Thread: Getting a better Energy deal - WHAT A JOKE!

In slightly different order:

Originally Posted by FenceFurniture

My retailer was AGL, and is now Origin
Distributor (wholesaler) is Endeavour Energy

The distributor is not the wholesaler. They are just the delivery people. They don't buy and on sell. They get a fixed price for all the units they shift.
In fact they (most likely) have two main income streams. "Regulated" where they look after all the infrastructure they own and do things the state regulator says they must, like maintenance and new builds. From that they get an income based on how much electricity is shifted and which is also related to the value of their asset. They also can get penalised and have money taken away if they don't perform (SAIDI etc). There is also an "unregulated" stream where they can do contract work for anyone, just the same as any other contractor.

Originally Posted by FenceFurniture

Endeavour does all the maintenance, AGL does none (same for whoever next door is using as their retailer). I'd be pretty sure that it's Endeavour that does the meter reads too, and then just hands them out to the various retailers for their billing purposes.

I dont know the real set up in NSW but yes. Endeavour (and others) would do the work for AGL (and others) as a contractor and pass on the costs (they would never just hand them out). This would be reading, testing, new installs and repair/replace.

Originally Posted by FenceFurniture

So as far as I am concerned the only conscionable way the retailers can charge for daily supply is if Endeavour (or whoever the distributor happens to be) charges the retailers for a daily supply to each property. I'll not be at all surprised to learn that they don't, and IF they do, it would be a much smaller amount than the consumer is charged.

Very unlikely Endeavour charge a daily supply charge. But at the end of the day the retailer can split their billing how they like. I assume they justify the supply charge as some fixed rental of "their" meters. They don't have to do it this way. They could allow everyone "free" use of their meters and bump up the kWh rates (they could also charge everyone a high supply charge and zero rates for usage, that'd work too). Makes no difference to their bottom line, only the optics change.

Originally Posted by FenceFurniture

No, I definitely don't get them mixed up, which is why I question just exactly what the retailers do. So far it sounds like not much at all.

Very, very, very rough breakdown (others can correct me, please). Your total bill goes something like this:

Generator 25%
Transmission 10%
Distribution 25%
Retailer 25%
GST 10%
The Rest (feed in tariffs etc) 5%

In the old days meter reading (now the responsibility of retailers) was very labour intensive. Every single meter had to be physically visited every 90 days (and more for complaints etc). That was very expensive. Not so much now due to smart meters etc. But there is still a lot of old stuff around.
When the National market first started there was an immediate reaction to generators "gaming" the system. A year or three ago, the distributors got a bit of bad press over "gold plating" the system. Expect in the near future similar scrutiny of the retailers.
I am not saying these things dont/didn't happen. What I am saying is that the rules made by pollies and lawyers to get a certain outcome will be thought about very carefully and will be played. It isn't any use saying "those guys aren't doing what we wanted them to do". Those guys job is to maximise their profits within the rules. If they (eg) base their costs on high labour useage (eg reading meters) and get an agreement on that, then work out how to cut that labour usage (smart meters) that's actually how privatisation is meant to work. If no one checks up on them, to claw those savings/profits back, whose fault is that?

Shorter answer; I mostly agree with you, I think they are probably getting away with soaking up too much of our bills right now, but it's probably not a huge amount and if enough people put the torch to the belly of their pollies, the pollies will pass on the love to the retailers. But this is a sideshow to the main game of what will the future electrical system look like.

Regards
SWK

Originally Posted by maxxsinner

A lot of the issue in SA was because of the frequency fluctuation due to asynchronous generation from solar & wind, which was then compounded by the storm and transmission tower collapse - but the Vic interconnect was already disconnected due to the frequency limits being tripped before the towers collapsed.

A power station operator explained to me a little while back that the frequency meter in the control room used to hardly move (which has limits of 49 - 51 Hz. Beyond that protection kicks in) The more base load power was removed from the grid and asynchronous generation was added, the worse it has got. It think this summer, in Victoria at least, will be very telling of just how unstable things have already got. Batteries IMO, are simply a short term solution at best.

I'm an ex power station operator and I believe Bushmiller is a current one. The limits are much finer than 1Hz, closer to 0.3 Hz for load shedding. Yes, it's true that some older wind generators are "asynchronous" (like the ones in SA) newer ones aren't. But it is the VAr support from batteries (the point above the one you quoted) which is what fixes that problem. Not a short term solution. An actual fix.

