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Publisher's Letter

Smart power meters will jack up your electricity bill!

How many people have heard about the new "smart" power meters which are due to start being rolled out in Sydney and no doubt, other state capitals, very soon? Smart power meters sound like a good idea but what do they do? In fact, they have an inbuilt timer and the ability to charge different electricity tariffs, depending on the time of day. The idea is that they will charge more for electricity in peak periods and less in off-peak times.

That sounds good, doesn’t it? After all, the electricity grid presently comes close to being overloaded in the summer months and any measures to reduce demand must be regarded as worthwhile, mustn’t they? You might be silently nodding but wait until you read how much it will cost you.

In Sydney, there will be three residential tariffs, called PowerSmart Home: (1) Peak, from 2PM to 8PM on working weekdays; (2) Shoulder, from 7AM to 2PM and 8PM to 10PM on working weekdays and 7AM to 10PM on weekends and public holidays and (3) Off-peak, all other times. So far that seems reasonable, but here is the shocker: the Peak rate will be 30.25 cents per kilowatt-hour. That is more than double the present Sydney residential rate (from Energy Australia) of 13.97 cents per kilowatt-hour (for the first 1750kWh) which has only just increased by 8.5%!

The Shoulder tariff will be 10.89 cents per kilowatt-hour and the off-peak rate will be 6.05 cents per kilowatt-hour, a little more than the present off-peak hot water rate (Off Peak 1). All these prices include GST.

It is not clear whether separately metered off-peak hot-water systems will be all lumped into the one PowerSmart Home tariff or not. I suspect they will be, so charges for hot water will go up correspondingly, depending on when the hot water systems are turned on by the Zellweiger control tones (by remote control, of course).

So what are the PowerSmart Home tariffs likely to mean for the typical household? Remember that the Peak tariff period of 2PM to 8PM, in most households, is when most people cook and eat the evening meal, watch TV (in an air-conditioned living room), use the computer and so on. You don’t have much choice about this, do you?

Just as an exercise, I decided to calculate the effect of the new tariffs on my own most recent electricity bill, for the period from 24/05/08 to 26/08/08. The total bill was $308.78 which is probably on the low side for a household of three adults during winter. I estimated that 60% of our power consumption would be in the peak period, 30% in the shoulder period and 10% in the off-peak period. I also assumed that my present charges for off-peak hot water would be same although they are actually likely to increase. Apart from off-peak hot-water consumption, the power component of the bill was for 1674kWh.

After crunching the numbers, my electricity bill would increase from $308.78 to $443.58, an increase of 43%! And that’s for a pretty modest electricity consumption.

Living as we do in one of the mildest parts of Sydney, we do not have an air-conditioner. Nor do we have a power-hungry large-screen plasma TV or a swimming pool with its power-hungry pump. Or a large two-door fridge with an ice-maker. Or a spa. Or a lot of wasteful 12V halogen downlights. Thank goodness for that!

Make no mistake: when people realise just how punishing these new tariffs are, they will be outraged. And they will be forced to change their power consumption habits. But people on low incomes who are already very careful in everything they do will find it tough.

The power authorities and the politicians have kept pretty quiet about this, haven’t they? I wonder why? I wonder if it has anything to do with the attempt to sell off the electricity distributors in New South Wales?

Leo Simpson

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