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VIC: Why has the price you pay for power changed?

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VIC: Why has the price you pay for power changed?
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If you’re reading this, chances are you’ve received an email from us telling you the price you pay for electricity in Victoria is increasing. We know that isn’t great news, so we’ve put together a bit of information to help you understand why it’s happening.

 Why have electricity prices increased?

The significant increase in the wholesale cost of electricity is due mostly to the closure of ageing, coal fired power stations. While it’s positive for the environment that these dirty power stations are being withdrawn from the market, the reality is that more flexible – and more expensive – gas generators are now being used to fill the gap when demand is high, pushing up wholesale prices which then have an impact on your bill.

We delayed changing our rates during 2017 despite the increase in wholesale prices which have almost doubled in the last year or so and we are not passing on this full increase to our customers from 1 January 2018.

The graph below shows how market prices have increased over the last few years. In the last 12 months in particular, prices have increased significantly across the National Electricity Market.

Some analysts predict that the wholesale cost of electricity will fall in the next 2-3 years, meaning some welcome price relief may be on its way. Prices are anticipated to come down because Powershop and other companies are planning to invest in new renewable generation, meaning more supply to fill the gaps left by the retired dirty generators.

How much are prices increasing?

Electricity prices will be changing for Powershop customers in Victoria from 1 January 2018. From 1 January 2018 you can view your new prices here:

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You might’ve seen recent news about households being stung with expired offers with some retailers. Remember at Powershop, you can rest easy because that’s not how we work. There are no dodgy expiring discounts, lock-in contracts or unfair deals at Powershop.

If you are having trouble paying your bills – for any reason – please get in touch by calling us on 1800 462 668. We’re able to provide assistance if you’re experiencing financial difficulty and can direct you to further help if you need it. Contact us here for more information.

Is Powershop the only retailer that’s changing their prices?

Most (if not all) electricity retailers in Victoria are responding to the higher wholesale prices by increasing their retail electricity prices. We don’t make the decision to increase prices lightly and we’re always doing what we can to do right by our customers.

All electricity retailers have to buy energy from the grid for their customers, so ultimately all retailers have to adjust to changes in the market. The market price is affected by various forms of generation, but rest assured that Powershop are 100% carbon neutral at no extra cost to you, and our parent company – Meridian Energy – puts only 100% renewable wind and hydro energy into the grid. Read more.

We always look to limit the impact of price rises for our customers and continue to offer you the most competitive prices we can. You can rest assured that as a Powershop customer, you’re always on the best deal available for you.

What’s Powershop been doing recently to help keep electricity prices affordable for customers?

We’re always working on ways to keep prices lower for our customers. Here are a couple of recent projects we’ve been working on.

Curb Your Power
Powershop’s demand response program
From December 2017, Powershop customers can participate in our demand response program – helping to reduce pressure on the grid during peak demand times while earning rewards. Read more and register here.

Better Solar
Powershop’s new solar advisory service
Installing solar at your home or business can help reduce your usage and save you money on your bill. We can help take the stress out of looking for a quality solar installer with our Better Solar service. We’ve handpicked a panel of solar installers so you can be sure you’re getting the best solar deal for you. Learn more.

Supporting the National Energy Guarantee (NEG)
Powershop is committed to working with the Government, market regulators and other industry participants to ensure the design of the NEG delivers the best outcome for the market, customers and the environment. Learn more.

Are Powershop providing Standing Offer rebate’s, as announced by the Victorian Government?

Happily, no. There will be no Powershop customer receiving a standing offer rebate, because all our customers are already on our best offer available to them. Always.

We don’t have sneaky expiry dates on the discounts we offer when you join. We don’t have so called “standing offers”. No matter when you joined us, you have access to our best offer, today.

What makes up the cost of electricity?

Below are some factors which make up the cost of your electricity bill:

  • Wholesale costs: the cost of electricity being generated.
  • Network and metering charges: the cost for the distribution and transmission of electricity via poles and wires.
  • Government-based environmental schemes: GreenPower, state-based solar bonus and efficiency schemes.
  • Retail component: covering the risk associated with managing high and volatile wholesale prices, billing and other customer services.

What if you’re having trouble paying your bill?

There are many reasons that might prevent someone from paying their bills.

If we notice signs or if you or someone on your behalf tells us that you’re having difficulty making payments, we’ll communicate with you to ensure you’re aware of your various options, including our Hardship program.

You can read about our Hardship Policy here and if you are experiencing financial difficulty – for any reason – or if you have any questions please get in contact with us on 1800 462 668. 

What is Powershop doing to make things better for customers?

Electricity pricing can be really complex to understand. At Powershop we’ve always tried to make pricing as simple and as transparent as possible for our customers.

  • Powershop offers you control through the Powershop App and online account.You can track your usage and see your account history whenever it suits you. By making this information easy and accessible we’re hoping you’re able to make changes to use less and save even more.
  • Renewable energy is now the cheapest form of new energy generation to build in Australia. We know because we are currently in the works to buy energy from new renewable energy generators. We believe that by investing in more renewable energy we can help drive down power prices. We’ll have much more to say on this in the coming months.
  • All the energy we supply to our customers is 100% carbon neutral at no extra cost. There’s no need to opt in or request this – it’s something we do for all our customers because we believe it’s the right thing to do.
  • We have plenty of extra information available on our website to provide energy saving tips. And in 2018, keep an eye out for some great new tools and information too.

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