United/Jemena forcing new solar customers onto TOU tariffs

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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby president_ltd » Fri Jul 09, 2010 6:41 pm

Sojin_Muneshi wrote:Historically ToU peak rates have always been higher than GD or 24/7 flat rate (peak), to make up for the access to off-peak for all loads overnight and all weekend hence Tru's Standing offer ToU peak is 8c higher at 28c to their two rate peak at 21c.

As you can see the rates are virtually identical to the GD and Y8 rates in the "two rate" (flat rate 24/7) and significantly cheaper than their ToU tariff for the 80 hours of "peak" / week, this price moves down from @28c/kWh to 21c/kWh, ie thats effectively a 25% reduction!
....


your implication is that because "its too good to be true" then it must be false.

as i've stated previously on this thread, there is more than enough margin in the electrical retail side for them to still be making plenty of money on the tariff as i've stated it.

its a pretty simple exercise with publically available information to map the costs that retailers have to pay to distributor + transmission as well as AEMO for the actual cost of electricity from the generators themselves.

taking the tariff that TRU have shown, by setting the peak pricing from 7am-11pm with $/kWh at >20c when for pretty much for 13 of those 16 hours 'peak' is at or below 10c/kWh 'cost' to them.

reality is that its the other larger retailers that are gouging consumers. i.e. the company YOU work for :)

the cost basis for how the charges the retailers make are to some extent determined by the network tariff, and there does seem to universally be a 1:1 mapping between network tariff and retail tariff structure, reality is TOU gives more flexibility there.
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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby Sojin_Muneshi » Fri Jul 09, 2010 10:17 pm

its a pretty simple exercise with publically available information to map the costs that retailers have to pay to distributor + transmission as well as AEMO for the actual cost of electricity from the generators themselves.

taking the tariff that TRU have shown, by setting the peak pricing from 7am-11pm with $/kWh at >20c when for pretty much for 13 of those 16 hours 'peak' is at or below 10c/kWh 'cost' to them.


Yes I agree, with the long haul marginal cost of generation being @8c and the typical Network tariff (Distribution and Transmission combined) being @8c it implies the flat rate tariff should be in the order of 16c from an external cost point of view, obviously there are Energy Trading, risk hedging (Retailers are exposed to VOLL events) billing/mailout and IT costs, along with credit risks on those who dont pay their bills. The actual GD price of 21c suggests a typical 5c margin in the retail business, and yes I think there is plenty of margin in there for substantial reductions, - I just dont believe Tru is intentionally reducing, they are one of the big three who dont want to cannibalise the market.


reality is that its the other larger retailers that are gouging consumers. i.e. the company YOU work for
- no - you are not correct in your assumptions of who I work for, and that is not the reasons for my view of this situation.

I honestly suspect Tru have made an error, only because I know how incompetent they can be, and how little the big 3 retailers wish to give away any margin, or start a price war. I am not defending any other retailers pricing position - its got nothing to do with who I work for, and no I dont work for AGL Retail.

I hope you are right, if you are it would suggest prices are about to tumble for everyone, but the price still looks like a confused sales person has simply run the GD/Y8 model and typed it up for you as ToU, or perhaps their pricing model has a bug, but in the end the billing you finally get will prove me right or wrong.

I'm more than happy to be incorrect in my assumption, as it would mean true competition is finally breaking out in the residential market.

It will be interesting to see how many other customers report accessing the same tariff?

regards

Sojin
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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby president_ltd » Sat Jul 10, 2010 10:18 am

Sojin_Muneshi wrote:
its a pretty simple exercise with publically available information to map the costs that retailers have to pay to distributor + transmission as well as AEMO for the actual cost of electricity from the generators themselves.

taking the tariff that TRU have shown, by setting the peak pricing from 7am-11pm with $/kWh at >20c when for pretty much for 13 of those 16 hours 'peak' is at or below 10c/kWh 'cost' to them.