Regards
SWK

Originally Posted by FenceFurniture

Surely the Distributors own the meters? Otherwise the meter ownership will have to be transferred every time I change retailer (which might be quite a bit from now on).

Also, when my Gas meter wasn't on the distribuor's data base (Jemena) it was up to them to sort it out, not AGL. As I understand things, it the "Billing rights" that become the property of the retailer, not the meter. Furthermore, it would then be each retailer's job to read their own meters, so there might be ten readers reading 10% each of the meters in each street - drastically inefficient.

You're probably right about ownership in NSW. In that case the retailers maybe "renting" the meters from whoever does own them. (WoodPixel, not wrong about rent seekers and clippers) I had an idea that the distributor in SA did once own the meters, but in the last year or so this was transitioned to some independent holding body. Each meter has a "NIMMI" number (I think that's right) with all the data about ownership, retailer, customer and history sitting in a data base which is used by, but not owned by the retailers (and anyone else that needs it). I know who did look after it, I thought that had changed recently. I had cause about 3 years ago to look over someones shoulder as we tried to work out a way to power up my kids "new" 1900s house which hadn't been supplied for 7 years and the old meter had disappeared. How messy that was, took near on 2 months to get power. Kids didn't have an account with a retailer so couldn't get a meter put on and didn't have a meter so couldn't get a retailer. Apparently there was at least one other person in Adelaide stuck in the same boat at the same time.

For another great anecdote, I know about 12 months ago one particular retailer went around to various customers and "upgraded" the meters. Only thing was the upgraded meters (for some reason, software compatibility I think) couldn't be used by some of the other retailers, so when any "upgraded" customers wanted to change over to a new retailer they got a "sorry, we cant accept you as a new customer because we are unable to use that type of meter". That caused a little fuss.
They tried my place, but couldn't de-energise the meter. Nice one, I got home and wondered why the clocks were flashing. Then asked around and found out what they were up to!

Regards
SWK

In NSW, at least, the meters are owned by the distributor, Endeavour, Ausgrid, Essential. You were close SWK, each meter has a NMI number. National Meter Identifier. You can't have imcompatability issues because the meters are issued by the distributor after filling out many, many forms and the customer opening an account with a retailer.

Originally Posted by NCArcher

...You can't have imcompatability issues because the meters are issued by the distributor after filling out many, many forms and the customer opening an account with a retailer.

I spoke to the guy in SAPN who was very familiar with meters and processes (knew him due to previous experience with the kids house). "Type 8" meter fires some neurons, but I am probably wrong. If it was the software of their competitors not capable at that time or something more fundamental I dont know. When I arrived home on the day I found a letter from the retailer (AGL) basically saying, we couldn't upgrade your meter today because we couldnt de-energise the meter. They had switched off the main switch (hence the flashing clocks) and when they tried to go further my service comes from a pit they couldn't get access into. That's why I am pretty sure it wasn't SA Power Network people, because it is their pit and I got the story from the SAPN man. It was all pretty low key, I think they might have got their fingers slapped. I still have the original meter and no one has subsequently suggested upgrading it.

Here's a comment on the AGL website which I just found looks like BWSS had a similar issue (also about 1 year ago) and got an old meter re-installed.

"SA must be different somehow, when I checked with Origin and other big retailers I got the same blank reply, they said cannot read the AGL meter on line, I had the same problem with Simply Energy so had to dump the AGL meter, get SAPN here to install their very standard meter which is manually read, every quarter, not the best but the only solution. Originally I did ask the others if they could read, they said yes, hoping for our business but when I quizzed them in depth and asked for them to acknowledge in writing thay could read the AGL meter on line, all retracted, sometimes it's the question(s) you ask to get the correct answer..."

