Do Not Call Register

The newspaper today published an article in regards to the legislation introduced to the parliament on the "Do Not Call" register. This means that any one who do want to receive certain unsolicited telemarketing calls can register their Australian fixed or mobile phones on the Do Not Call register for up to 3 years. Companies that breach the register provisions may be fined.

This legislation will be interesting and a challenge to many businesses(whether in the utilities industry or telecommunications) out there who depend on telemarketing for a large portion of their sales.

The utilities industry specifically the retailers depend on telemarketing sales quite heavily especially for the residential market. If a large portion of residentials sign up to the Do Not Call register, retailers may have to come up with different and innovative sales and marketing strategies that excludes cold calling. That would also mean less businesses for outsourced call centers and channels.

Of course, the other way to get around the Do Not Call register is if an individual call up the retailer instead. In order to do that, the retailer would have to creating awareness of its products through advertising, word-of-mouth (a very strong and important method of advertising that is often over-looked), door knocking, direct marketing and even cross selling with other products. This may actually create a whole new stream of utilities retail marketing strategies which can be difficult for a product (gas and electricity) that is essential but has no differentiation between competitors.

For more information, click here
For media press, click here

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Jargon lesson 2: Peak & Off Peak Part II

The time switch in New South Wales has an extra component called “shoulder”. So far only one distribution region in Victoria has a shoulder component and that is applicable on certain medium to large tariffs in SP Ausnet area.

Your time period for each of the peak, off peak and shoulder energy differ depending on who is your distributor or local network service provider (LNSP). If your local distributor is:

Energy Australia
Peak Period : 2pm to 8pm on weekdays excluding public holidays
Shoulder Period : 7am to 2pm and 8pm to 10pm on working weekdays
7am to 10pm on weekends and public holidays
Off Peak Period : All other times

Country Energy
Peak Period : 7am to 9pm and 5pm to 8 pm on weekdays excluding public holidays
Shoulder Period : 9am to 5pm and 8pm to 10pm on weekdays excluding public holidays
Off Peak Period : All other times

Integral
Peak Period : 1pm to 8pm on weekdays excluding public holidays
Shoulder Period : 7am to 1pm and 8pm to 10pm on working weekdays
7am to 10pm on weekends and public holidays
Off Peak Period : All other times

Next...gas.....

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Jargon lesson 2: Peak & Off Peak Part I

Your electricity bill may be charged at a single rate for all energy usage or split into peak and off peak rates. Each state has slightly different timing in terms of the peak usage. So how is your peak usage been calculated? As peak rate is more expensive, it can be handy to know when peak rate is applicable as this may help you to save money on your electricity bill by switching or changing your electricity usage from peak period to off peak period. For example, you may want to switch on your washer and dryer from 11pm onwards or use it over the weekend so your electricity consumption is charged at the lower off peak rate...

Electricity

All time usage measures electricity consumption 24 hours 7 days all year long. If you have permanent storage electricity water heater or space heating with a separate meter or time switch, then you may be charged anytime rate for your general lighting with off peak for your hot water and/or space heating. Of course, with the electricity water heater or space heating, you may also be charged at peak and off peak rates instead of all time usage with off peak depending on your meter type.

Victoria

For residential customers with peak and off peak rates, peak applies from 7am to 11pm (Eastern Standard Time) Monday to Friday and off peak applies all other times including all day Saturday and Sunday.

For commercial customers, you may also be charged a single all time usage rate or peak and off peak rates. There are 2 types of peak and off peak rates for commercial users. The peak period for the first type applies from 7am to 11pm (EST) Monday to Friday (5-day peak) and off peak applies to all other times. The second type of peak rate applies from 7am to 11pm (EST) Monday to Sunday (7-day peak) and off peak applies from 11pm to 7am (EST) everyday.

South Australia

Peak rate is charged for electricity consumed on business days between 7am to 9pm (Central
Standard Time). However, if your metering does not recognize or record specific days, then the peak rate applies from 7am to 9pm (CST) everyday. Off peak rate is charged to energy usage at all other times.

