Network Tariff Review on your sites – Look out for potential energy costs savings

Many Shell Energy customers can realise significant cost savings simply by shifting to the right tariff to meet their current business needs and energy usage.

Total cost savings of $4.16 million^ were identified for our large business electricity customers and small multi-site business (excl. Victoria) customers in 2020 through the Shell Energy Network Tariff Optimisation (NTO) program. With the NTO program review process underway at the end of March, more customers can expect to take advantage of cost savings.

The NTO review program is a complimentary, six-monthly review undertaken by Shell Energy to help eligible customers identify the right tariff for your business. As tariffs and your energy usage patterns change, you may find that the tariff you are on is no longer optimal.

While the potential cost savings identified can be substantial, not all customers choose to capture the savings, so we are again encouraging our customers to take the time to check the results of their review.

Throughout 2020, only $2.38 million^ of the $4.16 million potential identified savings were implemented by customers choosing to proceed with a tariff change.

What are network tariffs?

Network Tariffs are regulated charges set by the network distributor and approved by the industry regulators to cover the cost of building, maintaining and operating the poles and wires to deliver electricity to customers.

These tariffs are “passed-through” to large customers, meaning the distributor’s charges are billed to you via your retailer. For our small multi-site business customer, depending on the chosen pricing structure, network charges may either be passed through separately or form part of the retail tariffs and charges. The tariff applied by the distributor doesn’t always take into account more complex factors affecting site energy usage, rendering it less than ideal from the outset.

Network tariffs—like business operations and energy use—also change over time, meaning the right tariff three years ago may be far from the most cost-effective now, and not all distributors are proactive in reassigning tariffs to optimise and align to the customers’ circumstances.

Cracking the network tariff code

Shell Energy recognises the enormous task of attempting to decipher and maintain the optimum tariffs for your business over time, which is why we also see the considerable value-add for investing in this complimentary service on behalf of our customers.

Our team of NTO experts collates a raft of business-specific energy data and analyses it within the complex rules of tariff eligibility, matching your precise historical use to recommend the most cost-effective current tariff available to you. Given that network tariffs can comprise on average around 36% of the total energy bill for a large customer, potential savings can be substantial.

I’ve already changed my tariffs, does this still apply to me?

You can change your network tariff once each 12 months. Even if you’ve previously had your tariff reassigned, routine changes to the tariffs themselves mean there is never any harm in reassessing. Network tariffs are regulated by the Australian Energy Regulator (AER) and typically revised by individual network operators every year, but even in instances where the tariff itself hasn’t changed, it’s possible that your business’s energy use has.

How do I get started to implement the change of tariffs?

Our team of experts will do the hard work for you to identify the optimal tariff for your site. Your account manager will email you a detailed report of the NTO review (including identified potential cost savings) and will make recommendations based on this analysis. Should a tariff change be recommended, you’ll simply need to agree to the change and your account manager will get the ball rolling.*

^ Estimated savings identified by Shell Energy’s (previously ERM Power) Network Tariff Review Optimisation program for C&I and SME multi-site (excl. Victoria) customers in the October 2020 and whole of 2020 tariff reviews. Actual savings will vary depending on customer usage and network charges.

*Important Information:
Network tariff eligibility requirements apply and changes are at the discretion of the Distributor. Shell Energy does not guarantee that the Distributor will accept a request to change the network tariffs. Our recommendations are based on your business energy consumption for the 12 months from last year to the previous year.
If your business has been impacted by COVID-19 it’s important that the recommendations are checked thoroughly as network distributors will only accept one tariff change request per year. If the tariff selection does not reflect your expected usage, you may incur additional charges.
Our review is based on historical usage data and current tariffs. Your historical usage may not be reflective of your future usage and tariff pricing may change. If a network tariff change is approved by the Distributor, you may be locked into the new tariff for a period of time. Please consider future usage before proceeding with the request to change tariffs.