Hi, I recently signed up to power shop. I'm a bit confused by the buying of power units.
Can anyone explain them? We use power in kw, so what is a unit of power compared to our actual usage?
Also I notice there a many options, some green (self explanatory) some are just the standard price. Why would anyone buy the standard price one, and not the discounted ones? I find it all a bit new.
Hi. The OP didn't specifically say whether they had time of use or flat rate.
Powershop do have a supply charge. If you turn everything off your effective unit price will rise massively to cover the daily charge. The trick is, if you know you are going away next month, pre-purchase some extra units THIS month at the current unit price.
However general advice for new Powershop users is if in any doubt at all DO NOT pre-purchase ANY packs. Wait until you receive an email entitled "Buy now and save even more" then go to the shop and purchase the exact amount of 30% online saver units you just used in the previous month (they will tell you how many in the email). By doing this you will be paying the exact rates specified on their Product and Price Information Summary.
You are right, I should have clarified that you only see the unit rate. The supply charge is already built into the unit price. The last time I went away for 4 weeks in 2014, my usage was zero for the 4 weeks and unit price did not increase much after that.
The whole system is quite confusing. I've only been signed up since May but my rates have gone from 19c to close to 20c (Vic Powercor area).
However, the "future packs" work out slightly cheaper than the 30% online saver. It's kind of hard to tell though as when you can buy the future packs (winter/summer), the current online saver is usually cheaper but then the online saver goes up higher than the future packs.
Example:
The current 30% off unit price is 20.12c.
Future packs available now:
Leads me to believe the 30% off unit price will increase to somewhere near 21c/unit.
Also, its a good idea to download their app as they offer a small amount of cheap units every couple of weeks.
E.G. Last week they offered 15 units of Grand Final Weekend Special @ 18.98c $2.85
Not a great amount but still better than nothing.
I'm not an expert in it, but my understand is to look at the estimations given for the months of the future pack.
If PS underestimates your usage you're better to wait and pay during the month.
If PS overestimates your usage, buy the future packs.
If it's spot on then it won't make any difference.
For this to work you need a bit of understanding (historic knowledge) of how much power you use over different months.
Hi,
Thanks for all the replies.
I am on flat rate. Not sure what difference that makes.
From reading everyone's responses, I think I should just experiement for a few months to work it out. It does seem a bit confusing. But it does seem to better to pre buy than to wait for the end of month bill.( let me know if this assumption seems wrong.)
The assumption as a general one is wrong. It may or may not be better depending on your situation and how well you can predict your own usage (refer lysp post above).
From their FAQ:
Product prices will go up in summer and down in winter following the cost Powershop pays for wholesale electricity. Matching the prices of our Powerpacks to wholesale costs reduces our risk so we don't have to charge you extra to fix your rate. We also run a schedule of power Specials to help you save even more.
Powershop, like most businesses, has fixed costs that are incurred irrespective of the number of units sold to a particular customer (for example to lease the metering equipment at a property). In addition, Powershop is charged daily charges by the distributor companies which are payable whether a customer uses a little or a lot of power.
As we offer a single unit price that is inclusive of all costs, it is necessary to adjust (or scale) the percentage allocated to fixed costs depending upon how much power a customer uses.
So as an example, if Powershop’s fixed costs were say $200 per year, and we needed to recover this equally from a user who uses 8000 units per year and one who uses 20000 units per year, the component of the unit price for each user would be 200/8000 = 0.025 (2.5 cents) and 200/20000 = 0.01 (1 cent) respectively.
All other Powershop costs are variable costs. As such, these costs are recovered with no scaling based upon how much a customer uses.
So while it looks as though the average user is paying more per unit, they are not paying more towards the fixed costs and are paying the same towards the variable costs. This approach of scaling the unit price based upon how much someone uses simply ensures that all users are being fairly charged for their proportion of the fixed costs.
And
Why are the prices different for different people?
The cost of your power will differ depending on where you live, how much and when you use electricity, your metering set-up and how much the distributor company in your area charges. If you have more than one meter, you will generally have cheaper power prices as a multiple meter set up means your power company can take advantage of off-peak times and are able to pass these savings on to you.
