How we calculate the prices in our factsheets?

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At Amber, we pass through true wholesale prices to our customers - and these prices change every half hour. However, as a part of Australia’s energy law, all energy retailers are required to publish energy plan factsheets which have a standard format so that our plans can be compared.

We calculate the values in these factsheets using the Victoria Default Offer (VDO) in Victoria, and the Default Market Offers (DMO) plus some additional costs outside of Victoria. These factsheets contain the prices against which we make our Annual Bill Guarantee, and represent the highest average price you would ever pay with Amber across a year.

We want to be totally transparent about how the prices in our energy plan factsheets are calculated and how these relate to the default offer prices set by the regulatory bodies. To explain this, there are a couple of questions we want to answer:

  • What is an energy plan factsheet?
  • What is default market offer?
  • How does Amber calculate the prices in our energy factsheets?

Let’s get started…

 

What is an energy plan factsheet?

Under the National Energy Retail Law, energy retailers are required to have Basic Plan Information Documents (BPIDs), or Victoria Energy Fact Sheets (VEFS) in Victoria, for each of their offers. These factsheets help you compare offers because all retailers must include the same information in the same format. It’s also what the comparison websites like Energy Made Easy, or Victoria Energy Compare in Victoria, use. You can find our factsheets here.

At Amber, we pass on true wholesale prices to our customers, so the prices in these documents only reflect the maximum average price we would ever pass through over 12 months. See our pricing page for prices our customers are paying in your area based on historical data.

 

What is a default market offer?

The Default Market Offer (DMO) - or the Victorian Default Offer (VDO) in Victoria - was created to stop electricity retailers offering seemingly impressive discounts based on an over-inflated baseline price. The DMO/VDO are the government reference prices for energy, designed to make it easy to compare energy prices from different retailers. This makes it easier for consumers to tell if they’re actually getting a good price for power.

Under the VDO, the reference price of electricity is set by Victoria’s independent energy regulator, the Essential Services Commission, annually. Under the DMO, the reference price of electricity is set by Australia’s independent energy regulator, the Australian Energy Regulator (AER), annually. The prices vary by network as each electricity network has different prices.

 

How does Amber translate the prices published in the default offers (DMO / VDO) to the ones in our factsheets (BPID / VEFS)?

For Customers in Victoria: VDO to VEFS

The VDO is expressed as a Daily Supply Charge and per kWh charge. Our Daily Supply Charge is different (and typically lower) than the Daily Supply Charge quoted in the VDO, as we only pass through the wholesale daily supply charge (which varies by network) + our subscription fee. Therefore, we calculate a Single Annual Cost based on an assumed usage of 4000 kWh per year. Once we have this annual number, we recalculate the cost per kWh of usage to reach the same Single Annual Cost.

Single Annual Cost calculation (using CitiPower network area VDO values for FY23):

=  Assumed annual energy consumption x VDO / kWh Charge + 365 days x VDO Daily Charge

= 4000 kWh x $0.217 / kWh + 365 days x $1.162 / day

= $1292.24

Implied price per kWh example:

= [ Single Annual Cost - Membership fee - 365 Days x Wholesale daily supply cost* ] / Annual energy consumption

= [ $1292.24 - $180 - 365 x $0.473 ] / 4000 kWh

= $0.2349 / kWh

*Network daily charge + metering daily charge

 

For Customers outside of Victoria (in the National Electricity Market): DMO to BPID

The DMO is provided as a Single Annual Cost for a given annual energy consumption (e.g., $1512 per year for 3900 kWh of usage in Ausgrid network). We convert this to an equivalent price per kWh with Amber.

This year, unprecedented volatility in the market has seen prices rise far more than the DMO, so when we calculate the per kWh price in our factsheets from this Single Annual Cost we will not take out smart meter costs (metering charge) or our subscription fee, and we will add on per kWh carbon offset costs to the final value.

Implied price per kWh example:

= [ Single Annual Cost - 365 days x Wholesale network daily supply cost ] / Annual energy consumption + Carbon offset cost

= [ $1512 - 365 x $0.359 ] / 3900 kWh + $0.004

= $0.358 / kWh

 

All calculations above include GST.

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