Regards
SWK

Sorry, still having trouble typing....
image.jpg

....and voice-to-text has no idea what to do with DUOS and TUOS! There is some really good current input to this thread so I'll just make a few additional comments.
In an earlier post, Chis was talking about having to pay the network a fee (or toll) to use the network and that was relating to having solar panels on 1 premises to feed another. Well that is what already happens. The network poles and wires owner gets paid a fee for electricity that passes through their network. In fence furniture's case that means that endeavour gets paid the DUOS fee and, if the voltage is high enough and is connected to Transgrids network, then they would get paid the TUOS.
In WP's post, it's not really 4 new entities instead of 1 and each one making a profit (gouging?) at the users expense at each step. There always were the 4 entities but they were usually departments within 1 company/utility and a single profit made from the beginning to the end. Where the real cost, and hence price risk is now, is that there is arbitrage and hedging between each of the functions and hence there is now some sort of financial institution at each boundary point.... and they don't operate for the benefit of customers, they operate for the benefit of their stakeholders!
The generator makes a stand alone profit, the poles and wires owner gets paid a Government decreed toll (DUOS and TUOS), the wholesaler makes a profit but adds a margin to cover risk (='hedging) the retailer makes a stand alone profit but likewise a margin to cover risk ( = hedging) so the NEW profit takers are the financial institutions at each boundary point.
At one point it was proposed that there should be a GENTAILER which was a generator who was also a retailer and this should have removed the risk and cost of a boundary point. However this raised all sorts of legal issues re third line forcing, insider trading etc so was quietly dropped. I made a comment at the time which was technically incorrect that GENTAILER was only 1 letter different from "GENITALIA" !
Let me take the opportunity now to write (slowly!) about the project in Sweden that could be the future model that overcomes so many of the issues raised in this ( hijacked?) thread.
The project relates to a residential and commercial rejuvenation of an area of prime potential CBD land that had been a Dockland/warehouse area ...... just like Sydney and Melbourne have done in recent years ..... and could have been done so much better.
The new development will be 'islanded' in that it's electricity network will not be connected to it's next door national grid nor to the combined European grid. In other words, unlike Denmark, IF the wind stops blowing they can't just flick the big switch and connect to the combined European grid. It is (as far as my knowledge is current) powered by dedicated wind farms out in the sea and supported by storage at the development itself. Residents can only have plug-in electric vehicles and they are allowed to have 2 per apartment. 1 vehicle is an 'A vehicle' and the other is, yes, you guessed it, a 'B vehicle'. The residents are guaranteed that the A vehicle will always be charged overnight BUT, if there is a power shortage, the B vehicle may actually be used to supply power to the development and hence not be charged ready for use the next day. All apartments are on a 'smart grid' with all of the goodies that you would expect. Solar generation from virtually all surfaces that are between 0 and 50 degrees to horizontal. Appliances that are turned on remotely by the resident or network operator depending on load, rooms that have sensors to turn off lighting and heating if not occupied, high tech insulation, automated blinds that allow solar inertia (which is fancy words for letting the sunshine in!), cruise ships that dock at the development can have their generators turned on remotely BY THE NETWORK OPERATOR to provide power if the development needs it etc etc. As I noted earlier, they was no new technology developed for this project. Other than some linking software, it already existed. What had to be developed however, was the human engineering to make the development liveable and desirable.
Re some of the comments about retailers. The margin on many (particularly) residential customers is so low that the cost of raising 6 2-monthly bills and receiving and handling 6 payments consumed all of the margin and hence the move to quarterly bills and payment, and 'rewards' for paying by EFT and ON-TIME.
I did a presentation about 10 years ago now, and before the retail function of the utilities was sold off, that the best organisations to become retailers were those organisations that already had our wallets and purses open. The example I quoted was Coles, Woolworths and Bunnings. Can you imagine going grocery shopping on Thursday night, the check-out person has added your grocery bill and then says, "oh, and your current electricity bill is $83, would you like to pay some off that now and receive fly-by points?". I note that this is now happening in Europe.
Hand hurting, haven't proof read but taking a break.
fletty

I thought transmission and distribution companies got paid based on the cost of their assets. Incentive to gold plate and use money to add extra gold so next year brings more money.
There was talk of changing rules so may not be the case.

The other point is everyone expects their energy to be there 100% of the time. This requires the gold plating and lots of redundancy. If we could live with lower expectations on availability, it wold save lots of $$

[/QUOTE]In an earlier post, Chis was talking about having to pay the network a fee (or toll) to use the network and that was relating to having solar panels on 1 premises to feed another. Well that is what already happens. The network poles and wires owner gets paid a fee for electricity that passes through their network. In fence furniture's case that means that endeavour gets paid the DUOS fee and, if the voltage is high enough and is connected to Transgrids network, then they would get paid the TUOS.[/QUOTE]

Alan, that is not quite what I had in mind though you most probably realise that. I should be free to set a price delivered from my premises to another at an agreed figure and pay the carrier a fee to move that amount of energy over his poles and wires, not tied to a wholesale figure that in reality is what the FIT is now. I can see in the future that if a peak is approaching and extra power is needed it is conceivable that the owner of a solar system receives a message asking if they want to feed extra power in at a stated spot price by switching off all the heavy use appliances they are running at the time.

