Can AGL please show me the maths behind the latest price increases in SA?

[ChristianL]

Hello AGL

First off, my apologies if this has been posted in the forums thus far.  I've done some searching and not been able to locate anything relevant to this, apart from a heck of a lot of disgruntled customers.

The AER advised South Australian customers that they would be facing a 22.5% increase in their power charges (for controlled load) come 1st July, as per the determination that they handed down earlier this year. (https://www.aer.gov.au/.../aer-releases-final...).

My AGL power price went from 30.89c/kwh (ex-GST, controlled load, AGL value saver plan pre 1/7/23) to 41.25 c/kwh (ex-GST, controlled load, AGL value saver plan post 1/7/23), an increase of 33.5%.

And 33.5% is greater than 22.5%.

I respectfully request to be advised as to why AGL has taken it upon themselves to increase prices beyond the determination amount.

Is there some maths that explains this and show? that AGL has adhered to the AER determinations?

Please do not refer me to your plans page to look for a good deal, or suggest that I shop around. I want to see the numbers and calculations used for the modelling that shows that these price rises are within the AER determination for residential consumer use.

Show me the numbers please!

I'm the person quoted in the ABC article (https://www.abc.net.au/.../power-prices-to-rise.../102512070) and would really like to understand the mathematics behind this decision.

And can I also suggest that it is very poor form to announce a near doubling of expected profits off the back of increased power prices, especially in light of falling wholesale power prices that have been factored into AGL profits over the coming year (https://www.abc.net.au/.../claims-power-price.../102626180) that consumers are waiting to have passed on to ourselves?

Thankyou.

Christian Legg

AGL Customer (ex-PowerDirect)

[-Olgi-]

Hi Christian,

Welcome to AGL Neighbourhood! 

Energy pricing is based on network costs, wholesale market costs. retailers costs and Government and regulatory costs. AGL has direct and indirect costs in arranging the supply of wholesale energy and network services, complying with regulation and in providing customer service. There are also a number of federal and state government schemes that can add costs. This may include renewable energy targets and energy efficiency schemes. These costs are calculated into our energy rates, meaning  that your rates increases may be higher than what is announced by AER. 

Our Value Saver plans were always lower than Reference Price. We also regularly release new plans and offers, hence why we recommend that you check what our current offers are, as we may be able to bring your rates down from what you're currently charged. If you're needing help with this, please let us know.

Thanks,

-Olgi-

[NeilC]

@ChristianL 

Residential Value Saver (standard) - No Exit Fee (Post Code 5112)

This is the current rate for what I believe is your plan.

GST	No Gst	Your Old Rate	Change
$  102.2600	$  92.9636
$      0.4391	$    0.3992	$  0.3039	131.35%
$      0.2133	$    0.1939

You can see that your change was 31.35% ( or really 131.35% as .3039 * 131.35% = $0.3992)

If this is not current rate you should go online and change it (just saved you 2.15%)

Now your price (as stated by you) did not go up by 33.5% it went up by 1.33538361929427 or 133.5%.

If it only went up by 33.5%  the your new price would be 30.89 * 33.5%= 10.85 cents.

In SA my council rates for this Financial year (22/23) went up from $2075.92 to $2313.57 (23/24) an increase of 111% yet the house value went from $395,000 to $455,000 an increase of 115% everyone is complaining about the rates but no-one is complaining about the new value of their home.

Any way keep us up to date on how you go, especially about reducing your energy consumption. etc.

By the way rates for two other companies serving SA (both have higher rates)

Energy Au	Origin
GST	GST
$      104.50	$    1.0867
$      0.4728	$    0.4689	First 10.9589 Kw then $0.5060 for each day
$      0.2288	$    0.2252

[ChristianL]

Thanks Neil - I did contact AGL and got that better rate, so my increase has only been 31.5%.

(though I should add that AGL's original offer saw me being reverted form my AGL savers plan to the default rate, which was 45% or more than I was paying... then they gave me the improved fate I based my original questionon, then when I called them again I got the rate you mentioned.  I did fire off a broadside about that - it should NOT be this difficult 🙂

The question remains though - the regulator said SA power prices for controlled load would go up by 23% or so, yet AGL have increased my prices by 31.5%

So I suppose the questions that I have are:

1 - Is the energy regulator price increase just a guideline that is not binding upon power companies?  I would have thought that words like "regulator" and "price determination" are legally binding!

2 - If the regulator announcements are legally binding, ow can AGL justify increasing my bills beyond that determined by the regulator?

Of course, is #1 is just a guideline then I'll probably kick up a stink with the regulator themselves, who make statements about bill increases that do not reflect reality!

[NeilC]

@ChristianL 

You have neglected the  fact that AGL is also a collector for your supplier, the tax office and maybe more than that.

In case you don't know how to do it to get the PRICE LESS GST  divide the cost by 11 and subtract from the amount

($110 / 11 = $10 ) then  $110 -$10 = $100

If an item costs $110 (inc GST) then I simply muliply it by .9090909,  which will give you the answer $100

Or you can do 110*(1/11) = 100

$100 without GST is ($100 * 10% ) + $100 which is $110 ( I simply use $100* 1.1 = $110

In April I went through 4 price changes from my last dated 10 Oct 22, changed 29th April 23, changed 26th June (after I complained) then the last on the 1st July and my billing period finished on the 6th July.

I had to revamp my Elect Used spread sheet to use a lookup table to calculate prices daily to calculate what my bill will be now.

I have controlled load but do not use it a I use my heat pump set to run in shoulder hours to save having to buy any Controlled Load,l $0 verses $0.3229 (CTRL o/peak) just sacrifice some Generated Solar.

You must also remember that AGL wants us to pay Higher Prices because they OWN the Power Station at Torren's Island and until the new interlink from NSW is constructed our prices will continue to be higher.

With out having Torrens Island we will be subjected to the VIC link (although dual) being able to take up the base load when needed.

As we all know from the black out where 5 towers where blown down that it some time to re-establish power.

SA power networks and AGL did a great job getting us back on line.

SAPN had to isolate the interlink back to the VIC border to Torrens Island, then once the station could see the power from Vic then synchronise the power in the station.

Once that had occurred they could then start increasing the load at AGL Torrens Island until they were fully supporting SA again.

When taken into consideration it was a VERY QUICK response from them although sections to the west of the downed lines took some time the MAJORITY of the State was quickly returned.

A lesson that all states took notice of. If the same thing occurred in Vic it would have taken considerably more time as every station would have gone off line.