Your price per unit will vary based on their projection of your usage for the month ahead. The longer you are with them, the closer those estimates will be to actual usage, so early days you can see a sharp change month to month.
Future packs are great if they are massively over estimating your usage thus giving a lower rate. Random "special" offers will help lower the monthly cost so grab when you get the notification. The Online Saver is what you'll use to top up your account at the end of the cycle. If you fail to top up within 3 days ( I think, could be wrong) then they will automatically top you up using the standard rate.
Green packs are there for people who want and care about that sort of thing.
Use the app to get all the specials, use the graphs to see when you're using the most power if you want to lower usage, and hopefully you'll save yourself some money. We saved $900 in our first year with Powershop without changing much, just paying attention to unit prices and grabbing specials.
So my current online saver says I can buy at 22.55, my November future pack is at 22.65. There is a strong chance PS will over estimate my usage, coz I'm a really low usage person and this is my first month with them.
So because my November price is more than me online saver price, I'm not tempted to buy it, unless ofcourse next month, my online saver price goes up.
Does the online saver price move around?
Also, if I over purchase the online saver unit (currently 22.55) does it just roll over into the next month if I don't use it all? If so, I can just over buy the 22.55 instead of the future pack for more.
Because you're new, you'll see a bit of variation in prices for the next couple of months. One thing is certain tho, prices change. The November Online Saver price will not be the same as the October Online Saver price. If the estimated usage for November seems high, then the Future pack will save you a bit. Chances are your November Online Saver price will be 22.75 or so, but that's not 100% as it's all new data for you. You'll get used to the process once you start seeing how many units you're using.
The real savings come from the quarterly future packs (Spring, Summer, Autumn, Winter) and from the random offers. Monthly Future Packs are generally about .1-.2 cheaper. Right now, I have 180 units pre paid for each of the next 3 months, with an additional 70 units pre paid for November.
What you don't use either gets refunded or rolls over, depending on your review date and what you bought. Works like this: The pack with the earliest expiry date (i.e. 31st Oct) is used first. If a pack is still valid, it'll roll over to the next month. If it expires and you haven't used it then it's credited to your cart.
For example, say your review date is November 7th and you used 250 units. Let's also say you had bought 150 October Future Pack units in September, 100 November Future Pack units today, all the specials, and 50 units of Online Saver giving you a total of around 380 units. First they deduct any expiring 31st October (150 future pack units, 80 Special Offer units) leaving you with 20 owing. This would come off your Online Saver units purchased, leaving you 20 Online Saver and 100 November Future Pack units for the 8th Nov-7th Dec period. If you had used 400 units, using the above, you would need to top up 20 units for the 8th Oct-7th Nov period and have nothing carry over.
Powershop could be cheap if you are following your usage closely as your rate calculation is highly depended on their estimate average daily usage ( this is not applied to those who has smart meter).
If you have an old meter, what they do is estimating your average daily usage based in your last actual meter reading which could be benefit for you or could cost you more.
I live in a apartment building with no access to my electricity meters and am wondering if powershop will be good for us for people like us. At the moment i am with red energy and meter get read once every three months
I am currently pay 36.03c/unit. which is jumped from 26.xxc/unit paid last time. Comparing this with other providers' advertised price (using same formula by PowerShop). It is starting lost competitiveness. I am looking to switch to others
Note that Powershop is now available in South East Queensland:
http://blog.powershop.com.au/south-east-queensland/
$75 credit for referrals still apply:
Powershop Referrals
Hi, 1 unit of power is equivalent to 1kW. Their rate have taken into consideration the peak n off peak usage. So if you have used 8kW peak and 5kW off peak, you buy 13kW of power. Good thing is that they don't have supply charge. So if you go on holidays and turn everything off at home, you pay nothing for that period. As for the standard rates, I think it's to force you to buy or settle your account at the end of each month buying the discounted units, if not they will charge you the standard rate.