Originally Posted by Pete57

I thought transmission and distribution companies got paid based on the cost of their assets. Incentive to gold plate and use money to add extra gold so next year brings more money.
There was talk of changing rules so may not be the case.

The other point is everyone expects their energy to be there 100% of the time. This requires the gold plating and lots of redundancy. If we could live with lower expectations on availability, it wold save lots of $$

It's a very popular misinterpretation of the rules and i first became aware of it as a political issue under the Gillard government when I think the "gold plated" comment also first became a political catch cry.
The reality is somewhat more complicated. Firstly, back then, the utilities got PAID nothing. The income received by the utility was as THE retailer with the price being set by IPART after the utility had presented to IPART a program of the work that needed to be done in the following 5 years. This program was to grow the network to match forecast population growth and expected usage, PLUS maintain what was already there? From the retail income, the utility was entitled to KEEP a portion of that money equal to a percentage of the total value of the assets. I remember numbers like 4.8%. From this percentage, the utility was expected to operate, maintain and eventually REPLACE that asset. The remaining income, ie 95.2%, was handed to the owner who was then the relevant State Government.
If you think of it as a return on investment, a business that returns 4.8% is not a business that YOU would invest in?
It is easy to see how those facts could be easily misconstrued to suit any political purpose.
The result of this was that, from the mid 1990's, Australia's networks were in a very poor state with, for example, the average age of power transformers being greater than 50 years even though 25 years was internationally regarded as being a practical life span. Ironically, what saved us was our population growth which resulted in many such transformers needing to be upgraded to a higher capacity so a newer, larger transformer was substituted and the tired, smaller one being moved further out in the network to continue working in a 'quieter' location!
One (in)famous example of this was a network manager being rung to be told that there was a transformer in a certain location with a Nazi swastika on it. Said network manager, thinking that it was particularly malevolent graffiti, told the crew to "paint it out IMMEDIATELY". "We can't" they replied, "it's made of steel"!
The transformer, still in service in a quiet location, had been made in Austria in 1938!
The industry is regularly demonised and, when it was almost exclusively Government owned, it would remain quiet and accept it. In the brave new World with the retail industry now being totally privately owned and the poles and wires businesses going the same way, I don't think that the industry will remain quiet when unjustly criticised in the future?

Even within the power industry we may only hear part of the story. We become familiar with our own little sector, but that is all.

What occurs to me is that for about ten out of thirteen years the generators made very little or no profit, clearly from Fletty's comments the retailers have worked on small margins and Brett as our consumer representative is screaming because he has burnt off one ear and developed laryngitis wrestling a better price for his domestic consumption. I made an earlier comment (I think it was in this thread) that for business to succeed there has to be something in it for everybody.

I would comment that the mantra trotted out regarding private enterprise and competition being good for the market could be discussed at great length. It seems to be that continuity of supply has been substituted for price, which was well known back in the late nineties when the competitive market first emerged. The governments of the day wriggled free of any responsibility and when something crashes they cast blame around at all and sundry. They forget it was their decision to go down this track in the first place.

One thing the governments did not want to do was find money for new power stations and replacement infrastructure (transmission lines, transformers, switchyards etc). They handed this to private enterprise. Now with dwindling profits and a volatile market they are finding it difficult to attract new investors into the energy market. Nobody wants to build a coal fired power station (except Malcolm Turnbull) quite understandably. Gas fired units, which of course are not clean, just less dirty can no longer access cheap fuel as it can be sold overseas for more money. What company is going to say you can have this at a cheap price because you are good blokes? No multinational for certain. Renewables want some degree of certainty before they make a commitment, particularly with all the sceptics around.

The end user ends up coping the fallout.

Careful what you wish for.

Regards
Paul

Originally Posted by fletty

Said network manager, thinking that it was particularly malevolent graffiti, told the crew to "paint it out IMMEDIATELY". "We can't" they replied, "it's made of steel"!
The transformer, still in service in a quiet location, had been made in Austria in 1938!

Originally Posted by fletty

The industry is regularly demonised and, when it was almost exclusively Government owned, it would remain quiet and accept it.

Perhaps you notice the demonising more, being from within, but I've only noticed happening fairly recently.

Originally Posted by fletty

In the brave new World with the retail industry now being totally privately owned and the poles and wires businesses going the same way, I don't think that the industry will remain quiet when unjustly criticised in the future?

