Aurora new time-of-use tariff

Update 10 Jan 2017. Note that these tariffs are in AEST (ie do not follow daylight saving changes). See official Aurora page for details of these tariffs.

Aurora Energy will introduce two new time-of-use tariffs, from 1 July 2016 on an opt-in basis. One for residential customers and one for small business customers.

The new residential Tariff 93 will have two price periods: peak (31.31c/kWh) 7-10am and 4-9pm Monday to Friday, all other times, including all weekend are off-peak (14.58c/kWh).

The new small business Tariff 94 will have three price periods: peak (28.43/kWh) 7am – 10pm Monday to Friday, shoulder (20.15c/kWh), 7am – 10pm weekend day, and off-peak (11.54c/kWh) any day 10pm – 7am.

Customers who opt-in to these tariffs would pay the above rates for all their electricity (ie there would be no distinction between light and power (tariff 31) and heating and hot water (tariff 41/42).

TREA made a submission to the Economic Regulator supporting the introduction of this tariff on an opt-in basis. We believe that it will provide an incentive for the industry to offer new production and services and it will provide participating customers with an incentive to modify their consumption behaviour in ways in which both saves them money and reduces long term network costs.

Scenarios under which this tariff could be beneficial include:

  • Customers who add a timer to their storage hot water service to avoid peak times.
  • Customers who have the capacity to modify their behaviour to move consumption from peak to off-peak times.
  • Customers who install battery storage with solar to store some of their surplus daytime generation for use in peak periods.
  • Off peak charging of electric vehicles.
  • Use of grid connected battery storage (including batteries in electric vehicles) to buy off-peak energy and store it for use in peak times.
  • Customers who are able to pre-heat well-insulated houses in order to avoid or reduce the need for heating at peak times.
  • There may be a case for new solar installations using this tariff to consist of east and west facing panels rather than north facing panels to increase solar generation at peak tariff times.

In all these scenarios, the decision by TasNetworks and Aurora to offer two relatively short peak periods in a day for residential customers, with an off-peak period between, makes time shifting of consumption much more viable than in other states which have a long day-time peak period.

Under all these scenarios, there is a benefit to the network and hence to all customers from a reduction in the network infrastructure necessary to meet peak demand.

All of these benefits are maximised if the difference between peak and off-peak rates provides sufficient incentive for customers to change their behaviour. For this reason we are pleased to see that the residential tariff involves a significant price difference between peak and off-peak.

Should you be promoting this to your customers?

This new tariff may be a benefit to your customers and provides an incentive for you to offer new services around solar, batteries, monitoring and home automation. However you will need to be reasonably confident that there is an overall benefit to customers before recommending this tariff. This is difficult to calculate without detailed data on a customer’s pattern of daily use. Aurora’s initial advice is that the time of use tariff is most likely to be beneficial to customers whose tariff 31 consumption (in kWh) is greater than their tariff 41/42 consumption.

Watch out for the potential downsides:

  • Existing customers who wish to change to the new tariff will have to pay a TasNetworks meter change charge of $174 ($243 for three-phase). The same charge will apply customers converting back from the time of use tariff to the existing tariffs 31 and 41.
  • The financial benefit of Solar PV without batteries will be reduced to the off peak rate between 10am and 4pm
  • In calculating the benefits, be aware that over time it is TasNetworks intention to increase fixed charges and reduce consumption based charges, this will reduce the financial benefit of offsetting consumption with solar PV.

Does it solve the solar metering problem?

This new tariff is being promoted as a solution for the problem that solar owners are not able to offset their solar output against their simultaneous consumption on hot water and heating.  We do not accept that this is a full solution to this problem because:

  • It will not be available until July 2016, almost three years after the problem was identified and the state government instructed Aurora Networks to address it as a matter of priority.
  • Solar owners who have already paid for an interval meter will be required to pay again for a meter change to access the new tariff.
  • It may not be advantageous for solar owner who have significant peak period consumption on tariff 41/42.

Aurora trial offer

Aurora Energy have offered to work with TREA to understand the impact this new tariff would have on solar owners. As part of this they are offering to provide a small number of existing solar customers with an option to change to the new tariff without paying a meter change charge (and a free swap back after a billing period if the customer does not want to continue on the time of use tariff). In exchange Aurora would monitor the impact of the new tariff on the quarterly bill and ask the customer some questions about the impact of the tariff. If you would like to participate in this offer please contact Jack Gilding eo@tasrenew.org.au and we will pass on to Aurora.

Comparison of 2016-2017 residential tariffs

Tariff Fixed charge / day Peak /kWh Off-peak /kWh
Tariff 93 time of use

103.021c

31.307c

14.577c

Tariff 31

92.457c

26.065c

Tariff 41/42

17.907c

15.719c

31+41

110.364

For full details on the new tariffs, and the new rates for existing tariff 31 and 41 see the Economic Regulator Aurora Energy’s approved Standing Offer prices from 1 July 2016 page.

peak-offpeak

Author: TREA

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