Most retail customers pay a small fixed daily charge, and a larger variable charge based on the volume of electricity they use. So the (mainly fixed) cost of network services is “smeared” over the total volume of electricity delivered.
However, there is no clear link between the volume of electricity a customer uses and the cost of providing them with network services. Network costs are mostly driven by how many appliances a customer has turned on when peak demand occurs on the local network. Critical peak demand often happens in summer, with an air conditioner adding an estimated $2,400 in grid costs that must be subsidised by all electricity users.
So there is a fundamental inequity between customers. Those with high demand at peak times drive up network costs. Others don’t, but still pay the bill.
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However, there is no clear link between the volume of electricity a customer uses and the cost of providing them with network services. Network costs are mostly driven by how many appliances a customer has turned on when peak demand occurs on the local network. Critical peak demand often happens in summer, with an air conditioner adding an estimated $2,400 in grid costs that must be subsidised by all electricity users.
So there is a fundamental inequity between customers. Those with high demand at peak times drive up network costs. Others don’t, but still pay the bill.
Read more .....