All the more reason to put one's best foot forward, play smart, play fair, without BS, and most certainly without the crap they've put me through. If they had been fair and alerted me that I could get better discounts W.T.F am I saying, GIVEN ME A GOOD DISCOUNT WITHOUT ASKING then the whole whole sorry sodding episode wouldn't have occurred. That discount would have been less than the 32% that AGL ended up being beaten into, after spending $120-150. They blew some dough needlessly (rinse & repeat until the shareholders revolt)! Very poor management indeed - they have actually spent money to lose money, where most good business practice is spend it to make it.


So I bet you now regret retiring when things are just getting interesting (in the Chinese sense).

Originally Posted by Bushmiller

clearly from Fletty's comments the retailers have worked on small margins and Brett as our consumer representative is screaming because he has burnt off one ear and developed laryngitis wrestling a better price for his domestic consumption. I made an earlier comment (I think it was in this thread) that for business to succeed there has to be something in it for everybody.

Yes, and the stupid thing is, as per my last reply, if they'd done the right thing in the first place they'd still have me as a customer with a smaller discount. But hey, if they're going to offer it.......

Originally Posted by Bushmiller

Nobody wants to build a coal fired power station (except Malcolm Turnbull)

BOLLOCKS! Abbott would build ten tomorrow - they don't affect anything in a negative way remember, AND they eventually saves lives through fewer cold snaps.

Quick question Fletty (if your hand can stand it)

Originally Posted by fletty

...Firstly, back then, the utilities got PAID nothing. The income received by the utility was as THE retailer with the price being set by IPART after the utility had presented to IPART a program of the work that needed to be done in the following 5 years. This program was to grow the network to match forecast population growth and expected usage, PLUS maintain what was already there? From the retail income, the utility was entitled to KEEP a portion of that money equal to a percentage of the total value of the assets. I remember numbers like 4.8%. From this percentage, the utility was expected to operate, maintain and eventually REPLACE that asset. The remaining income, ie 95.2%, was handed to the owner who was then the relevant State Government.

Roughly what period are you talking about? If pre-privatisation, SA was similar but not the same. There must have been some government body setting the price (but I dont remember how). The old ETSA used to give a dividend to the state government, but my memory tells me it was of the same order of magnitude as the payroll tax ETSA paid. The bulk of the old ETSA earnings went back into infrastructure. Power stations mostly. It was only after the mid/late 1980s when ETSA basically pulled the pin on new power station planning that the state government started pulling out more money (my memory tells me round about 1990 the dividend was $100M, which was significantly higher than it had previously been)

Originally Posted by fletty

If you think of it as a return on investment, a business that returns 4.8% is not a business that YOU would invest in?

Well, that would depend on the riskand if I wanted my money safe out of another country .

Originally Posted by fletty

It is easy to see how those facts could be easily misconstrued to suit any political purpose.
The result of this was that, from the mid 1990's, Australia's networks were in a very poor state with, for example, the average age of power transformers being greater than 50 years even though 25 years was internationally regarded as being a practical life span. Ironically, what saved us was our population growth which resulted in many such transformers needing to be upgraded to a higher capacity so a newer, larger transformer was substituted and the tired, smaller one being moved further out in the network to continue working in a 'quieter' location!
One (in)famous example of this was a network manager being rung to be told that there was a transformer in a certain location with a Nazi swastika on it. Said network manager, thinking that it was particularly malevolent graffiti, told the crew to "paint it out IMMEDIATELY". "We can't" they replied, "it's made of steel"!
The transformer, still in service in a quiet location, had been made in Austria in 1938!

Sounds like NSW was much worse than SA. Most of our infrastructure was newish in 1970, which makes a good deal of it 50 yo now, but was only 20-30 at privatisation. (yes there was some real old stuff, but not lots of it. We just upgraded a CBD site which was originally built in 1930s, when there was a private electrical system in Adelaide. However, it had already been upgraded once in the 50s)

Reckon your transformer was Swedish. ASEA used a swastika from about 1890 to 1933 (which means it was even an older tranny than you remember)

Originally Posted by fletty

The industry is regularly demonised and, when it was almost exclusively Government owned, it would remain quiet and accept it. In the brave new World with the retail industry now being totally privately owned and the poles and wires businesses going the same way, I don't think that the industry will remain quiet when unjustly criticised in the future?

Actually in SA I don't think the old ETSA was really held in low regard. No one remembers the statewide blackout of 1980 now. Nor the continuous suburb tripping that happened during the commissioning of Northern Power Station. The complaints really only started leading up to then after privatisation.

Regards
SWK