Annual Rate Change Explained
Energy rates change each year. Learn a little more about when, why and how.
Why do energy rates change each year?
We need to adjust your energy rates in-line with the latest network and wholesale costs. These have changed since we last set your prices. The good news is that this means you shouldn’t see any more changes to your energy rates for another year.
Our policy has always been to send a written notification whenever we change our rates to give our valued customers with as much notice as possible.
Why have my rates gone up?
Each year we adjust your energy rates in line with network and wholesale costs. If these costs are higher, we must pass on the cost. The good news is that this means you shouldn’t see any more changes to your energy rates until 2024.
Ongoing local and world events have caused wholesale power prices in Australia to change. When these costs are higher, we must pass on the cost.
The recent wholesale cost of energy has changed a lot over the last couple of years. As reported by the ABC on the 29th April 2022 “Australia’s wholesale energy prices rise by 141% adding to cost of living pressures”.
And the topic of energy prices is covered further in the 25th May 2023 Financial Review “Power Bills To Jump”
The above article also mentions just how tight retailer “razor-thin margins” have become, leaving no room to absorb higher wholesale costs. Although GloBird have absorbed as much of this price increase as we can, we cannot avoid passing some of those cost to customers.
To get a rough idea of what makes up a typical electricity bill, check out the cost stack chart (taken from page 4 of the Victorian Default Offer 2023–24 Final Decision Paper) showing the components that make up a typical household bill on a default energy plan. The retail margin is the small orange bit. Although this is not directly linked to your specific energy plan, it provides a good insight into a typical energy bill.
The good news is that once we re-set rates, you shouldn’t see any more changes to your electricity price for another year. To learn even more about the cost stack and retail margins for default energy plans, see the final determination document “Default market offer prices 2023–24”
Why do energy rates change?
GloBird is a retailer, we buy energy on the wholesale market, and pay the network/distributors who deliver the energy to your premises. As such, we do not control wholesale or network prices. Wholesale costs are driven by supply and demand on the NEM (National Energy Market), and network companies obtain government approval for their distribution charges.
We can see from the image below, taken from AER (Australian Energy Regulator) how drastically wholesale energy prices have been changing.
Why do gas rates change?
GloBird is a retailer that buys gas on the wholesale market, we pay the network/distributors who manage the infrastructure and deliver the gas to your home. As such, we do not control wholesale or network prices. Wholesale costs are driven by supply & demand. The recent wholesale cost of gas has changed. To learn more about this visit our blog.
These costs make up the vast majority of your bill. GloBird are a budget retailer and operates on very small margins to pass on the best price we can to our customers. The retail margin makes up only a very small percentage of a typical energy bill.
We can see from the image below, taken from AER (Australian Energy Regulator) how drastically wholesale gas prices have increased.
This year, the timing of when the annual price change occurs changed from calendar year to financial year. Historically, Victorian gas distributors were required under the law to reset their prices once a year in December for approval by the Australian Energy Regulator. Effective from this year (to align with most other states) they must adjust their rates from July 1. GloBird change rates one month after the networks do.
Why have my rates changed so soon after I joined you?
GloBird normally reset energy rates once a year. The length of time your price will remain unchanged depends on when you joined us. The further away from that annual price re-set date, the longer your rate will remain unchanged. Likewise, customers who join us later may see a rate change sooner. The good news is that once we re-set rates annually, you shouldn’t see any more changes to your rates for another year.
What can I do to save more?
Ultimately, the best way to control your energy costs is to manage your usage. A list of energy saving tips is available below.
Electricity How Can We Save Energy In Our Homes?
We always want to make sure you’re on the most cost-effective plan, you can contact us at any time to check your plan. Email CS@GloBirdEnergy.com.au
What are the government doing to ease the pressure of rising energy costs?
The federal Government recognise the need to help Australians with the rising cost of energy and have teamed up with the States to set up the largest “Energy Relief Package” in Australian history. Together they have put $3 Billion into a relief fund to help millions of Australian households . Many of the payments will automatically be applied to energy bills. To learn more about eligibility and the details of the Energy Relief Package for your state or territory click here.