Your rate adjustment is calculated each month and based on what the wholesale price was at the time you used energy, and how much energy you used at these times.
So, if you used more energy when it was cheap (typically when renewable energy generation is high), we’ll pass on those money-saving benefits to you in the form of a rate reduction.
But if you used more energy when prices were high (like fossil-fuelled peak times), this could lead to a rate increase for that month.
Bottom line: your electricity rate really depends on how motivated you are to save money and use the greenest energy possible.
Your bill will look much like a regular electricity bill, showing a breakdown of your charges, rates and usage. The only difference will be your bill adjustment, showing the adjustment to your rate that month.
Look out for the Price Efficiency Adjustment (PEA) – this is our technical term for your monthly adjustment. This number will be a negative or a positive depending on your energy habits.
For example:
| Rate | Usage | Amount | |
| Base Rate | 28c/kWh | 500 kWh | $140.00 |
| Price Efficiency Adjustment | -5c/kWh | 500 kWh | -$25.00 |
The PEA, or Price Efficiency Adjustment, is the term we use for your monthly rate adjustment. It’s essentially your score for how ‘price efficient’ you were that month. In other words, how often you used energy when wholesale prices were low.
It’s made up of three parts:
Since we’re all about behaviour change at Flow Power, we want to know how your approach compared to our average customer’s approach.
We discover this by subtracting our average customer’s PEA (the BPEA) from your monthly initial PEA (your CPEA) to get your billing period PEA, which amends your monthly base rate.
Or in other words: CPEA – BPEA = PEA.
Your Customer Price Efficiency Adjustment (or CPEA for short) is the figure that reflects how your energy usage pattern performed against the wholesale electricity prices and your network tariff.
The Benchmark Price Efficiency Adjustment (BPEA) forms part of your base rate on your energy fact sheet. The Benchmark PEA broadly represents the average customer price efficiency adjustment of Flow Power residential customers.
Your network tariff will determine the prices we use to calculate your PEA.
Time-of-use tariffs charge different prices depending on when you use energy (for example, during peak or off-peak periods), whereas flat tariffs charge one consistent energy rate.
A flat tariff is the most common type of network tariff. It means your distributor charges you the same rate to use electricity, no matter the time of day.
To determine your PEA on a flat tariff, we first need to determine your Customer PEA (CPEA).
We determine this by multiplying the total price (which updates every 5 minutes) by your electricity usage for that period, for the whole billing month.
Let’s say the total price was 10c/kWh during the first price period and your usage was 5kWh.
We’d multiply these together and repeat this multiplication every time the total price changed (i.e. every five minutes) while you were still using electricity.
We’d then divide this total by your total electricity usage for in the billing period. This process is called the Load Weighted Average Price (LWAP).
Below is an illustrative example. It’s important to know that price intervals take place every 5 minutes, and a typical billing period is about a month, so this is a very simplified example.
| Price period (5-minute intervals) | Wholesale price | Network Price | Total Price | Your usage |
| 1 | 2 c/kWh | 3c/kWh | 5 c/kWh | 5 kWh |
| 2 | 7 c/kWh | 3c/kWh | 10 c/kWh | 3 kWh |
| 3 | 17 c/kWh | 3c/kWh | 20 c/kWh | 2 kWh |
This example’s calculation would be [ (5 x 5) + (10 x 3) + (20 x 2)] / (5 + 3 + 2) = 9.5 c/kWh
We then need to subtract this figure (your LWAP) from the Time Weighted Average Price (or TWAP) for the month.
We calculate your TWAP by adding up the total price for each price period in the billing month and dividing the total by the number of price periods for the billing month.
Using the above example your TWAP calculation would be (5 + 10 + 20) / 3 = 11.7 c/kWh.
Now we’re ready to get your CPEA, by subtracting your TWAP figure from your LWAP figure.
In this example your CPEA would be 9.5 c/kWh – 11.7 c/kWh = – 2.2 c/kWh.
Still using the above example, the CPEA is negative and when we then minus the benchmark to get your PEA:
CPEA – BPEA = PEA
or
-2.2c/kWh – 1.7c/kWh = -3.9c/kWh
This results in a negative PEA of -3.9c/kWh, which means that in this example, you’d receive a reduction of 3.9 cents off your base rate on your bill for that month.
If the base rate was 30 c/kWh, your final rate would be calculated as follows:
Base rate + PEA = electricity price
or
30 c/kWh + (-3.9 c/kWh) = 26.1 c/kWh
However if your CPEA exceeded the BPEA, your PEA that month would be positive, increasing your base rate.
