,906(c) 2.Momentum 1,961(8) 3.Covau1,968(c) 4.OriginEnergy 1,996(4) 5.EnergyAustralia 2,072(6) 6.AGL 2,167(9) 7.RedEnergy 2,310(1) 8.LumoEnergy 2,310(7)% 9.Dodo 2,344(2) 10.Powerdirect 2,436(10) 11.Commander2,470(c) 12.Diamond2,643(c) 13.ClickEnergy 2,716(3) 14.Sanctuary2,963(c) 32 Thesemarketofferswerecollectedbetweenthe15 th andthe21 st ofjuly2015andit shouldbenotedthatretailersmaychangetheirratesatanytime.additionaldiscountsfor customerschoosingtopaybydirectdebitarenotincludedinthesebillcalculations. 30

32 2.2GasmarketoffersJuly2015 There are relatively few gas market offers available in NSW and the Sydney area (Jemena/AGL gas zone) is the only area that has more than two offers(most nonc metropolitan areas only have the regulated offer). As such, this analysis only comprisesregulatedvs.marketoffersinthegreatersydneyarea. The difference between the best and the worst gas market offer is approximately 140 per annum. The difference between gas marketoffers,however,isminimal.seechart17below. Typical consumption households (24,000 Mj) can save 120 per annum if switchingfromtheregulatedoffertothebestmarketoffer. 33 Seechart19 below. Chart17PricecspreadforsevengasmarketoffersintheJemenapricingzonepostJuly2015 (inclgst),includingdiscountsandpayontimediscountschouseholdsconsuming24,000mj perannum.thetriangularmarkersarestandcalonegasoffersandthesquaresaredualfuel offers. 950% 900% (per(annum( 850% 800% 750% 700% 1% 2% 3% 4% 5% 6% 7% Retail(offers(in(Jemena(gas(zone( Chart 18 below shows that most retailers have rates that are the same as the regulatedrates(priortoadditionaldiscounts).tworetailers,lumoanddodo,have marketofferratesthatarehigherthantheregulatedrates. 34 Lumo,Red,Covauand Dodoonlyoffergasinconjunctionwithelectricity(dualfuelproducts). 33 Basedontheregulatedofferandthebestofthepublishedmarketoffers(includingpayon timediscounts). 34 Thesemarketofferswerecollectedbetweenthe4 th andthe8 th ofjuly2015anditshould benotedthatretailersmaychangetheirratesatanytime. 31

33 Chart18GasoffersinJemena/AGLzoneasannualbills(excludingdiscounts),July2015 (24,000Mjperannum,incGST) 1,200% 1,100% (per(annum( 1,000% 900% 800% 700% 600% Thecalculationsforthemarketoffersinchart18includeratesonly(costperMJand fixedcharges)anddonotincludeothermarketofferfeaturessuchasdiscountson consumption rates, vouchers, signcup credits, loyalty bonuses and discounts if bills are paid on time. As such, consumers assessing market offers should take these additionalfeaturesintoaccountaswellasbeingawareofcontractconditionssuch as late payment fees, the length of the contract and fees for exiting the contract early. Table 5 below shows additional discounts applicable to the gas retailers published market offer rates. It also shows other contract terms and features, such as early terminationfees,associatedwiththesemarketoffers. 32

34 Table5PublishedgasmarketoffersinJemena/AGLgaszoneasofJuly2015:Keyadditional featuresandcontractconditions Guaranteed discounts Contract term/ benefit period Early Termination Fee Late Payment Fee Payontime discounts Other AGL^ No 1year No 12 14%offusage Yes Origin^ No 1year No 12 16%offusage No Energy No 1year No 12 12%offusage No Australia Lumo* No 2years Upto75 No 10%offbill No Red* No 2years 20 No 10%offbill No Covau* No 1year 25 No^^ 16%offusage Yes Dodo* No No No No 20%offusage No ^AGL sofferincludesafurther2%offconsumptionratesfordualfuelcustomers. ^^Covau spricefactsheetdoesnotmentionlatepaymentfees *Retailersthatonlyoffergasasadualfuelproduct(inconjunctionwithanelectricityoffer). Note:Examplesofotherfeaturesincludeloyaltybonuses,creditstotheaccountuponcommencinga contractandshopvouchers PotentialsavingsADifferencesbetweengasoffers Chart19belowshowsannualretailbillsformarketofferscomparedtotheregulated offerfortypicalconsumptionhouseholds(24,000kmjperannum)inthejemena/agl gaszone.theredcolumnsarethemarketoffersincludingguaranteeddiscounts(but notpayontimediscounts)whilethegreencolumnsaremarketofferbillsincluding pay on time discounts. 35 The dotted line represents the regulated rates that took effectinjuly2015. CustomersswitchingfromtheregulatedoffertoOriginorCovau smarketofferscan potentially save 120 on their annual gas bill (including pay on time discounts). However,asCovau sofferisonlyavailableinconjunctionwithelectricity,potential customers should carefully examine Covau s electricity offer. If customers on the regulated offer switch to Lumo or Dodo, they will pay the same as they do on the regulatedoffer,evenafterthepayontimediscountshavebeenapplied. 35 Thesemarketofferswerecollectedfromtheretailers websitesbetweenthe4 th and8 th of July2015.Discounts(excludingGST)havebeenappliedtoconsumptionand/ortotalbillas perofferslistedintable5. 33

