Tariff Changes and COVID-19

By Simon Martin, Energy Advisory Leader
 

The COVID-19 pandemic and subsequent restrictions around social distancing and movement continue to affect us in ways which we could not have previously imagined. One such example is the effect the hibernation of many council-owned facilities such as swimming pools, libraries, sports grounds and even some airports has on energy consumption, tariffs and billing. 

There are currently two issues to unpack here. The first issue is around the fact that these facilities have such low energy demand that they may be operating on a tariff that is now unsuitable in terms of providing maximum savings for the limited amount of energy being consumed.  

Should we change tariff for these sites now, based on current low usage? The answer unfortunately is not that straightforward. If we change the tariff now to suit low usage, and the facilities are brought out of hibernation sooner rather than later due to Queensland successfully “flattening the COVID-19 curve” we may then need to change it back almost immediately.  

An additional complication lies in that Energy Queensland would need to waive the business rules requiring that there can only be one tariff change per 12-month period. A ramification of the current rule is that sites which had network/retail tariff changes within the last 12 months would not be allowed to change and hence would be disadvantaged.    

The second issue is around the process of changing tariffs itself. Historically tariff assignments/changes are based on the previous 12 months kWh consumption and in some cases the maximum kW demand data. For facilities currently in a state of hibernation, these figures are not representative of “normal” operation. One solution could be that tariff changes should be based on forward projected kWh consumption / maximum kW demand rather than the historic usage from the previous 12 months. 

Peak are currently engaged with Energy Queensland on behalf of councils across Queensland to ensure that these issues receive the importance they deserve, so that clear direction can be sought to ultimately provide benefit to councils now and in the future.