Tip Sheet 1: So what if you can choose your electricity supplier?

Now you can choose which company will supply your electricity. But what does it all mean? Paul Hassing sheds some light on the subject.

The Australian electricity industry is being disaggregated (read: ‘shaken up’). Victorians can now choose who provides their power. This development, called ‘full retail contestability’, may not seem a very interesting one. And depending who you talk to, it may or may not be positive.

So what’s in it for average consumers?
According to the body controlling disaggregation and ensuring minimum service and conduct standards (the Office of the Regulator-General, Victoria), increased competition will give us a choice of prices, terms and services. The catch is that these might not always be better.

Deregulation
Deregulation opens the market to, uh, market forces. And if you consider heat waves, industrial action and exploding gas facilities, the Australian electricity market is quite volatile (ten times more so than world oil prices, according to experts). In times of shortage, rates can skyrocket, so be sure to read the fine print if you decide to switch to a new electricity supplier.

Not that you have to change. Do nothing and you’ll stay on a ‘deemed’ contract with your current supplier, with standard published prices and terms. Any Department of Human Services concessions and benefits you now enjoy will continue whether or not you change. There’s no obligation to switch and you can take your time to compare offers. Renters have the same right to switch as homeowners.

If you do change, it won’t affect the quality or reliability of your electricity supply. Nor will you have to change your meter (though units of the future may save money via intelligent energy management). The key difference will be your contract. Like mobile phone agreements, they’re complicated. Like home loans, you can use a broker to find the best one.

Shopping for electricity
It’s weird to think of shopping for the best electricity price or ‘tariff’—until you think of petrol. In both cases, a few cents per unit make all the difference when added up. Most electricity supplier websites provide a table and checklist for you to compare your various offers or ‘quotes’. The key to making the right choice is to become as informed as possible.

Visit www.reggen.vic.gov.au for a full list of electricity suppliers plus more explanations and information than you can shake a power board at.

You may have seen the billboard featuring a green extension cord. As with cable TV, you can expect calls and visits from electricity salespeople as competition hots up. All retailers must meet strict privacy guidelines and follow a code of conduct for marketing. If they do convince you to sign, you have a ten-day cooling off period to change your mind. This is handy, because some contracts go for five years and have nasty exit fees.

Green methods of producing electricity
For enlightened punters, the main advantage of switching suppliers is that you can opt to have your electricity generated by ‘green’ methods instead of by burning coal. This is a big deal because we’ve just overtaken the USA as the developed world’s highest per capita emitter of greenhouse gases. Since we rely heavily on coal to produce our electricity, the average Australian family churns out 15-20 tonnes of greenhouse gases per year. Anything that reduces that has to be a good thing. And there’s always that Kyoto Protocol thingy.

The problem is, it’s hard to tell which of Victoria’s nine electricity suppliers has the best green credentials. Some are publicly owned by governments; others are privately owned by Australian or overseas investors. I checked all their websites. While a few said more than the rest, they all seemed to be saying pretty much the same thing.

I also learned that there’s green and there’s ‘green’. Apart from straightforward dams, windmills and solar panels, renewable energy can come from burning the methane gas produced by sewage treatment plants and landfill sites (i.e. rubbish tips). There’s also ‘biomass’, which means burning solid fuels that aren’t as bad as coal. This concept is tricky, because some electricity suppliers include native forest woodchips in their definitions of biomass.

Green Electricity Watch
Fortunately, nine of Australia’s leading environmental organisations (including Greenpeace, Friends of the Earth, the Wilderness Society and the Australian Conservation Foundation) have produced a definitive analysis of who’s who in green power. It’s called the ‘Green Electricity Watch’ and you’ll find it at: www.acfonline.org.au

The report nominates a winner, which I telephoned. Seconds later, I was talking to a real live human being who answered my questions so politely and comprehensively that I signed up on the spot. From now on, 100% of my electricity will be generated by the wind. It’s going to cost around four dollars extra per week, though you can get a wind/hydro mix for a quarter of that. That’s not bad value for saving the planet.

At Melbourne Electrical Specialists, we consider ourselves pretty green. We help you minimise the impact of your energy use through advice and environmentally aware systems design.

We also employ Sustainable Energy Industry Association-accredited tradespeople who can install solar electricity and hot water systems for you. Hot water accounts for 25% of an average Victorian home’s energy use. A solar water heater can reduce this by around 75%. Consequently, getting one is one of the best things you can do for the environment.