Electricity retailers such as Energy Australia have sent out letters to customers celebrating a decrease in electricity charges. ‘What you’ll pay depends on how much electricity you actually use’. The wording is carefully crafted to disguise how they are penalising those who are vigilant about their power usage. How is this done?
Essential Energy is the supplier. They advise Energy Australia about an increase in costs. Using an ‘average household in the area’, Energy Australia’s pricing team makes a value judgement on how that increase is distributed between Daily Supply Charge and Usage Charge. The Daily Supply Charge represents a constant revenue source to the retailer. The higher they weight this, the greater is the guaranteed revenue. So, by weighting that higher they can then argue they have reduced the kilowatt charge/hr.
What does it mean for your bill? If your usage is higher than the increase in the Daily Supply Charge then you will experience a decrease in your bill. Conversely, if you are vigilant about your usage, then the Daily Supply Charge will be greater than your usage charge. Your bill will increase. You are being penalised for your vigilance. Energy Australia had no counter-argument to this!
However, there is something more sinister involved. The above can be used by the government to argue that inflation in power prices is decreasing.


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