Power Plans for Electricity: The impact of tariff structure changes on energy vulnerable households

Abstract

This is a mixed methods research project aimed at gaining a better understanding of the experience of energy vulnerable households under changes to electricity tariff structures.

The research is a collaboration between Bankwest Curtin Economics Centre, WACOSS and Horizon Power and draws on a rich dataset resulting from a pilot project in regional WA that was conducted by Horizon Power over the 2016/2017 summer.

With this pilot, Horizon Power was able to test key features of a ‘Power Plans’ pricing concept based on a model similar to the mobile phone plans, familiar to many. Access to smart meters at every household in the location allowed both the study participants and control group to be monitored.

In the Power Ahead trial, each participant was allocated a peak energy target to be used during peak periods, with customers being offered incentives to reduce their energy use during these peak times. No customer was worse off as they were still on their normal tariff but received incentives for changing usage.

Usage data suggests that a high proportion of vulnerable customers would be better off under Power Plans and a large majority of those who took part in the trial indicated a positive attitude towards the proposed approach. In consequence, the benefits of the approach are acknowledged and the value of extending the trial of Power Plans to a wider set of communities is supported.