Peak pricing could be packaged into mobile phone-style plans

An energy pricing research pilot will allow Horizon Power customers to reduce their energy bills by earning credit if they use power off peak.

Participants will earn the credit by keeping their use to a target set by Horizon Power.

The Power Ahead research pilot will be used to shape a new on-peak/off-peak pricing product, which would allow customers to choose a plan to meet their electricity needs in much the same way as they choose a mobile phone plan to meet their download requirement.

Under these plans, customers would pay a weekly amount based on their selected plan and a charge for each unit of electricity used.

Currently, the unit charge every West Australian resident pays for electricity is 26.47 cents, but under the proposed plans it could be as low as 8 cents per unit all day, every day.

The average customer would pay the same as they currently pay throughout a 12 month period, but would have the choice to switch to lower cost plans by changing their energy use or investing in technologies such as solar and battery storage technology.

Participants in Power Ahead research pilot will be challenged to keep their electricity use within a set unit allowance during the peak and have the opportunity to earn a bill credit of between $300 and $1100 (residents)/$3200 (businesses) if they meet the challenge.

A smart phone app will provide near real time usage data and tips to help participants stay on track. For example, customers with PV will be notified on days when it’s hot and cloudy to monitor their usage during the peak as they may draw more power from the grid. Customers who look like exceeding the allowance will be provided with personalised information about which appliances to adjust or turn off to reduce their demand.

Horizon Power managing director Frank Tudor said the new pricing model would offer benefits to both customers and the company.

“We believe that the research pilot will help us develop a pricing model that will give customers more control and at the same time help us better manage our costs,” he said.

The results of the trial will inform Government policy on tariffs.