Customers who are projected to consume over 100 MWh/year on a given meter are designated as “Large Business” customers. Large customer tariffs entail substantially higher supply charges (starting from $45,87 per day) compared to “Small Business” tariffs (typically $1.35 per day). Consuming more than 100 MWh on a meter was a source of concern for many farmers, given re-designation to a large customer means losing all solar feed-in revenue and paying far higher supply charges.
Becoming a large customer was frustrating for those who did not consume far beyond the 100 MWh/year threshold and for those who paid the high supply charges despite only drawing from the meter (e.g. a pump or packing shed) for less than half the year. Farmers felt there was little choice if re-designated as a large customer, given the cheapest supply charge is $45.87 and others are even more expensive. The threat of becoming a large customer had caused some farmers to take action they considered impractical or unnecessary, including: (1) using diesel generators periodically to remain below the 100 MWh/year and (2) investing in a second meter next to the first meter to share the load and keep both below 100 MWh/year (despite using the same amount of power overall).
Here we share some specific scenarios and Ergon and QFF’s thoughts on the 100 MWh/year threshold and specifics of how the designation process is calculated and managed. For more information, see the RESOURCES section below.
SCENARIOS
Unexpected jump to large customer tariffs
Royce utilises flood irrigation on his cotton and runs large-capacity pumps. He recently experienced a situation where a meter running some of his pumps exceeded 100 MWh in a year. This triggered a change in his position to a “large customer” and meant an automatic switch from Tariff 62 (small business) to Tariff 44 (large business) which he mentioned happened without him being immediately aware. The result was a substantially increased supply charge and loss of the solar feed-in he had been receiving. He said it’s not as easy to move back to being a small customer, and that installing another meter to switch the pumps over to (if he was approaching 100 MWh) is expensive.
What should Royce do?
- See this VIDEO on the large customer threshold
- Check Ergon’s explanation on seasonal use to appeal to large customer classification HERE
- Learn what to do when you are near the large customer threshold and how to use your bills to estimate it HERE
- Understand why you are losing solar feed-in as a large customer in this VIDEO
- Learn HERE how demand is measured for flood irrigators on large and small customer tariffs and how to handle it
Large/small switch to avoid compensation?
Greg grows cane in the Mackay district. He runs three pumps on the one-meter and can be below or above 100 MWh depending on the season. He was on Tariff 50 (large customer) at the time of the July 2021 tariff reforms, where he learned that any business found to be >$500 worse off due to the reforms would be compensated by Ergon?/government? He had calculated he would be $29,000 worse off. Very shortly after this time, he was re-designated by Ergon from a large to a small customer. This is different to Royce (above) who found it a difficult process to prove your eligibility to move back to a small customer and that it doesn’t happen automatically. Greg is confused about how the 100 MWh projection is calculated, e.g. calendar year or a previous year from that month. He is unsure if he gets moved back to a large customer, whether he will still be eligible for the $29,000 p.a compensation based on his being worse off under the July 2021 tariff reform. Greg would prefer to be on the large customer tariff if he is reimbursed the $29,000 p.a, but not if he is not.
How and when is the large/small customer designation calculated?
- Read about the Electricity Tariffs Adjustment Scheme ETAS, which provides rebates on electricity bills for regional businesses moving from obsolete tariffs to standard business tariffs
- See Ergon’s Small and Large Customer classifications and tariffs explained in this VIDEO
Unable to predict the change to large customer classification
James opened a new larger packing shed within the last 12 months, and very soon after starting operations the NMI for the old and new shed was moved to tariff 50. The farm is not in a drought-declared area, so he is paying the high supply charge all year round even though the packing shed only operates for 6 months a year. James believes the tariff change occurred because too much was being used in the shed at the same time, but he’s not sure because understanding the situation and reasons for the change is very hard for him. The change to large customer tariffs happens at 100 MWh usage per year, but James couldn’t predict this, and he didn’t know more about this threshold beforehand.
What could James do to understand his energy use after changes like opening the new shed? How could he avoid large customer tariffs (if possible)?
- Check Ergon’s explanation on seasonal use to appeal to large customer classification HERE
- See Ergon’s Small and Large Customer classifications and tariffs explained in this VIDEO
Handling uncertainty and large customer tariffs
Rick is a cane farmer that has two large-customer NMI irrigation sites along with many other small customer ones. He knew they were a large customer on those NMIs on the old farming tariffs, and they knew something would happen in July 2021, but they could not predict how much more expensive it was going to be when they were moved to a large customer tariff. They only use the sites in the middle of summer, so they could only wait until the bill in March 2022 to know exactly how much more significantly expensive it would be. Because of these NMIs, they have had to stop thinking about maximising crop yield and start thinking about minimising cost, and if they can afford to spend that much money on energy per ton of cane for the entire farm. From the cost of these NMIs, Rick has decided to spend over $200,000 on infrastructure and pumps to move loads away from the large customer NMI sites, without a feeling of certainty about energy options or ROI in the future.
Is there anything else Rick can do in this situation?