Questions & answers: NSW electricity and gas prices and assistance with bills

Last updated: 16 June 2011

The NSW Government recognises that energy price increases can be difficult for some households to manage. To increase financial support to households on a low or fixed income, the NSW Government is introducing the Low Income Household Rebate from July 2011 and a new Family Energy Rebate in 2012. 

Information about energy prices

1. What are the components of my electricity bill?

Electricity costs cover:

• wholesale energy costs (electricity from generators purchased in the National Energy Market)
• retail costs (retail call centres and administrative costs)
• distribution and transmission network charges (costs to maintain and upgrade the poles and wires, including 24 hour emergency response teams)
• Commonwealth and State Government Green Schemes.

2. Who sets NSW electricity prices?

The Independent Pricing and Regulatory Tribunal (IPART) regulates retail electricity prices for small business and residential customers on standard contracts until at least 2013.

The final price of electricity includes wholesale costs, retail costs, network costs and green schemes.  IPART reviews wholesale prices regularly, to take into account the cost of purchasing electricity from generators.

Network charges (poles and wires) are regulated by the Australian Energy Regulator (AER), a national independent body. These network charges are included in the final price IPART sets.

3. How does the AER set network prices?

The AER is the national, independent specialist regulatory body for distribution and transmission electricity network businesses in Australia. In 2009 the AER released new NSW network charges for five years between 2009 and 2014.

4. What is a regulated price and do I have to pay this?

A regulated price is the price charged to customers on standard contracts. 

NSW small customers can choose between a standard contract, or shop around and choose their own retailer. IPART's Myenergyoffers website helps customers compare energy deals.

5. What are the new electricity prices from 1 July 2011?

IPART has announced prices from 1 July 2011 as part of its annual review into electricity prices. IPART has released indicative annual bills for average residential and small business customers. These can be found at www.ipart.nsw.gov.au.

6. What sort of increases are these?

The report indicates regulated retail electricity prices will rise on average by:

• $230 per year (17.9%) for EnergyAustralia* residential customers
• $216 per year (15.5%) for Integral Energy* residential customers
• $316 per year (18.1%) for Country Energy* residential customers

* On 1 March 2011, TRUenergy bought EnergyAustralia and Origin Energy bought both Integral Energy and Country Energy. The new owners continue to use existing brand names.

7. Why are prices increasing?

IPART sets prices that reflect the efficient cost of supplying electricity to customers. An 'efficient cost' means energy businesses need to spend money wisely, and find business savings internally before passing costs onto consumers.

The key drivers of the price rises are:

• Green Schemes, such as the Commonwealth's renewable energy target scheme, which will increase bills by 6% (approximately $75 per household);
• Network charges, which will increase by on average 9%. 

8. Who regulates NSW gas prices?

The Independent Pricing and Regulatory Tribunal (IPART) agrees pricing arrangements with each of the standard gas retailers supplying small customers in NSW - AGL, Country Energy, Origin Energy and ActewAGL. Small gas customers are those that use less than 1 terajoule a year.

These pricing agreements set out the maximum price that each of these retailers can charge small customers on standard contracts in different parts of the State.

Gas customers can also choose to shop around and enter into a negotiated contract with another retailer to get the best deal for their circumstances.

The AER sets the network charges for gas. In NSW, the majority of gas networks are owned by private companies such as Jemena Pty Ltd. The AER sets the amount Jemena can charge retail gas companies and this cost is included in the price paid by small gas customers.

9. What is the process for reviewing gas prices?

IPART has reviewed gas retail prices for 2010 to 2013 and released its report with new prices coming into effect from 1 July 2010. In its decision making process IPART held a public hearing to listen to the views of the community and stakeholders and took public submissions.

For more information on your gas price visit the IPART website.

10. What are the most recent gas prices?

Over the three years to 2013 prices are expected to increase between 12 and 17 per cent, depending on where you live. 'Small gas customers' are households and businesses that use less than 1 terajoule a year, equivalent to an annual gas bill of around $15,000.

Prices will vary across metropolitan and regional NSW. About 30 per cent of NSW households are connected to gas and currently spend about $12 a week on gas.
These price increases do not include the Commonwealth Government's proposed Carbon Pollution Reduction Scheme (CPRS). The Commonwealth has announced that its proposed CPRS will now no longer come into effect until at least 2013.

For more information on the price of gas for each supplier visit the IPART website.

11. Why are the price increases different for each gas supplier?

Gas network charges account for about half of a customer's total gas bill. Prices vary between gas suppliers reflecting the unique characteristics of each network, which include differences in the number and length of pipelines in each network, the terrain and the size of the network area.

The Australian Energy Regulator (AER) sets network charges.  The AER also recently reviewed access arrangements for Jemena gas networks and network charges.