35 Chart19GasoffersinJemena/AGLarea:Estimatedannualbillformarketoffers(guaranteed discountonlyandalldiscounts)comparedtotheregulatedrates(basedon24,000mj,inc GST) (per(annum( 1,200% 1,100% 1,000% 900% 800% 700% 600% 500% 400% AGL% Market%offer%(ex%POT)% Regulated%offer% Origin% Energy% Aus% Market%offer%(inc%POT)% Lumo% Red% Covau% Dodo% 1,200% 1,100% 1,000% Comparedtoelectricityoffers,thedifferencebetweenthebestandtheworststandc alonegasmarketoffersisverysmall.figure4belowshowsestimatedannualbillsfor standalonegasmarketofferspostdiscountsinthejemena/aglgaszoneaswellas how they ranked compared to other retailers one year ago (in brackets). The differencebetweenthebest(origin)andtheworst(energyaustralia)marketoffers isonly30perannum. Figure4Jemena/AGLgaszone:Lowesttohighestannualbills(inclGST)forstandcalonegas marketofferspostjuly2015,includingdiscountsandpayontimediscountschouseholds consuming24,000mjperannum % 800% 700% 600% 500% 400% OriginEnergy 784(2) AGL 799(1) EnergyAustralia 814(3) 36 Thesebillestimatesarebasedonratespublishedontheretailers websitesbetweenthe 4 th and8 th ofjuly2015anditmustbenotedthatretailersmaychangetheirratesatany time.additionaldiscountsforcustomerschoosingtopaybydirectdebitarenotincludedin thesebillcalculations. 34

36 2.3DualfueloffersJuly As four out of seven gas retailers only offer gas as a dual fuel product we have included a comparison of dual fuel offers for households in Ausgrid s electricity networkandthejemena/aglgaszone.chart20belowshowsthatcovaucurrently offers the best value dual fuel product for typical consumption households in this area.lumoenergy sofferisthemostexpensive(280morethancovau s).covau s dual fuel offer is approximately 15 less per annum than the best single fuel electricityandgasofferscombined(2,431). 38 Chart20AusgridnetworkandJemena/AGLgaszone:Estimatedannualbills(inclGST)for dualfuelofferspostjuly2015,includingdiscountsandpayontimediscountschouseholds consuming7,200kwhand24,000mjperannum 39 3,000% 2,500% 2,000% 1,500% 1,000% Electricity% Gas% 500% 0% AGL% Origin% Energy% Aus% Lumo% Red% Covau% Dodo% 37 Theannualbillsfordualfueloffersarebasedonasingleretailersupplyingahousehold withbothfuelsourcesandanannualconsumptionof7,200kwh(singlerate)and24,000mj. Themarketofferswerecollectedbetweenthe4 th and21 st ofjuly2015anditshouldbe notedthatretailersmaychangetheirratesatanytime. 38 Figure1(section2.1)showsthatthebestvaluestandcaloneelectricityofferis1,664per annum(origin)andthebestvaluegasofferis784perannum(origininfigure4insection 2.2). 39 Discounts(excludingGST)havebeenappliedtoconsumptionand/ortotalbillasperoffers listedinthetable4and5withtheexceptionofaglwhichoffersanadditional2%off consumption(electricityandgas)fordualfuelcustomers. 35

