Victorian Tariff Innovation: Let’s compare the price of progress

The introduction of smart meters in Victoria has created opportunity for retailers and distributors to create efficiencies and provide value-add services for customers. In particular, having smart meters installed in every household and small business opens the door for tariff progress through the creation of innovative pricing structures that can be applied at 30 minute intervals – This has led to some cutting edge electricity offers in recent time, such as Dodo’s ‘Hour of power’ (free electricity from 6-7am every day) and AGL’s ‘Free Saturdays’.

Whilst innovative tariffs are a great example of progress in the Victorian electricity market, they also highlight an inherent obstacle in the lack of consumer awareness and industry knowledge – Whilst the savvy, well- educated consumers can find great deals, the rest of the consumers don’t have enough general knowledge of the industry to understand the difference between one offer and the next. Because most Victorian consumers are unable to identify or understand simple elements of their bill, such as supply charge and usage rates, they are in no position to understand the impact of ‘flexible pricing’ tariffs on their overall costs. To that end, the more innovative a tariff is, the more difficult the task of assessing and comparing offers is.

So whilst tariff progress is greatly improved through the use of smart meters, broad consumer benefit of that progress can be hampered.

To combat these issues, the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) has created an online price comparison website (‘Victorian Energy Compare’) which simplifies the comparison process for all Victorian consumers. With a recent bill and answers to a few simple questions, users of the Victorian Energy Compare website can easily navigate the electricity market to receive a recommendation of the best offers for their individual needs – often demonstrating a significant benefit in switching, to the tune of around twenty five percent or hundreds of dollars!