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1 energy bill out of 10 contains anomalies or errors – Why pay more than you should?

By February 12, 2019 No Comments

In our experience at Leading Edge Energy, 1 energy bill out of every 10 we come across has some form of error or anomaly in them, which results in users paying more than they should be.

Understanding your energy bill is not a straightforward affair and if you know what you are looking for, then you could make some substantial savings.

Bundled invoices are usually sent to Small Market customers while unbundled invoices are sent to energy-intensive businesses which pay Commercial & Industrial  (C&I) rates (commonly referred to as Large Market customers).

Bundled invoices are presented in a simpler format, but they can also mask extra charges. Unbundled invoices also allow scrutiny of Direct Metering fees, network charges, market rates amongst others but often have high exit penalties and less protection by law.

Here’s how Leading Edge Energy  helped a client.

Situation

The Port Campbell Hotel in Victoria received a $12,900 credit refund after Leading Edge Energy opened a case against the retailer for overcharging.

After analysing the client’s energy bill, we found that they had been put on the wrong default rates, even though they requested to be put on a small business plan with Origin Energy.

 

What we did

refundLeading Edge Energy analysed the bill and we established that although Origin confirmed that the Port Campbell Hotel had signed up to the small business plan, they were actually put onto large business default rates at 27.5c/kwh for peak, and 15c/kwh for off-peak, plus all other charges.

When we audited the client’s bill, it became apparent that they had been put on the wrong default rates. Leading Edge Energy opened a case with Origin informing them that our client had been paying more than they should. Acknowledging the error Origin provided 13 months’ refund in credit.  

Understanding your energy bill – Small Market Customers (bundled)

Small market customers – residential and small business energy users are considered less sophisticated energy consumers and therefore provided with a simpler more protected and regulated retail energy market: The small market is typically characterised by:

  • Simpler billing structure (bundled billing);
  • Simpler supply contracts with low exit fees;
  • Less choice when it comes to retailers, network tariffs and metering;
  • Greater pricing regulation;
  • More protection by competition law;
  • Representation from ombudsmen;

Residential and SME customers generally receive invoices in this bundled format.  Rates are bundled up in simple Peak, Shoulder, Off Peak, Demand and Service charges.

All the other charges that you’d see on a C&I market bill (network charges, environmental fees, etc.) are hidden, bundled into these rates so the final base rates are much costlier.

In the small market the rates only change once a year, but the discounts that may change from retailer to retailer.

Understanding your energy bill – Large Market Customers (unbundled)

Large market intensive energy users are considered more sophisticated energy consumers which scrutinise billing. The C&I system involves:

  • Complex billing structure (unbundled billing)
  • Detailed and restrictive supply contracts with high exit fees
  • Greater choice when it comes to retailers, network tariffs and metering
  • Limited pricing regulation
  • Less protection by competition law
  • No representation by offices of the Ombudsman
understanding your energy bill

An example of an unbundled energy bill (All personal data removed)

The C&I bills are much more transparent and broken down into:

  • Energy charges
  • Network charges
  • Environmental charge
  • Market charges
  • Metering charges
  • Retail service charges

Because final base rate does not include the above as a bundle, it is significantly cheaper than that offered to SMEs.

The other charges are kept separate but are still paid through the retailer who acts as an intermediary. Once the bill is settled by the customer, the retailer will, in turn, settle the outstanding charges.

Need help understanding your energy bill?

Our Energy Management Consultants will help you make sense of your bill, secure better rates and ensure all charges are valid and correct.

Call us on tel: 1 300 852 770 or send us an email on info@leadingedgeenergy.com.au.

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