I will continue with New South Wales and gas in my next blog...

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Jargon lesson 1: NMI & MIRN

I was thinking since I have already mentioned about what to look for when you shop around for energy retailers, it may handy to know some of the jargons that the sales reps may use such as NMI and MIRN.

NMI - National Metering Identifier

NMI or the National Metering Identifier is a unique identifier that identifies your supply or connection point and is assigned by your local distributor. Your NMI should be printed on your electricity bill as regulated by the Energy Retail Code. NMI has 10-digit numeric characters although alphanumeric NMIs are still in use. Your bill normally shows your NMI with 11 characters. The last character or the 11th character is the checksum of the NMI.

Currently, you can still identify the jurisdiction of your NMI based on the first character.
· Victoria – starts with 6 or V
· South Australia – starts with 2 or S
· NSW – starts with 4 or N
· Tas – starts with 8 or T
· Queensland – starts with Q

And if you are in Victoria, you can tell who your distributor is by your first 2 characters:
· AGL – starts with ‘60’ or ‘VD’
· Citipower – starts with ‘61’ or ‘VA’
· Powercor – starts with ‘62’ or ‘VC’
· SP Ausnet – starts with ‘63’ or ‘VB’
· United Energy – starts with ‘64’ or ‘VE’

MIRN

MIRN or Metering Installation Registration Number like your electricity NMI is a unique identifier that identifies your gas supply or connection point and is assigned by local distributor. MIRN has a reserved first character which means MIRN starts with ‘5’.

I will think of more jargons but in the meantime if you would like to know any of them, just let me know...

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Things you should know when shopping for energy retailer...

If you are looking into switching your electricity or gas retailer, below are some factors that you may want to look out for. If you are a large energy user (such as a manufacturing plant or factory), the offers that you receive may be more complicated than that of a residential or small business (such as a printing firm or small cafes). I have come across many businesses who do not understand the offers or understand the implication of the offers to their electricity or gas expenses. The most important aspect before entering into a contract (especially for a long-term) is you must understand the offer and if you have any doubts, do not hesitate to ask the retailer.

1. The rates for your energy usage

The electricity rates are usually quoted in $ or cents per kilowatt hour (kWh) and the gas rates are usually quoted in $ or cents per megajoules (MJ). This is usually quoted pre-GST.

For electricity, you may be quoted an anytime rate (all time usage 24 hours 7 days a week) or rates with peak and off peak components depending on your underlying meter type. The rates quoted in cents per kWh are charges for your actual consumption of electricity.

2. Service to property charge or supply charge

This is a fixed charge usually quoted as $ per day or $ per year charge. This is the charge for the distributor standing charges, metering charges and retail service fee.

3. Any other additional charges

Did the retailer quote you any other charges in addition to the energy rates and the service to property charge? If they do, remember to enquire the reasons for the additional charges.

4. The service of the retailer

- Do you like the service of the retailer of your choice?
- Did they resolve or reply any queries that you have in a timely and professional manner?
- Do the sales persons have a clue to what they are talking about?

Service can also be important especially if you are trying to resolve an issue with the retailer. You would want a retailer that can resolves the issue in a friendly, professional and timely manner.

Seriously for a small user like myself (spends less than $200 every quarter), I wouldn't mind paying a little bit more to have good customer service. As a small user, difference in rates may mean a small discount in the range of $10 to $50 per year so I probably wouldn't mind sacrificing that rather than suffer heartache and frustration later on or even before I join them (read my previous blog on my experience when I was shopping around).

5. Billing cycle

Normally residential and some small businesses are billed quarterly (for electricity) or bi-monthly (for gas) as the distributors try to read the meters every 2 or 3 months. However, there are retailers who may bill you on estimates every month and adjust the bill once the readings for your actual reads come through. If you like to be billed on actual reads only, remember to inform your retailer.

6. Term or length of contract

What is the term of the contract? Do you have to sign up for a 3 to 5 years contract to receive the energy offer?

