John Constantine – Fifty percent electricity penalty-tax-fine rate

My personal electricity account went ‘off-plan’ a few months ago without me noticing.

This quarter the bill arrived charged at the penalty rate that applies for people that do not keep track of when the old plan expires.

The company happily supplied a quote for a new plan at a thirty percent discount on usage charges, not supply charges.

A perfectly valid way of looking at this is that electricity is billed out at a base profit rate for those that keep ‘on plan’ and billed out at the second tier ‘super-profit’ penalty rate for those that do not notice the account falling off-plan.

The thirty percent ‘discount’ to get back to the base rate could equally be described as a fifty percent penalty whacked onto the base rate whenever the customer doesn’t notice.

One quarter billed at the super profit penalty rate could be as profitable as many quarters at the base rate, which incentivises the business model of grabbing as many customers as possible and hoping they slip into the super-profit customer bracket eventually.

Now going with a ‘permanent low’ company that advertises no discount plan, just competitive pricing all the time without periods of superprofit penalties.

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32 Responses to John Constantine – Fifty percent electricity penalty-tax-fine rate

  1. I wish it were that easy. Every time my plan comes up for renewal, I check out all the suppliers available in our area and compare the plans. I have not found one that provides a ‘permanent low’. Personally, I don’t trust any electricity company; you can’t win, you just have to accept a compromise.

  2. Baldrick

    I think social justice electricity suppliers are fast becoming more unpopular than banks, political parties and taxpayer funded media.

  3. Myrddin Seren

    I think:
    social justice electricity suppliers ( to be nationalised – de facto by regulation or full bottle )

    are fast becoming more unpopular than banks ( to be nationalised – de facto by regulation or full bottle )

    political parties ( spit )

    and taxpayer funded media. ( ‘Why oh why’ cry the employees of commercial TV, radio and print media ‘do our ABC and SBS colleagues enjoy the ‘independence’ denied up by having to chase revenues ? ). To be nationalised.

  4. mundi

    What state are you guys in?

    I don’t think this a trick by retailers, but rather another unexpected regulatory impact. The regulations require people to be given a fixed term, but not locked in after that unless they intitatite a request to be.

    Hence they have to throw you off, also I don’t think they get to make any profit, rather there is some market set rate they have to charge and forward the money to, as you basically are no longer their customer.

  5. David

    Take a look at Lumo or Dodo, discounts tied to direct debit payment, no sunset clauses.

  6. notafan

    I wonder how many people don’t even know that they can get a ‘discount’.

    Must check my mother’s bills tonight.

    Power companies are weasels. I’d ask for the discount to be backdated to the end of the last ‘plan’ especially if it is a ‘pay on time’ discount and you paid on time with dd.

    I want one that does not puff off it’s green credentials and just gives the best price to everyone.

    Better still, instead of a green option, a fossil fuel only option.


    Sneaky has been an issue for quite a while.

  7. Take a look at Lumo or Dodo, discounts tied to direct debit payment, no sunset clauses.

    I was with Lumo and when my 30% discount contract expired, they told me that I could only get 20% in a new contract. I checked out other retailers and one offered 30%, so I signed up with them and transferred from Lumo. Their peak and off-peak rates were much the same and one was lower.

    For the next few weeks, I received increasingly strident calls from Lumo, with them eventually saying they could match and the rep that I spoke to got things wrong. I told them that I’d already signed up and their ‘mistake’ was their loss. I wasn’t about to renege on the new contract.

    Why is it that when you call as a new client, you get an Australian on the phone, but thereafter everyone is an Indian or such?

  8. eam

    notafan, I don’t get any discount.

    6 years ago I researched all the companies and chose my supplier on its daily supply charge and cents per kWh rate.

    My latest bill was about $160 compared to $200 plus previously – 6 years ago. There has been no change in occupants or major appliances.

    Cooking, HWS and heating are all gas.

  9. eam

    Oh, I forgot to add…I still get postcards from AGL begging “E, please come back”

  10. Bruce

    It all seems to be “creative accounting” on a massive scale.

    The “retailers” with all their “plans” do NOT generate a milliwatt.

    They are merely acting as a cut-out / buffer between the (mostly state-owned) generators and the milch-cow (or is that kuh) that is the public.

    Their overheads consist of a herd of drones that travel about and allegedly read the meters, a rudimentary computer system, bulk postage, some ostentatious office space and a LOT of advertising.

    Follow the (vast sums of) money.

    And the multitude of “solar” operators are no better, because they tap into the same dodgy accounting processes. If you have less than fifteen Kilowatts (peak) capacity in your domestic solar rig, you are kidding yourself. If your rig does NOT have a proper deep-cycle battery storage system and a PURE sine-wave inverter, it is a JOKE. And don’t get me started on “grid feed-in”.

