Electricity Tariff Reform in South Australia – What does this REALLY mean to 750,000 homeowners already struggling with some of the highest electricity prices in the world?
Well, it’s not all good news, except if you own an electricity company of course. Consumers are going to a pricing structure known as ‘cost reflective pricing’. What this means is that, if it costs the electricity company less during the day for power then they will, of course, have to charge the homeowner less, and vice-versa, when it costs them more, they charge will more. Sounds innocent enough doesn’t it?
So far no alarm bells are ringing but perhaps they should be ringing loudly. That’s because wholesale prices for electricity outside peak demand times are actually quite cheap, very cheap in fact (not a lot of home electricity demand at midnight or in the middle of the day when people are working). Peak demand times are periods where people use the most electricity, this is usually in the late afternoon, evening after work, after school and during morning breakfast times. Electricity prices spike during these times.
So, by moving to the new cost reflective pricing structure, this would essentially have the effect of reducing electricity prices during the day and in the middle of the night, and increase electricity prices at the times you actually use electricity.