Remember, you can negotiate the term of the contract with your retailer if you do not wish to be locked in a contract for a period longer than what they have offered. This is important as breaking the contract before the term may incur a termination fee.

7. Termination Fees

This is a very important component that many people tend to overlook when signing up a contract. As you are most likely to be entering into a contract with the retailer of your choice, some contracts may come with a termination fee if you do not stay with them till the end of the agreed term. Termination fees can vary and for larger businesses, it can be a very costly expense to the business. Some retailers charge up to 1 to 2 months of your average electricity bill depending on the offer or product that you have been offered. This termination may come up to thousands of dollars if you are a large user of electricity or gas.

8. Any other discounts or credits

Sometimes retailers may have a promotion such as a once-off rebate for direct debit, a once-off welcome credits, a yearly loyalty credits, prompt payment discount and other giveaways.

Prompt payment discount is a good savings only if you always pay your bill on time or paying through direct debit.

If you are a small user of electricity or gas (average spend of less than $250 per quarter), then sometimes an offer of 10% of your rates may be less attractive than a $100 credit off your bill. So remember to work the numbers out first before you sign up with any retailer.

Happy Shopping!

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My experience as an electricity consumer

I was shopping around for electricity retailer the other day for my new home (yes I know, I work for a retailer but I would still like the best deal on the market) and was disappointed in the way a residential customer is being treated by the retailers. Most of the electricity retailers doesn’t even bother to offer me their products which are widely advertised on their websites but just quoted me the Government Regulated Tariffs which I would be on anyway whether I switch or not. Very disappointed.

The customer service was also sub-standard. It does make me think how lucky I am to know the sales representatives whom I had build close relationship with in the company and how friendly and professional they are compared to most of the retailers out there. Anyway I did end up signing with the retailer I work with because they offer the best discount around the market.

But this experience really makes me realize how hard it was to shop around for an electricity retailer especially if the retailers assume I have not switch to any retailers yet. I don’t feel like I have been given a good offer. If I was not familiar with the rates or the industry, they would have ripped me off by offering me the maximum price. I wonder how many others that feel this way?

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What happens if you have not switch electricity or gas retailers?

You have the freedom to choose your electricity and gas retailer of your choice, the same as you choose your phone provider. You do not have to switch retailer if you do not want to. If you have not switch or do not intent to switch, your electricity and gas will still be supplied by your local host retailers depending on your location.

Even if you have switch electricity or gas retailers, the quality and reliability of your electricity and gas supplies do not change as these are controlled and determined by your local distributors who own the poles and wires in your area. Therefore if you encounter any problems with your electricity or gas supplies, just ring your local distributor. There are 5 distributors in Victoria - Powercor (around the West), AGL (around the North), Citipower (around City), Alinta (around East/South) and SP Ausnet (outer South/East).

If you have not switch retailers, then you are probably still on a deemed or standing contract. The prices that you pay are determined between the government and local retailers. This is reviewed and published every year. The prices are commonly known as the Government Regulated Tariffs (GRT) and are the maximum prices that the retailers can supply you on. Once you have switch electricity or gas retailers, then you are on market rates.

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Introducing the electricity industry

Prior to 1990, the electricity supply industry was originally dominated by state governments responsible for generation, transmission and distribution of electricity. Since then the industry have been widely privatized and the National Electricity Market (NEM) was formed in 1998 with the aim to promote competition and efficiency in the electricity industry in the interest of electricity consumers. Participating jurisdictions include Queensland, New South Wales, Victoria, South Australia, Australian Capital Territory and Tasmania.

The deregulation of the electricity industry results in competition by introducing Full Retail Contestability (FRC) to allow businesses and households to choose the retailer of their choice.

Victoria – introduced on 13 January 2002
NSW – introduced on 1 January 2002
South Australia – introduced on 1 January 2003
ACT – introduced on 1 July 2003
Queensland – to be introduced in mid-2007
Tasmania – contestability for large customer in mid-2006

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