Monday, January 06, 2014

Red Energy increased electricity rate used in Energy Cost Calculator.

Each year I update the Energy Cost Calculator with the latest electricity price from Red Energy. I no longer use Red Energy as my supplier because I can get better rates elsewhere, but I keep using Red Energy for the calculator to make it easier for anyone to get an idea of how much an appliance is costing them.

The current rate from Red Energy without discount is now 26.235 cents per kWh.

The subtle increase I find is the cost to service to the property. Electricity companies I suspect know people compare rates for usage of electricity and are possible less likely to compare the cost to service the property. This rate continues to increase possibly faster than the usage rate. If you're shopping around for electricity make sure you consider the service to the property. We are a lower user of electricity and the service to the property makes up around 25% of the cost of electricity for us. We save a consider amount just by finding a supplier with a lower service to property charge even though they don't discount this charge.

Ultimately I suspect the electricity companies could price themselves out of the market by increasing the service to the property faster than the usage rate. Telstra did the same with the cost of the telephone line to the property and now many people no longer have a landline. At $1.10 per day which is $400 a year, over ten years this is $4,000. Fuel cell technology which uses natural gas is currently well above this price, but if there were some future development which would enable fuel cell technology to be put in the home for a capital cost of $4,000 it may be possible for people to use natural gas only to power their home. The higher the electricity companies make the service to the property the greater they risk to their business. Wouldn't it be great to get rid of one of the utility bills.

Kelvin Eldridge

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