37 Figure5AusgridnetworkandJemena/AGLgaszone:Lowesttohighestannualbills(inclGST) fordualfuelmarketofferspostjuly2015,includingdiscountsandpayontimediscountsc Householdsconsuming7,200kWhand24,000Mjperannum 40 Covau2,431 OriginEnergy 2,447 EnergyAustralia2,497 AGL 2,508 RedEnergy 2,600 Dodo 2,688 LumoEnergy 2,712%% 40 Thesebillestimatesarebasedonratespublishedontheretailers websitesbetweenthe 4 th and21 st ofjuly2015anditmustbenotedthatretailersmaychangetheirratesatany time. 36

38 3.Retailmarketdevelopments Thissectiondiscussesemergingissuesandtrendsintheenergyretailmarketandfor thisupdatereportwehavedecidedtohighlighttwoemergingissues: 1)Increasingpricedifference(thepricecspread)betweenelectricitystanding offersandmarketoffers 2)Moreretailersapplyinglatepaymentfeesaswellashigherfees 3.1ThepriceAspread NSW deregulated electricity retail prices on 1 July 2014 and a difference between standingofferbillsandmarketofferbills(includingdiscounts)wastobeexpected. Chart21belowshowstheaveragepercentagedifferencetoannualbillsfortypical consumptionhouseholdsonstandingoffersandmarketoffers(includingpayontime discounts)ineachofthenetworkareasfromjuly2013tojuly Itshowsthat the market offers (including discounts) were typically 9% less than the regulated offerinallnetworkareasinjuly2013.sincethen,thedifference(thepricecspread) has increased and it varies between network areas. The average standing offer is nowover13%morethantheaveragemarketofferintheendeavournetworkwhile theaveragesavingformarketoffercustomersinessential snetworkis10.5%. Chart21Estimateddifference(%)toaverageannualbillsforstandingofferandmarketoffer customersusing7,200kwhperannum(singlerate) 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% Ausgrid% Endeavour% Essential% 8.0% 7.0% Jul'13% Jul'14% Jul'15% Asthemajorretailers(Origin,EnergyAustraliaandAGL)typicallyoffergreater(pay ontime)discountsthantheaveragesmallerretailer,thebilldifferencebetween 41 Basedonhouseholdsconsuming7,200kWhperannum.TheJuly2013standingofferis theregulatedrate. 37

39 standing offer customers and market offer customers is greater for these three retailers.chart22belowshowsthatastandingoffercustomerwithenergyaustralia inausgrid snetworkwillhaveanannualbillthatis17%higherthanamarketoffer customer with the same retailer. In July 2013, by comparison, the difference was only8%. Chart22Estimateddifference(%)toaverageannualbillsforstandingofferandmarketoffer customersinausgrid snetworkarea,using7,200kwhperannum(singlerate) 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Jul'13% Jul'14% Jul'15% 3.2Latepaymentfees We have previously raised our concern regarding the use of late payment fees as well as the significant impact they can have on late paying households bills when appliedinconjunctionwithapayontimediscount. 42 Discountingisclearlyaneffectivemarketingtoolandwenotethatonlyoneretailer currently offers discounts that are not conditional upon bills being paid on time. Sanctuary Energy, on the other hand, does not offer any discounts but their late paymentfeeisasignificant25. InJuly2013,annualmarketofferbillswereonaverage6%(or130)moreforlate paying customers compared to customers that paid on time in Ausgrid s network area. As of July 2015, the difference is almost 13% or 230 per annum. Chart 23 EA% Origin% AGL% 42 SeeStVincentdePaulSociety,NSWEnergyPricesJuly2012 July2013,Anupdatereport onthenswtariff@trackingprojectbymaymausethjohnston(august2013) 38

40 shows the average annual bill for customers that pay on time and customers that paylatefromjuly2013tojuly Chart23Averageannualelectricitybillsformarketoffercustomersthatpaylateandpayon timeinausgrid snetworkarea,7,200kwhperannum(singlerate) 2400% 2300% Annual(bill(()( 2200% 2100% 2000% 1900% 1800% Late% On%time% 1700% Jul'13% Jul'14% Jul'15% 43 Basedonhouseholdsconsuming7,200kWhperannum(singlerate)inAusgrid snetwork area.latepayingbillsdonotincludepayontimediscounts(asperretailoffer)andinclude fourlatefees(ifappliedbytheretailers). 39