Yes I agree, with the long haul marginal cost of generation being @8c and the typical Network tariff (Distribution and Transmission combined) being @8c it implies the flat rate tariff should be in the order of 16c from an external cost point of view, obviously there are Energy Trading, risk hedging (Retailers are exposed to VOLL events) billing/mailout and IT costs, along with credit risks on those who dont pay their bills. The actual GD price of 21c suggests a typical 5c margin in the retail business, and yes I think there is plenty of margin in there for substantial reductions, - I just dont believe Tru is intentionally reducing, they are one of the big three who dont want to cannibalise the market.


to be clear on the pricing.

for my area, take: http://www.jemena.com.au/operations/dis ... hedule.pdf for the network tariff with 'network' rates of:
A10I / F10I* Peak Unit rate 10.179 c/kWh, Off Peak Unit rate 1.957 c/kWh

add to this the actual cost of generation: http://www.aemo.com.au/data/GRAPH_30VIC1.html which covers yesterday/today/tomorrow and its a PEAK of 3.2c/kWh generation cost with an average of around 2.4c/kWh.
if we further take http://www.nemweb.com.au/mms.GRAPHS/DAT ... H_VIC1.csv with this month's PEAK times only (7am-11pm), its an average of 3.01c/kWh.

to be charging something at peak for >20c/kWh that is COSTING 10.179+3.20=13.379c/kWh at most (and 90% of the time is even less than that) is good margins no matter how you slice and dice it.

i don't buy the argument of "substancial costs and backend IT systems", its very clear to me that its clearly not a strong point in their business. :)
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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby Sojin_Muneshi » Sun Jul 11, 2010 8:16 am

add to this the actual cost of generation: http://www.aemo.com.au/data/GRAPH_30VIC1.html which covers yesterday/today/tomorrow and its a PEAK of 3.2c/kWh generation cost with an average of around 2.4c/kWh.
if we further take http://www.nemweb.com.au/mms.GRAPHS/DAT ... H_VIC1.csv with this month's PEAK times only (7am-11pm), its an average of 3.01c/kWh.


To understand the true underlying wholesale price you need to look at the long haul margin cost, not the average spot price in winter, that price of peak in winter reflects the lower overall demand on the National Grid and is due to the lower cost power stations being despatched to set the spot price.

If you are going to try to establish the average price the Retailers are facing as input cost you need to look at the weighted average for 12 months, and probably across more than one 12 months, ie the long haul marginal cost.

You are comparing the fixed price of the retail prices to effectively the lowest daytime prices (peak) that occur in the market, ie Winter;

Even then there are spikes in the market, on the 21 of June in Victoria the spot market hit $1755/MWh or effectively $1.80/ kWh

The spot market is set by the price bid in by the highest generator to be dispatched, in this way wind and hydro might bid in $0 but ultimately be paid $32 for the 30 minute period, the fair way to understand the input cost to a retailer is to understand the average cost across the year, as they fix your tariff for the year, they are not providing seasonal pricing or exposure to VOLL - yet.

VOLL is a Wholesale market cap on the highest price retailers can pay, it is currently set at $10,000/MWh or $10/kWh and the last VOLL event was in late January 2009.


You can see from the AEMO average daily data below that the Summer price is much more volitile and can move from 5c to 30c quite easily due to warmer weather and largely the airconditioning load increases.


Interestingly this data shows the price in Tas being negative on a few days, proving even AEMO can get it wrong - smiles




Date .............NSW...........QLD.................SA...................TAS..............VIC
................RRP Peak....RRP RRP Peak.. RRP RRP Peak..RRP RRP Peak RRP.. RRP Peak RRP
01/07/2010..29.66 30.39....23.59 26.13....32.34 27.49........13.17 2.03..........20.04 13.77

28/01/2009...62.36 84.82...55.99 75.33....1276.72 2017.19...78.97 103.71...... 404.53 625.17
29/01/2009 132.32 195.... 96.81 138.75 ...1777.67 2792.99...513.53 774.84.....2376.06 3755.5


02/02/2009..52.25 70.06....37.49 47.61....60.16 80.5......... 78.41 93.56........56.32 74.84
09/02/2009..32.48 36.9 ....121.39 180.01. 6.80 33.12......... 54.04 65.79....... 10.57 32.81

