Energy is a complex category, yet too often large multisite businesses and their staff are busy managing many commodities at once. This can make it difficult to gain the subject matter expertise needed to understand each commodity in detail. But if you do, it will ensure you are in the driver’s seat to drive the best prices for electricity and lower your overheads.
Demystifying the Australian energy re-contracting gorgon like ‘NTR’s or Network Tariff Reviews’ will ensure you are better placed to make educated, informed decisions, and as you are likely to be heading into ‘re-contracting season’ soon, this will increase your chances to drive your Australian electricity costs down.
What is a Network Tariff Review?
Network Tariffs cover your regulated prices that are set by your network distributor. They cover their costs to build, maintain, and operate the poles and wires that deliver your electricity to you.
As Australian regulation states, your network distributor will delete and change tariffs from time to time. Your retailers are still unlikely to proactively review these changes to your specific meter and approach you with savings opportunities. If you have had an increase in demand/load (even if it was a one-off event), it could have pushed up your tariff.
And even if you have addressed the issue and reduced your load and the subsequent risk, unless your tariff is reviewed, it’s likely to still be charged at a higher rate.
Network tariffs can change over time, what might have been the best tariff for you three years ago, could be ineffective and overpriced now. Not all Energy distributors are proactive in identifying when and if you are entitled to a better and more cost-effective tariff.
What is Network Tariff Review best Practice?
It is best practice to review your Network Tariffs annually. It is recommended for Victorian customers that this is conducted in February each year, and all other states should be doing this in August.
Why?
The regulation states that Victorian distributors adjust the tariffs in January each year, and all other states do these in July each year. If you are not reviewing your tariffs as soon as they are released (and your tariffs have been adjusted down), you will be leaving money on the table.
What to look out for with your Network Tariff Review?
Some essential components of a network tariff rate structure (where applicable) are the demand, capacity, site-specific minimum demand, usage thresholds, and the corresponding time of use pricing. To avoid costs, optimize your tariffs, and improve your portfolio meter data with a critical consumption and demand profile.
It’s critical that you:
- Can easily access at least 12 months of historical data of your entire portfolio.
- Have easy access to a complete data set covering the last 12 months for all demand reset opportunities.
- You need to trust the quality of your previous 12 months of data – as your network provider is likely to need to verify any findings against this data before they will be approving any changes to the portfolio.
- Reduce any delays to the source, translating, and analyzing your data. Failure to meet all of these ‘must-haves’ are likely to result in you continuing to pay unnecessarily inflated tariff costs
