Another Electricity Distributor to Change Demand Charges on Bills

October 17th, 2016

Around 45% of energy bills are comprised of these network charges, so an increase or even better, a decrease…. can make a significant change to your electricity outgoings.

Jemena owns the poles and wires that distribute power to over 1,400 large market businesses north and west of Melbourne.

Around 45% of energy bills are comprised of these network charges, so an increase or even better, a decrease…. can make a significant change to your electricity outgoings.

From 1st January 2017, you may see a change to “demand” charges on your bill.

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Following many other distribution networks, Jemena will be changing their billing system to a “demand” or “cost reflective” style of billing.

Rather than your current demand charges, measured in kilowatts (kW), the new demand will be kilovolt-amps (kVA), which is supposed to better reflect the actual amount of power required to supply to your business in short bursts. kVA is typically billed in 15-minute intervals, so if your usage spikes are “peaky” you may end up paying more than you do today.

The new billing structure is mandatory for all large market businesses who currently have a demand component on their bill.

The Problem

If you have poor power factor, you will be paying more.

The Solution

If you have good power factor, you can actually use this change in billing to reduce your current energy outgoings. You may even be able to ‘opt in’ to the new billing structure if you have good power factor.

What is power factor?

Your power factor is the ratio between the real power your business requires, and the apparent power required to supply it. If you have a good power factor, then your systems are running efficiently, and your distributor is supplying you with only the power you require.

Your mobile phone data plan is a simple analogy of the power factor issue. The mobile data you actually use, is like your working power or kW, and your mobile phone plan commitment of $49 per month, is like your kVA - the amount of data your mobile phone provider is giving you access to. You may pay for 30GB of data every month, but only use 20GB of data. Yet, you’ll be billed the full $49 you’ve committed to. In this case we would aim to reduce your charges by a third and only pay for the 20GB, or $32.

Learn more about our power factor correction services.

Along with traditional energy efficiency solutions, power factor correction (PFC) could be an effective way to reduce demand costs for businesses.

Jemena has released rates for the new tariffs, so companies like Choice Energy can assess them along with your current bills to forecast your projected costs as of 1st January 2017.

As boring as electricity may be, now is the time to manage your peak demand by assessing a load of equipment you run, your power factor and the timing of your equipment operating at peak load.

Take back control of your energy

Speak to one of our Choice Energy Assessors for a free energy evaluation today!

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