41 4.Networkcharges The NSW electricity networks (Ausgrid, Essential and Endeavour) introduce new NetworkUseofSystem(NUOS)chargesinJulyeveryyear.TheseNUOSchargesare approvedbytheaustralianenergyregulator(aer)andcomprisetransmissionuse ofsystem(tuos)anddistributionuseofsystem(duos)aswellasothercostssuch asjurisdictionalchargesandmeteringcharges.theretailerscan,andgenerallywill, build changes to the NUOS (in relation to both shape and price) into their retail tariffs. ThechartspresentedinthissectionshowthatwhiletheNUOSchargesforaverage consumption households increased significantly from 2009 to 2012 they have flattenedoutaswellasdecreasedsincethen.injuly2015thenuosdecreasedinall network areas and the annual NUOS bill for average consumption households in Essential snetworkisnowlessthanitwasin2010.seechart24below. Networkchargesasproportionoftotalbillhavethusalsoflattenedoutordecreased in recent years. The NUOS proportion is currently 42% in Ausgrid, 37% in Essential and38%inendeavour.seechart25below. Chart 24 NUOS charges as annual cost to residential consumers from 2009*to2015, all networks(basedonsinglerate,7,200kwhperannum,gstexclusive) % 1600% NUOS(()(per(annum( 1400% 1200% 1000% 800% 600% 400% 200% 0% Ausgrid% Essential% Endeavour% *Essential sareaincludesnuoschargesfrom2010to2015only. 2009% 2010% 2011% 2012% 2013% 2014% 2015% 44 TheannualNUOSchargeshavebeencalculatedbyallocating1,800kWhperquarter(again basedonannualconsumptionof7,200kwh)tothestepchargesstipulatedinthenuos (excludinggst).theannualnuoscostalsoincludesfixedcharges. 40

42 Chart25NUOSchargesasproportionofannualbillfrom2009*to2015,allnetworks.Based onregulatedoffer(2009c2013)andaveragesingleratestandingoffer(2014c2015), 7,200kWhperannum,incl.GST 45 60% %(of(annual(bill( 50% 40% 30% 20% 10% 2009% 2010% 2011% 2012% 2013% 2014% 2015% 0% Ausgrid% Essential% Endeavour% *Essential sareaincludesnuoschargesfrom2010to2015only. Charts26c28belowshowannualretailbills(solidline),NUOSchargesasannualcost (dotted line) and as proportion of annual bill (columns) for each of the network areas.themethodologyusedforthesecalculationsisthesameasforcharts24c25 above. 45 TheNUOSproportionoftotalbillhasbeencalculatedusingannualNUOScostcalculations (seefootnoteabove)andtheretailers regulated/standingoffersasofjulyeveryyear(from 2009to2015),presentedasannualbillsforhouseholdsusing7,200kWhperannum(single rate,incl.gst)acrossthethreedistributionareas. 41

43 Chart26Ausgrid:Retailbillperannum,NUOSchargesandNUOSasproportionoftotalbill Basedonregulatedoffer(2009c2013)andaveragesingleratestandingoffer(2014and 2015),7,200kWhperannum,inclGST. (per(annum( 2500% 2000% 1500% 1000% 500% 0% 2009% 2010% 2011% 2012% 2013% 2014% 2015% NUOS%proportion%(%)% NUOS%()% Retail%()% Chart27EndeavourEnergy:Retailbillperannum,NUOSchargesandNUOSasproportionof totalbillbasedonregulatedoffer(2009c2013)andaveragesingleratestandingoffer(2014 and2015),7,200kwhperannum,incl.gst 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% %(of(annual(cost( (per(annum( 2500% 2000% 1500% 1000% 500% 0% 2009% 2010% 2011% 2012% 2013% 2014% 2015% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% %(of(annual(cost( NUOS%proportion%(%)% NUOS%()% Retail%()% 42

44 Chart28EssentialEnergy:Retailbillperannum,NUOSchargesandNUOSasproportionof totalbillbasedonregulatedoffer(2010c2013)andaveragesingleratestandingoffer(2014 and2015),7,200kwhperannum,incl.gst 3500% 100% (per(annum( 3000% 2500% 2000% 1500% 1000% 500% 90% 80% 70% 60% 50% 40% 30% 20% 10% %(of(annual(cost( 0% 0% 2010% 2011% 2012% 2013% 2014% 2015% NUOS%proportion%(%)% NUOS%()% Retail%()% 43