  11. John constantine

    Once you have typed ‘electricity bill compare’ into the search screen and used one of the compare functions, then you can ring your existing company and ask for their discount plan.

    The call center must hear you ask for the discount before they can offer the discount.

    Then you can reject their first offered discount, and mention that you have a better offer. Only then can you be sure you have full price discovery.

    Don’t ask, Don’t get.

  12. Deplorable

    Take a look at Lumo or Dodo, discounts tied to direct debit payment, no sunset clauses.

    Have been with Dodo for years and now with solar no contract . The prices only vary once a year with the allowed increase and they will negotiate discounts. No complaints at all and they still seem to come up trumps on comparisons.

  13. Fulcrum

    Exorbitant penalty rates used to be the domain of unscrupulous loan sharks.
    Laws are surely needed to protect all Austalians from this immoral behavior.
    As it has the potential to hit everyones pockets have a referendum on this.

  14. sfw

    It’s terrible, even the online calculators seem to be confusing when you search for a better deal. We live in a cold rural area, electric hot water, gas cooking and wood heating, one fridge, TV, computer etc. Last bill was over $700 for a calendar month the discount took it down to $520 (calendar month). If you miss the due date by one day the full $700+ is charged. The family is only my wife, myself and two teenage kids.

    So we are paying around a $125 a week for electricity and another $50 a week for firewood, a $175 a week to keep the lights on and hot water. Something is seriously wrong, I can’t find a better deal anywhere and geez it gets cold here some days. I guess that all this helps to keep the planet cool, well it’s working a little too good for my liking.

  15. Diogenes

    As I have posted on the open thread the comparison sites make to too much of the “discount”. Plugging rates and my usage for the last 12 months into a spreadsheet with the various companies rates, I can only find an overall saving of $1 a week from best to worst , or about 30c a week from my current provider,who I want to change from as they are going green.

    Thinks, if green energy is cheaper why does the green option cost more rather than less on every providers site ? To be sarcastic I have rung a few providers and asked if I could buy a coal only plan, with no renewables as coal generation is so much cheaper even without the subsidies

  16. John Michelmore

    The point here is that the retailers take advantage where ever they can. Our retailer started advertising on telly that it was moving out of coal, then they stuffed up our concession (and thousands of others because the SA Gov website advised for (A something L) customers not to call because the couldn’t handle it). They took three months to let us know; also failed to advise their feed in tariff was to go from 6 cents to 16.8 cents etc. I changed and advised them via facebook why I’d changed, the anti coal ads stopped shortly after (not that I had anything to do with that). Its a sign of the times, we will have to watch our energy suppliers relentlessly now!! The energy market is corrupted and this is the result of poor Australian governments, trying to manipulate it for zero gain; we all know how that will end!!

  17. John Constantine

    Authorising the loan shark social justice electricity companies to direct debit your bank account is uncomfortable, but seems the only way to avoid them being able to hit you with the 50% penalty for missing a payment by a day.

    Why not require the billing statement to tell you in plain language how many more bills will be at the current plan rates, and when the current plan expires and the 50% penalty rates begin to be charged?.

    Are they ashamed of their business models, or are they loan shark predators?.

  18. stackja

    John Constantine
    #2462268, posted on August 8, 2017 at 9:46 am

    I use a future payment Bpay option by my bank, set to the day before due date.

  19. Bruce

    Can we all say, “CARTEL”?

  20. Speedbox

    Last bill was over $700 for a calendar month the discount took it down to $520 (calendar month). If you miss the due date by one day the full $700+ is charged. The family is only my wife, myself and two teenage kids. $175 a week to keep the lights on and hot water.

    Holy sh*t. $700 for 1 month ($520 after discount) . Seriously? At that price it may be cheaper to go “off grid” with a generator.

  21. Waz

    We live in a large house in Sydney and we are power junkies; both electricity and gas. We leave literally tens of lights on at night (admittedly all LED’s these days) and when we are away (lots of timer). We run AC in summer and gas heating in winter; all in a large leaky old Federation home. We are well off and don’t think too much about bills but with the recent uproar over power costs I decided to check and investigate. Our last electricity bill was about $1700 for the April to July or about $6800 pa or $18.63/day. I was looking at all sorts of options like solar and gas generation but even now for large energy wasters like us, it costs less than a packet of smokes per day which still seems sufferable for such a life essential.

