Q1. WHAT IS TRANCHE 5A?
During June 2011 some 3,500 Tasmanian electricity consumers who spend around $10,000 per annum or more, on electricity at one metered site, known as a "NMI", will receive a Tranche 5a "Standing Offer Contestable Customer" notification letter, from Aurora Energy Network. Tranche 5a is the latest round of electricity deregulation in Tasmania. Perhaps in the future even residential consumers and micro businesses will have access to electricity competition and choice of retailer, like they do in most interstate markets. For now though, electricity competition in Tasmania is limited to sites who consume more than $10,000 per annum.
Q2. I RECIEVED A STANDING OFFER CONTESTABLE CUSTOMER NOTICE LETTER, WHAT DOES THIS MEAN?
Tranche 5a electricity contestability in Tasmania will enable users who have consumed more than 50,000kWh of energy in the 2010/11 Financial year at one metered site (NMI), to negotiate a competitive retail supply contract. Tasmanian Energy Brokers is working with local businesses and industry associations, to inform and collectively negotiate competitive electricity contracts for Tranche 5a Standing Offer Contract Customers (SOCC's).
Q3. IS THE WHOLE ELECTRICITY BILL CONTESTABLE, OR JUST PART OF IT?
The "contestable" or competitive elements of the electricity bill, such as peak and off peak energy and Mandatory Renewable Energy Certificates, make up around half the total cost of electricity, it is these cost components which are negotiable. Tasmanian Energy Brokers exists to help customers make the most of these opportunities and avoid the pitfalls.
Q4. WHAT ABOUT MY RELIABILITY OF SUPPLY, WHO WILL LOOK AFTER THE POLES AND WIRES?
The other half of the supply costs are predominantly made up of "Network Use of System" (NUoS) or transport charges, which remain regulated monopoly costs. Aurora Energy Network will continue to operate and maintain the poles and wires, irrespective of which Retailer you choose.
Q5. IF THE NETWORK COSTS ARE STILL A REGULATED MONOPOLY, IS THERE ANYWAY I CAN SAVE MONEY ON THEM?
Whilst these Network transport charges are regulated, Tranche 5a users have a choice of several Network tariffs. These include Flat Rate, Time of Use and in some cases Maximum Demand (MD) tariffs. Some of the Network tariffs may require the installation and possibly additional cost of a different meter or a "smart meter". Tasmanian Energy Brokers can help advise you on your choice of Network Tariff. Choice of network tariff is often independent of your choice of retail energy supplier and you can sometimes elect to change your network tariff irrespective of when your retail contract ends.
Q6. HOW SOON CAN I NEGOTIATE MY NEW RETAIL CONTRACT? WHEN CAN MY NEW CONTRACT START?
Retail contracts for Tranche 5a consumers can be negotiated as soon as you receive your Tranche 5a "Standing Offer Contestable Customer" notification letter. However supply under these contracts cannot commence until 1 July 2011 and possibly later where installation of a different meter is required.
Q7. I HEARD THAT LAST YEAR SOME CUSTOMERS WERE FORCED INTO CONTESTABLE MARKET CONTRACTS? WHAT HAPPENS IF I DON'T WANT TO SIGN ANAYTHING?
Unlike previous rounds of contestability, there will be a regulated "Standing Offer Contract" available for Tranche 5a consumers (50MWh - 150MWh pa), which you can stay on indefinitely and may even return to once your contract ends. This option is not available for larger electricity users, known as Large Offer Contestable Customers (LOCC's).
Q8. SO IF I DON'T HAVE TO DO ANYTHING, WHY WOULD I BOTHER AT ALL?
With a Standing Offer Contract available, the main reason to enter into a contestable market contract is to make savings over this Standing Offer. The amount of savings available (if any) through a negotiated contract, will depend on many factors, including the prevailing electricity market conditions, your consumption profile between peak times and off peak times and increasingly your motivation and willingness to make changes to the way you think about and use energy. Tasmanian Energy Brokers are able to help you with these calculations and decisions, but first you need to know you need help, you have to want help and you need about 15 minutes of your time!
Q9. ISN'T RETAIL CONTESTABILITY ALL ABOUT PRICE?
Finally and most importantly, it's not just about price. Energy users should also be aware that the terms and conditions of competitive market contracts are likely to be different to both the old Tariff and the new Standing Offer Contract. Energy users should therefore familiarize themselves with the contracts on offer and how these suit your business circumstances and feel comfortable seeking independent legal advice as you would for any other transaction of this value.
If you have any other questions, please let us know, the only reason we are here is to help you.