The Tasmanian Electricity competition - what it means for you

Changes to make the Tasmanian energy sector more competitive are underway and customers will be able to benefit from these developments in July.

The Tasmanian Electricity competition means customers will have more choice and security in the electricity market because they can compare electricity suppliers to find the best deal.

What this means for non-contestable customers

If you are a contestable customer it means you are a residential or business customer with an average yearly expenditure of less than 50 megawatt hours of electricity.

This sector of the market will continue to receive electricity from Aurora Energy until July 2014, when competition will heat up and the market will benefit from 'full retail contestability'.

From this date, customers can choose either to stay with the sector's current monopolist - Aurora - or to enter into a contract with another retail company.

What this means if you are a contestable customer

Contestable customers are usually bigger businesses that consume at least 50 kilowatt hours over a year.

These clients are already able to do an electricity comparison to ensure they are getting a better deal.

Feed-in tariffs (FiT)

Customers with solar power generators that feed into the grid may also see some changes this year, as the government has taken steps to ensure customers who export electricity receive a fair and reasonable rate.

Customers who have already installed this type of system will be able to compare suppliers to see if one can offer them a higher feed-in tariff, which could be a more attractive deal.

Those who have renewable electricity systems can choose from either a net or gross metering system.

Net metered FiT

With a bet metered FiT, if you consume 4,000 watts per month, but produce 2,000 watts, not all of the power generated on your solar system will be used in the household. It may be exported to the grid during peak hour, in order to fill a gap in the supply chain.

If 500 watts are exported onto the grid, the household or business's use will only be offset by 1,500 watts as this is the amount the household produced and used for itself. This means they will only need to pay for 2,500 watts of power from their energy retailer at their current tariff.

Gross metering system

Another option is to choose a gross metering system whereby customers get the FiT rate for all energy supplied, regardless of what is actually consumed by the household or business themselves.

In the above scenario the customer would pay the full price of 4,000 watts but their bill would be calculated on the difference between what the retailer charges for the 2,000 watts generated by the system.

This is a great system for the consumer when the cost of electricity generated is more than the price the household pays for what they consume, and may mean the client receives a total credit or savings.

Posted by Liam Tunney.