Thursday, 01 September 2011 11:32
JUST when you thought your electricity bill had gone up far enough, gas prices too have increased. This increase would have been somewhat easier to swallow at around four per cent, were it not for AGL changing their pricing structure for its retail customers.
AGL has decided that it’s more than reasonable to charge low consumption at a much higher rate than any of the higher consumption tiers.
They’ve increased the charge for the first 41.096 megajoules (MJ) per day by a staggering 41% while reducing the daily service charge by 17%.
Below is a breakdown of the old and new prices which took effect on 5 August.
AGL Gas Prices effective 5 August 2011
Gas usage
Old charges
New charges
First 41.096 MJ/day
1.9492 c/MJ
2.7401 c/MJ
Next 49.315 MJ/day
1.8667 c/MJ
1.6489 c/MJ
Next 189.041 MJ/day
1.8040 c/MJ
1.6258 c/MJ
Next 2,465.753 MJ/day
1.7479 c/MJ
1.6115 c/MJ
Next 10,964.384 MJ/day
1.7380 c/MJ
1.5224 c/MJ
Remaining balance
1.7325 c/MJ
1.3772 c/MJ
Service charge
57.409 c/day
47.498 c/day
An increase of less than one cent doesn’t sound like much, but it very quickly adds up. A household using 15,000MJ a year will now be paying nearly over $15 more on their quarterly bill, an increase of 12%. This level of consumption is below the average of 23,000MJ per household, according to IPART, and is the sort of level many single and couple resident households would use.
The consequences of this, of course, are that those who can least afford it – pensioners and other low-income earners – are being punished for consuming less energy than other households and put in even greater financial difficulty.
The price change also doesn’t make any sense from an environmental or efficiency perspective. By jacking up the price at the lower end, it rewards those who can afford to use more or waste energy.
What’s worse is that despite there being an energy price regulator, the Independent Pricing and Regulatory Tribunal (IPART), nothing can prevent AGL from making such a price structure change.
IPART regulates standard gas prices and by how much they can increase, but cannot regulate how retailers charge their customers.
So AGL is free to pump up the charge for initial consumption, which everyone has to pay, and reduce the charges for the rates that barely anyone uses.
CPSA has sought for IPART to be given the powers to regulate such pricing structure changes, but it’s thus far fallen on deaf ears. This would allow groups such as CPSA to put forward a case where prices are fairer to households that do not use much energy and are on low incomes.
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