Network Tariff Optimisation
ERM Power’s Network Tariff Optimisation (NTO) program has been designed specifically to save our customers money, with the next round of reviews having just happened.
The last NTO review in March 2019 identified $3.5 million in potential annual savings for our large customers that could be realised simply by switching to a different network tariff. Of that figure, customers who implemented our recommended tariff change expect to realise approximately $2.1 million in annual savings (in aggregate). This leaves $1.4 million of potential savings as a lost opportunity for those that did not change. The September reviews are already well underway, and once again, we’re pushing to ensure that 100% of identified savings are taken up by customers.
What are Network Tariffs?
Network Tariffs are regulated pricing structures set by the network distributor to cover the cost of building, maintaining and operating the poles and wires to deliver electricity to customers. These tariffs are “passed-through” to large customers, meaning the distributor’s costs are billed to you via your retailer. Unfortunately, the tariff selected by the distributor doesn’t always take into account more complex factors and alternative opportunities, rendering it less than ideal from the outset. Network tariffs—like business operations and energy use—also change over time, meaning the right tariff three years ago may be far from the most cost-effective now, and not all distributors are proactive in reassigning tariffs to optimise and align to the customers’ circumstances.
Cracking the Network Tariff Code
ERM Power recognises the enormous task of attempting to decipher and then maintain the optimum tariffs for your business over time, which is why we also see the considerable value-add for investing in this complimentary service on behalf of our customers.
Our team of NTO experts collates a raft of business-specific energy data and analyse it within the complex rules of tariff eligibility, matching your precise use and needs to the most cost-effective current tariff. Given that network tariffs can comprise around 33% of the total energy bill for a large customer, potential savings can be substantial.
I’ve already changed my tariffs, does this still apply to me?
Even if you’ve previously had your tariff reassigned, routine changes to the tariffs themselves mean there is never any harm in reassessing. Network tariffs are regulated by the Australian Energy Regulator (AER) and typically refreshed by individual network operators every year, but even in instances where the tariff itself hasn’t changed, it’s likely that your business’s energy use has.
How do I get started to implement the change of tariffs?
Our team of experts will have already done the hard work for you to identify the optimal tariff for your site. Your account manager will email you a detailed report of the NTO review (including identified potential cost savings) and will make recommendations based on this analysis. Should a tariff change be recommended, you’ll simply need to agree to the change and your Account Manager will get the ball rolling.
If you have any questions, please contact your account manager, otherwise get in touch with us.
Estimated savings identified by ERM Power’s Network Tariff Review Optimisation program for large customers in the March 2019 tariff review. Actual savings will vary depending on customer usage and network charges.
Network tariff eligibility requirements apply and changes are at the discretion of the Distributor. ERM Power does not guarantee that the Distributor will accept a request to change the network tariffs. Our review is based on historical usage data and current tariffs. Your historical usage may not be reflective of your future usage and tariff pricing may change. If a network tariff change is approved by the Distributor, you may be locked into the new tariff for a period of time. Please consider future usage before proceeding with the request to change tariffs.