02/02/2010..27.18 29.53... 27.05 30.35... 140.55 211.46....44.04 -85.56......146.37 220.87
03/02/2010..32.06 36.64...31.06 36.35....192.64 292.86.. -76.01 -138.29.... 200.73 306.49
04/02/2010 300.80 467.05..26.13 30.25....27.76 29.29..... .31.43 33.27......... 27.74 30.04

to be charging something at peak for >20c/kWh that is COSTING 10.179+3.20=13.379c/kWh at most (and 90% of the time is even less than that) is good margins no matter how you slice and dice it.


I therefore think your use of 3c as the average peak rate input costs to Retailers is too simplistic and incorrect as its too low, my 8c would be generous but still leaves a very large gross margin for the Retailers.

i don't buy the argument of "substancial costs and backend IT systems", its very clear to me that its clearly not a strong point in their business


There are very substantial costs to the energy trading, pricing, and billing systems of retailers (usually desparate systems) .

As an example AGL recently implemented SAP as its new billing engine, the $90M project has blown out to $215M, the costs arise in the need to apply different bundled pricing per Network area, and there are 13 seperate distributors in the NEM, each Retailer has the same issue.


http://www.misaustralia.com/viewer.aspx?EDP://20090226000030875863&section=management

AGL billing system's big bill
Thursday, 26 February 2009 | Chris Jenkins
AGL has spent more than $215 million on its SAP-based Phoenix billing project


The "Phoenix" project was meant to save $35M per annum from operating 5 legacy billing systems, however that has not been realised and was in fact over ambitious as this new SAP system requires more key entries for the same given action.

Both AGL and Origin have outsourced their IT Server operations to India to reduce costs, along with their call centres, AGL is currently outsourcing their billing to Malaysia to try a further reduce costs in light of the huge blow out in their SAP implementation costs.

"Phoenix" is an apt name, the bird has to crash and burn before it rises again.

(I dont work for AGL, that doesnt mean I dont know what is going on inside it, or other businesses)


AGL have continued to have horrendous EWOV complaints (the worst performer) followed closely by Tru Energy.

It is the use of Temps and outsourced oversea's resources that leads to most of the incompetence in Australian retailers, they retain no technical expertise on metering or connections yet are the primary contact point for customers on both. As previously mentioned, I am not even convinced Tru Energy know their own retail products well enough to accurately quote them.

Tru Energy is currently rebuilding its internal capabilities after a disasterous outsourcing program, and has been reprogramming billing routines furiously in the last 6 months to bill ToU PFiT.

There are high and real costs to these back office systems that can't just be shrugged off as minor.

regards

Sojin
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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby fordhami » Thu Jul 22, 2010 9:02 pm

How did Aemo get the pricing wrong for TAS? The price can vary from $10000Mwh to -$1000Mwh. I don't really understand how this works, I guess it is better in some cases for the generator to pay to get rid of the generated power (eg Wind probably fits the bill)
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Re: United/Jemena forcing new solar customers onto TOU tariffs

Postby Sojin_Muneshi » Sat Jul 24, 2010 11:26 am

.
The Snowy Hydro and the Victorian Kiewa Hydro systems can both pump water back up to higher dams as a way of "storing electricity" and the use of massive electric pumps to do so would require them to buy electricity rather than be generating or selling it?

However I am not aware of cascaded pondages existing in Tasmania to allow that to happen, and in anycase would assume that the energy purchased to do the pumping would be transacted as a retail energy sale like everyone else, rather than a negative wholesale energy trade? or price? so I cant explain what AEMO was doing with the pricing in Tasmania on that day?


regards

Sojin Muneshi
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Re: United/Jemena forcing new solar customers onto TOU tarif

Postby Patrick » Wed Oct 07, 2015 8:24 pm

Hi all
new on here. Anyone out there have any knowledge of subcontractors that installed/changed the smart meters in Victoria. What sort of money were they paid for the changeover. Understand it is fairly basic, especially for the single phase meters. The rates would have differed depending on the installation.
tks all
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