Let’s use the same examples from above. With a base rate of 30 c/kWh and a positive PEA of 3.7 c/kWh, your electricity price would be calculated as follows:
CPEA – BPEA = PEA
or
3.7 c/kWh – 1.7 c/kWh = 2 c/kWh
Your PEA in this example would be 2 c/kWh, meaning you’d receive an increase to your base rate for that month. It would be calculated as follows:
Base Rate + PEA = electricity price
or
30 c/kWh + 2 c/kWh = 32 c/kWh
There are three key differences in a time of use tariff compared to the flat network tariff:
To determine your PEA on a time-of-use tariff, we first need to determine your CPEA.
We determine this by multiplying the total electricity price (which is the sum of the wholesale price and the network price, and updates every 5 minutes) by your electricity usage for that period. We do this for the whole billing month.
Let’s say the total price was 15c/kWh during the first price period and your usage was 5kWh.
We’d multiply these together and repeat this multiplication every time the wholesale price changed (i.e. every five minutes) while you were still using electricity. We’d then again divide the total by your total electricity usage for each price period.
This process is called the Load Weighted Average Price (LWAP).
Below is an illustrative example (note that price intervals reset every 5 minutes and a typical billing period is about a month, so this is a very simplified example):
| Price period (5-min interval)
|
Network rate | Wholesale price | Total price | Your usage |
| 1 | 10 c/kWh | 5 c/kWh | 15 c/kWh | 5 kWh |
| 2 | 10 c/kWh | 10 c/kWh | 20 c/kWh | 3 kWh |
| 3 | 15 c/kWh | 20 c/kWh | 35 c/kWh | 2 kWh |
In this example, the relevant calculation would be [ (15 x 5) + (20 x 3) + (35 x 2)] / (5 + 3 + 2) = 20.5 c/kWh.
We then need to determine your Time Weighted Average Price (TWAP). We calculate this by adding up the total price for each price period in the billing month, then dividing the total by the number of price period for the billing month
In the above example, this would result in a calculation of (15 + 20 + 35) / 3 = 23.33 c/kWh.
To get your CPEA we subtract these two figures from one another. In this example your CPEA would be 20.5 c/kWh – 23.33 c/kWh = – 2.8 c/kWh.
Still using the above example, the CPEA is negative and when we then minus the benchmark to get your PEA:
CPEA – BPEA = PEA
or
-2.8 c/kWh – 1.7 c/kWh = -4.5 c/kWh
This example results in a negative PEA of –4.5 c/kWh, which means that you receive a reduction in your base rate on your bill for that month.
If the base rate was 30 c/kWh, your final rate would be calculated as follows:
Base rate + PEA = electricity price
or
30 c/kWh + (-4.5 c/kWh) = 25.5 c/kWh
If your CPEA exceeds the BPEA, your PEA that month would be positive, increasing your base rate.
Using the example above, with a base rate of 30 c/kWh and a positive PEA of 3.8 c/kWh, your electricity price would be calculated as follows:
Using the same examples from above, with a base rate of 30 c/kWh base rate and an example positive PEA of 3.8 c/kWh, your electricity price would be calculated as follows:
CPEA – BPEA = PEA
or
3.8 c/kWh – 1.7 c/kWh = 2.1 c/kWh
In this example your PEA would be 2.1 c/kWh, meaning you’d receive an increase to your base rate for that month. This would be calculated as follows:
Base rate + PEA = electricity price
or
30 c/kWh + 2.1 c/kWh = 32.1 c/kWh
Your PEA is compared to a benchmark that is set by our average customer in your distribution area – so you can see how you’re tracking compared to our other customers.
Our current customer benchmark is approximately 1.7 c/kWh. This means that on average our customers have an approximate PEA of 1.7c/kWh when compared against the market. We subtract this benchmark PEA from your initial PEA to get the amount that is adjusted from your base rate.
We regularly review how our customers are tracking and will adjust this benchmark periodically (annually) to reflect the performance of our customers.
If you can beat this benchmark PEA over a billing period, your final usage rate for electricity will be below the base rate. The better you do, the bigger your reduction.
You’ll get prompts in your app on how you can change your behaviour to be more price efficient. This webpage explains how you can set and enable price notifications in the Flow Power app.
Need more information? Click here for other FAQs on the PEA.
For any questions about the Price Efficiency Adjustment, please contact our friendly Customer Success team.