    However, in my checking I did confirm that if you go rooftop PV you need to set it up as completely offline to be economic, as you still pay a large grid connection fee if you use grid power. I found for our 7 BR multi-bathroom house with 2 and half large fridges, and AC etc it’s best to have a smaller PV array, a large battery (there is no point in having a PV array that generates more power than the battery can take up to charge it) with a natural gas 12 kVa generator (which runs at about 60 dbA) as backup and an alternative battery power charge source. The total cost is less than $30k and you never need the grid again; just a gas line connection which charges only usage rates and a reasonable 55c/d grid connection fee (I am of the view gas rates have peaked following the likely discovering a new very large (2TCF) Bass Strait gas field with Exxon/BHP announced yesterday); you can also run the generator off propane if you want to really stick it up them all and be completely off-grid.

    Some small businesses out there have already done all that and if a whole heap of folk do it then the entire system will be up the creek; you beauty!

    The NBN comes my way in October and I’m telling them to get stuffed and will go microwave wireless.

  22. Rob MW

    It’s incredible that as a nation electricity supply and affordability are top consumer and political issues and somewhat on a par with Measles, insofar as Measles hardly rates as any sort of talking point now due to the advent of the Bunsen Burner and redhead matches.

    I’m just looking over the plans for a renewable coal fired power station with a shelf life 3 x greater than Wind and 4 x greater than solar, the plan is to replace the old worn out coal fired power station that already had a shelf life 3 x greater than Wind and 4 x greater than $$$olar. The argument against renewable coal fired power stations is that they (Coal) are not as often renewable as either Wind or $$$$olar.

    The compounding costs of replacing wind & $$$olar generation that have relatively short comparable shelf lives means that cave dwelling is eventually going to become the norm rather than the exception.

  23. Sfw

    I forgot to add that my wife is incapacitated and has a small oil electric heater going in her bedroom for about 15 hrs a day, that’s it. We live in Tawonga Vic and the winters are long and cold.

  24. Mundi

    it’s meaningless to give us price, how many kilowatt hours per day are you consuming?

  25. Waz

    Mundi, I guess you’re referring to my post. So sorry for being meaningless. Our last bill was 89.53 kWh/d. My calc was a bit off as the bill says $21.34/d (not $18.63 in original post); still about a packet of smokes though. Total green house emissions were apparently 7.82 tonnes over the 91 days, but that would double if we’re eating a lot of curries. I have a flexi-saver account with Energy Australia.

  26. Tailgunner

    I can’t believe my man, JohnC, couldn’t fit any references to The Shorten Foundation, the Turnfailure Team or Yarragrad Nazgul into his post.
    Sad.
    🙁

  27. Rob MW

    “Total green house emissions were apparently 7.82 tonnes over the 91 days,…………”

    Houses don’t produce any electricity emissions, the power stations do. If Waz turned the power completely off during those 91 days; would the 7.82 tonnes have been produced anyway, or would the power company shut down the station so Waz wouldn’t be accountable for the 7.82 tonnes ?

    Waz – post those emissions back to the power company and ask for a refund.

  28. I’m with AGL at present and their bills, much to their credit, makes no mention of how much green house gas we have produced in the last quarter. The Greens should be frothing at the mouth for this omission.

  29. John Constantine

    Good Senator Dave wedging the uniparty with the opportunity for the media cycle to talk about removing the GST from electricity bills.

    The media are getting to weaponise ssm, so nothing else will go to air.

    immediate 10 percent off.

    Make the political class come out and declare that they are using Climate Justice to deindustrialise australia.

  30. Don

    Retailers are required by regulation to provide “standing offer” prices which they must honour for set periods of time.. Governments think these prices protect customers. Their actual effect is to reduce competitive pressure.

    The standing offer mechanism allows a retailer to set a high price and then offer large discounts (20-30%) off that price. Nearly all retailers do this. Customers might or might not ask for a discount depending on their knowledge of the market and their sensitivity to price. If the standing offer mechanism did not exist then retailers would need to offer their best prices up front, especially in a highly contested market such as Victoria.

    If a customer has entered a contract with a discount price, the standing offer mechanism then gives the retailer another opportunity to charge a high price by shifting the customer to its current standing offer price. A price the retailer couldn’t offer without the benevolent hand of the government not merely enabling but requiring them to do it.

    The best consumer protection is a well designed and sufficiently competitive energy market. Governments have stuffed up both aspects of the wholesale and retail electricity markets. Now we have the Greens and other geniuses calling for more regulation to fix the problem.

  31. Don

    Third para, first sentence, should have “at the end of the contract’s term”.

  32. John constantine

    Anybody distracted or not at their best has to pay a fifty percent penalty rate for not understanding how to game the system, or how the system games them.

    We need a brand new system.

    Australia, it is simpler to disconnect the electricity and live barefoot in a mud Hut. ( if you can afford the water to make the mud.)

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