The Jemena gas network covers Sydney, Newcastle, the Central Coast, Wollongong and many regional centres. For more information visit the AER website.

IPART's final report on regulated gas tariffs provides for  retailers to pass on to customers any changes in network tariffs.

Assistance measures available for customers

12. I’m concerned I may not be able to afford an increase, what can I do?

The NSW Government has commenced work on implementing new assistance measures to help households with their energy costs.

From 1 July 2011, the new $200 Low Income Household Rebate will be implemented, rising to $235 by 2014.

The Government also intends to implement a Family Energy Rebate from 1 July 2012.

Other assistance measures include:

• Medical Energy Rebate ($145 a year rising to $200 from July 2011)
• Life Support Rebate (rates vary depending on the type of machine)
• Energy Accounts Payment Assistance (EAPA) vouchers
• Home Power Savings Program (savings of up to 20 per cent on electricity use)
• Retailer Hardship Policies and Payment Plans
• Funding and support for free financial counselling services offered by FCAN
• Save Power website (for useful energy saving tips and information on rebates to assist households purchase energy savings appliances). 

Centrepay is also available to prevent large energy bills by making regular instalments.

More information on electricity rebates and EAPA assistance is available from your electricity retailer or from the Energy Information Line on 1300 136 888.

For more information on rebates, hardship programs and payment plans contact your retailer, who can assist and if you are eligible, set you up with rebates or programs.

13. How will I receive the Low Income Household Rebate?

The Low Income Household Rebate replaces the Energy Rebate. For people that currently receive the Energy Rebate, they will not have to do anything, and will automatically receive the more generous Low Income Household Rebate from 1 July.

Customers that are eligible but not currently receiving a rebate need to contact their retailer to apply.

14. What else is the Government doing to address electricity price rises?

In addition to financial relief for customers on low or fixed incomes, the Government plans to merge the three network distribution businesses (the poles and wires) into two, which will save running costs, and review reliability standards imposed on the network businesses. 

These are the performance standards which the NSW network businesses must meet when designing and operating the electricity network.  The standards define targets for the average number of electricity outages per customer and maximum length of interruption per customer.

15. I run a small business, what assistance is there to help me?

There are programs available such as the Efficiency for Small Business Program, which provides personalised energy assessments, tailored action plans and rebates of up to $5,000 for making energy efficiency improvements that help small businesses save money and reduce carbon pollution. For more information visit www.savepower.nsw.gov.au

16. I have tried to talk to my retailer but they won’t help, what can I do?

Customers who need assistance with their energy bills should first contact their retailer.

You can also contact a community welfare organisation or financial counsellor. Community welfare organisations may be able to help people with immediate difficulty paying energy bills, for instance through the provision of Energy Account Payment Assistance (EAPA) vouchers and other emergency assistance. Financial counsellors can take a more holistic, longer term approach to dealing with the customer's financial difficulties. Financial counsellors work closely with community welfare organisations and can refer clients to other services where appropriate.

Customers who are experiencing difficulty dealing with their retailer can contact the Energy and Water Ombudsman NSW (EWON), which is a free, independent service available to help resolve disputes.

EWON has been approved by the Government as an independent way of helping customers resolve disputes with energy providers where internal dispute resolution procedures have failed. For more information you can contact EWON on freecall 1800 246 545 or visit www.ewon.com.au.

17. How can I shop around and compare energy deals?

Visit the Independent Pricing and Regulatory Tribunal’s price comparison website www.myenergyoffers.nsw.gov.au that allows small customers (households and small business) to easily compare electricity and gas deals for free.

For customers that may not have access to the internet or require assistance, they may call the NSW Government’s Energy Information Line on 1300 136 888 (select Option Two for the price comparison service).

18. What rebates and assistance can I get for my gas bill?

The NSW Government assistance measures are intended to help to households in need no matter what energy source they use. The same rebates are paid to eligible households whether they have gas or not. This recognises that households have similar needs even if some use gas as well as electricity. All households need energy for hot water, cooking, heating and cooling regardless of the source of that energy.

Because all gas customers will have some form of electricity account as well and for administrative purposes, Government rebates are paid off electricity bills in all cases.

Customers that also have the option to use gas for heating water, cooking and heating their homes are at an advantage because the cost of water heating is a large percentage of energy costs and gas is usually more efficient and cheaper.

These rebates are also available to long-term residents of caravan parks.

The Energy Accounts Payment Assistance (EAPA) scheme is different to rebates and EAPA vouchers can be used for both electricity and gas accounts.

19. I have a dispute with my gas retailer, what can I do?

Gas customers are also able to contact EWON if they are having difficulty resolving a dispute with their gas retailer. The NSW Government has made regulatory changes to ensure all gas retailers and distributors are members of EWON. All gas customers are able to access this free, independent service.