Electricity prices could rise during peak times under PWC proposal
The way electricity prices are set in the Northern Territory should move from a flat rate to a floating one that changes every half an hour, according to the head of Power and Water Corporation (PWC).
A parliamentary inquiry into power price structures in Darwin has heard electricity prices in the NT are currently the same for any time of day.
But PWC's chairman Ken Clarke said this needed to change, because it cost the corporation more to deliver electricity during peaks.
"It follows that in an ideal world, demand for electricity at peak times should be the main driver in deciding the tariff structure," he said.
"It is now overdue that we move to cost reflective pricing so that electricity prices are transparent and reflect the real cost of providing the service."
The current method of measuring electricity use reflected only the total amount of energy used, not when it was used, Mr Clarke said.
This made it impossible to introduce sliding tariffs based on demand and resulted in increased costs for Power and Water.
"There is no financial incentive for these customers to reduce their demand during peak times, which is what drives the cost," he said.
"[The proposal] puts capacity in the hands of the consumer to make decisions to minimise their electricity costs."
PWC senior executive Djuna Pollard said the current flat rate for electricity benefited large users.
"The way tariffs are structured at the moment is that effectively the more you use the less you pay, and so that's a perverse outcome clearly," she said.
"Over the next or current five-year regulatory period we are looking to move away from the declining block tariffs."
But introducing sliding prices is not simple and would require major investments in infrastructure, Mr Clarke added.
"While the solution looks simple the introduction of time of use and demand tariffs requires investment in more sophisticated metering technology, called interval meters, and systems and processes that support that," he said.
"It will take some time before this type of tariff can be rolled out in the broader community.
"Nevertheless, the community as a whole needs to be prepared for this change."
If smart meters are introduced it could allow customers to monitor their usage and the current price of electricity on a smart phone, said PWC chief executive Tim Duigan.
"You need to actually give the customer signals either in apps [so] they can look on their phone or a some sort of device on the wall that says you are using X dollars a megawatt hour right now," he said.
Smart meters have been introduced in Victoria to some criticism, with a micro party called People Power-No Smart Meters Party contesting the Victorian election.
