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Our pricing strategy

Technological and customer driven changes in the supply and generation of electricity have resulted in customers using the distribution network differently to the recent past, including customers generating and storing their electricity from their solar PVs. To support customer innovation and choice, we have been developing new types of network tariffs to more accurately reflect our customers’ use of the network.  Network tariffs are developed in collaboration with our external stakeholders which, along with the principles below, guide our pricing strategy development.

Pricing reform

Currently, most customers pay a flat rate for their electricity and their use of our network, and their bills reflect the amount of electricity they have used over a certain period of time. The problem with this arrangement is that it does not take into account when customers use electricity. The cost of providing the network isn’t so much driven by the amount of electricity customers use over time, but by the capacity needed to meet generally short peaks in usage - which typically occur on cold weekday mornings and evenings.

Lightbulb showing pricing principles

TasNetworks is supporting customers to manage their own energy supply by providing more suitable pricing structures, such as time of use pricing, which provides incentives to customers to use the network more efficiently, by providing a better signal for the cost of operating the network. The illustration below shows how our everyday usage contributes to short peaks on the network. 

The illustration below shows how our everyday usage contributes to short peaks on the network.
 

Cost reflective network tariffs

Cost reflective network tariffs reflect the true cost of supplying electricity to customers. Cost reflective network tariffs can be structured in many different forms. For TasNetworks, our cost reflective network tariffs include time of use pricing, which takes into account when customers use electricity. 

Time-of-use network charges are a fairer way of sharing the cost of the electricity distribution network between customers. The benefits of time of use pricing: 

  • Minimise electricity costs by shifting consumption into cheaper off-peak times.
  • Provide customers with the solar PV the ability to apply the power they generation to their electricity consumption without any additional behind the meter investment. 
  • Over the longer term, time-of-use pricing may reduce network prices for all customers by reducing the cost of the network by encouraging greater use in periods where there’s spare network capacity. 

Since 1 July 2019, time-of-use based network tariffs are the default network tariff for all new residential and small business connections. 

Many of our customers, through their energy retailers, have chosen to switch to a time of use tariff that takes in to account when they are using electricity. 
 

Frequently asked questions

  • What's changed?

    From 1 July 2019 consumption based time of use network tariffs will become became the default for new residential and small business connections on an ‘opt out’ basis.

    his will also be is also applied to residential households or small businesses that change their network connection or have an advanced meter installed. However, the default is not applied immediately. 

  • When will customers be placed on a time of use tariff?
    The time of use tariffs won’t be applied immediately. A 12 month delay will be applied to each customer, to enable a year’s worth of metering data to be collected before the changeover of network tariffs.

    The 12 month data sampling period will provide customers with the opportunity to better understand their electricity usage, including variations over the year. Customers can access their usage data through contacting their current retailer. 
  • Will customers automatically be placed on a time of use consumption based network tariff?

    No, the time of use tariffs won’t be applied immediately. A 12 month delay will be applied to each customer, to enable a year’s worth of metering data to be collected before the changeover of network tariffs.

    The 12 month data sampling period will provide customers with the opportunity to better understand their electricity usage, including variations over the year. Customers can access their usage data through contacting their current retailer. 

    Some customers may have access to less than 12 months of data (e.g. if a customer moves into a household once the data sampling period has already commenced).

  • What are the time of use network tariffs?
    Residential Customers

    Residential customers will be placed on the residential low voltage time of use consumption network tariff (TAS93). 

    Small Business Customers

    Small business customers will be placed on the business low voltage time of use consumption network tariff (TAS94). 

    Customers will be placed on their respective time of use network tariffs, following a 12 month data sampling period.

  • How are these network tariffs calculated?

    Like our flat rate consumption network tariffs, TAS93 and TAS94 are calculated according to how much energy is consumed, in addition to your daily service charge. With these tariffs though, time of use is also taken into account. This means that the network charges associated with electricity used in off peak (or shoulder for small business customers) periods are priced at a lower rate than electricity used in peak times.

    The below figures set out the different charging structures for each network tariff.

    Residential Low Voltage Time of Use (TAS93)  Business Low Voltage Time of Use (TAS94)

     

  • What is peak and off peak time?

    Customers’ use of electricity fluctuates throughout the day. Peak times refer to the times of day when our customers’ electricity consumption is at its highest, typically throughout the winter, and during morning and early evening. Using electricity during peak times is higher than off-peak or shoulder periods due to the strain placed on the network.

    Off peak times are generally when customers use less electricity. The off peak rate is  lower, set during specific times and on specific days to incentivise customers to use electricity outside of the peak times.

    The time periods peak and off peak times for residential and small business time of use consumption differ slightly. The small business time of use tariff also includes a shoulder rate. 

    The below tables set out the different time of use periods applicable to each network tariff. Both time periods are based on Australian Eastern Standard Time.

    Residentail time of use (TAS93)


    Small business time of use (TAS94)
  • What triggers the 12 month data sampling process?
    There are four events that will begin the 12 month data sampling process:
    • New small business and residential premises that connect to the network;
    • Small business and residential premises that have a meter replaced;
    • Small business and residential premises that upgrade to an advanced meter; and
    • Small business and residential customers that change their connection characteristics. 
  • What happens at the end of the 12 month data sampling period?

    Following the 12 month data sampling period, TasNetworks will inform the retailer of the intention to reassign a customer to the default time of use network tariff. 

    If TasNetworks does not receive an opt out request from a customer’s retailer during the notification period, the
    customer will be reassigned to the applicable default network tariff (either TAS93 or TAS94).