45 5.Totalcostofenergybyarea The analysis presented in this report shows that while electricity prices have decreasedthisyear,thedecreasesarelargerinsomeareasthanothers.inrelation to electricity, households in Essential s network area have seen the greatest electricity price decreases. 46 Gas prices, on the other hand, have decreased significantlyinsomeareasandincreasedinothers. 47 Asapproximately40%ofNSW households are connected to both electricity and gas, it is important to analyse whether there are areas that have experienced high increases/decreases in both electricity and gas prices, and conversely, whether there are areas where the increases/decreasesinelectricityandgaspricesareatthelowerend. 48 Suchanalysis allows for a more detailed understanding of the total energy costs faced by householdsacrossnsw. 5.1InnerSydney,NorthernSydney,Swansea,Newcastle,Maitland,CessnockSingleton andupperhunter Source: 46 Tocalculateelectricitypricechangeswehavecomparedtheaveragestandingoffer (acrossallretailers)asofjuly2014(carboninclusive)tojuly2015(carbonexclusive). 47 TocalculategaspricechangeswehavecomparedtheregulatedofferasofJuly2014 (carboninclusive)tojuly2015(carbonexclusive)andassumedanannualconsumptionof 24,000Mj. 48 AccordingtoIPART,approximately40%ofallNSWhouseholdsusegasandintheSydney metropolitanareaapproximately50%ofhouseholdsusegas.ipart,reviewofregulated retailpricesandchargesforgas,finalreport,june2014,p52 44

46 Inthisarea,theaverageannualelectricitystandingofferbillis220lessinJuly2015 compared to July 2014 (based on households consuming 7,200kWh/annum). Households in the Jemena/AGL gas zone have received a decrease in gas prices of approximately175overthesameperiod. Dual fuel households with an average consumption of electricity and gas in inner and Eastern Sydney, Sydney s North, Swansea and Newcastle will typically experience a decrease in annual energy costs of 395 from July Allcelectric households in Sydney, Newcastle, Maitland, Singleton, Muswellbrook and the Upper Hunter will typically experience a decrease in annualelectricitycostsof190fromjuly ThesearehouseholdsinAusgrid selectricitydistributionnetworkandjemena/agl sgas zone. 50 Thesearehouseholdsonatwocrate(controlledload)tariffinAusgrid selectricity distributionnetwork. 45

47 5.2WesternSydney,Wollongong,BlueMountains,Lithgow,Kandos,MossVale,Nowra, Ulladulla Source: Inthisarea,theaverageannualelectricitystandingofferbillis190lessinJuly2015 compared to July 2014 (based on households consuming 7,200kWh/annum). Households in the Jemena/AGL gas zone have received a decrease in gas prices of approximately175overthesameperiod. Dual fuel households with an average consumption of electricity and gas in Western Sydney, Wollongong, Blue Mountains and Lithgow will typically experienceadecreaseinannualenergycostsof365fromjuly ThesearehouseholdsinEndeavourEnergy selectricitydistributionnetworkand Jemena/AGL sgaszone. 46

48 As gas prices have remained stable in Nowra/Shoalhaven, dual fuel householdsinthisareawilltypicallyexperienceadecreaseinannualenergy costsof190fromjuly Allcelectric households in Western Sydney, Wollongong, Blue Mountains, Lithgow,Kandos,MossVale,NowraandUlladullawilltypicallyexperiencea decreaseinannualelectricitycostsof190fromjuly RuralandRegionalNSW Far North Coast Region Far West Region North Western Region Northern Region Mid North Coast Region Central Western Region Southern Region South Eastern Region Source:CountryEnergy,AnnualReport2009c10 InruralandregionalNSW,theaverageannualelectricitystandingofferbillis400 less in July 2015 compared to July 2014 (based on households consuming 7,200kWh/annum).Forallcelectrichouseholds(8,000kWh,30%controlledoffpeak) theaverageelectricitystandingofferhasdecreasedby370. Dual fuel households with an average consumption of electricity and gas in Bathurst, Orange, Dubbo and Parkes will typically experience a decrease in annualenergycostsof575fromjuly ThesearehouseholdsinEndeavourEnergy selectricitydistributionnetworkand ActewAGL sshoalhavengaszone. 53 Thesearehouseholdsonatwocrate(controlledload)tariffinEndeavourEnergy s electricitydistributionnetwork. 54 ThesearehouseholdsinEssentialEnergy selectricitydistributionnetworkand Jemena/AGL sgaszone. 47