My New Rates
Why has the State Government increased Victoria’s Default Energy rates for 2020?
In July 2019 the state government took over the responsibility from retailers of setting the basic standing offer rates of electricity across Victoria as part of the government’s new Energy Fairness Plan, they set the “fair price” for electricity. Wholesale and network costs have changed since then. Wholesale is the cost for generators to create electricity. Network is the cost of maintaining grid infrastructure to transport energy safely. Together these components make up the vast majority of a typical household energy bill.
In order to derive the “fair price”, the energy regulator add up each component of an energy bill and calculate the fair price including a small Retail Margin of less than $80 per year for retailers. If you are on a GloBird market offer (after discount), your rates will be lower than the regulated price. You can read more about the state government fair price on the regulator’s website click here.
The default offer (or standing offer) is different to a market offer. The commission does not regulate market offers. Any decision to increase market offers is done by the retailer, but will naturally follow the same cost inputs.
Why are my energy rates changing?
If you received a price change notification, it is because we set your current rates back in 2019. We need to adjust your energy rates in-line with the latest network and wholesale costs. The wholesale cost of energy has changed since we last set your prices. Our policy has always been to send a written notification before we change our rates to give our valued customers with as much notice as possible. Our blog explains more about what’s driving energy prices in Australia at the moment.
What drives energy prices in Victoria?
Victoria is part of the National Energy Market (NEM). This is a wholesale market where energy producers sell their power, and retailers buy it. The underling cost of energy is determined by supply and demand. The wholesale cost of electricity has increased dramatically in the last few years due to lack of supply. The federal government recognise this, and recently revealed plans to improve the connection of the nation’s east coast power grids. They also want to increase the capacity of the snowy hydro scheme. Building this electricity and gas infrastructure takes time, but will eventually lower power bills in Australia. To learn more about what’s driving gas prices in Australia, click here.
Why have network prices changed?
The distributor (or network provider) owns the electricity poles and wires and is responsible for transmitting power from the generator to your property. Each year network companies request government approval to set their network charges for the year ahead. This year the government have approved a significant annual increase to network costs. This helps pay for infrastructure and maintenance. To learn more about what’s driving Network costs, click here.
My rate change seems kind of high, why is that?
We’ve consistently offered some of the lowest energy rates in Australia every year. Having such low rates can make even a couple of cents increase appear higher for a company with lower rates than the more expensive retailers. For example a 2 cent increase on a 10 cent tariff translates to a 20% increase. However if the tariff was 20 cents to begin with, the same 2 cent increase translates to a 10% increase.
What matters most is the ultimate rate you pay for power, and you can rest assured that GloBird will always provide you with some of the lowest rates on the market. As a retailer, we keep our operating costs to a minimum, and our margins are razor thin, however we can’t control the underlying cost of power. Our blog explains more about what’s driving energy prices in Australia at the moment.
How can I be sure the price change is fair?
GloBird doesn’t have lock in contracts, so we won’t just change your price unless it’s absolutely necessary. It’s simply not in our interests to do so. The underlying cost of power is set on the NEM (National Energy Market). The NEM is the wholesale market where all energy companies buy their power. Our blog explains more about what’s driving energy prices in Australia at the moment. As always, GloBird continues to be among the most competitive energy providers in the market. Please let us know if you have any questions. You can contact us on CS@GloBirdEnergy.com.au
Is GloBird still the best provider for me?
GloBird won Mozo’s best electricity provider in Victoria 3 years in a row for 2017, 2018, and again in 2019. We are often found to be among the cheapest energy providers in the country. We work very hard to delivery you the best rates possible. If your with GloBird, your getting a good deal.