AFP
A new report by Energy Consumers Australia (ECA) has found that complex fair pricing is disproportionately affecting low-income households, sparking concerns.
The practice of dynamic power pricing, including time-of-use and demand tariffs, was found to be ineffective, providing no benefits or value to either consumers or the energy grid, ABC.co.au reported.
The report found that the time-of-use policy was costing households more money, as people were paying up to AU$300 extra per year, when compared to the simple flat-rate plan.
The Australian energy market is set to undergo a significant shift, which brings consumers under complex power pricing plans. These plans, including dynamic tariffs, aim to reduce energy consumption during peak hours when production costs are higher.
The time-of-use tariffs are the key part of the higher rates for power during peak hours, and demand charges, which impose fees based on the intensity of a household power demand. However, most consumers have zero idea about their transition into these plans, which means they are unaware of the changes to their power bills, ABC reported.
The report noted that low-income households, failing to pay the heightened price, will be forced to turn off their heating and cooling. The report also stated that these households will no longer be able to afford clean energy technologies that could help them save money.
The ECA, therefore, is calling for requesting that electricity price plans be made simpler, noting worries about how it may affect households who are already at risk.
“By providing products for motivated households that fairly reward them for the services they can provide to the system, we can provide benefits to all consumers,” the ECA argued. “At the same time, we must ensure that those who want or need a basic electricity plan at a simple price can still have access to this service.”
