How do price spikes work if I don't have a smart meter?

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Price spikes are times when the wholesale price is really expensive - in most states, the maximum wholesale price is around $19/kWh (inc. GST).

Customers with smart meters are able to avoid price spikes by shifting their usage earlier or later in the day - that's because their smart meter can record exactly how much (or how little) power they used during a spike.

If you have a basic meter, it's impossible to tell how much power you use during price spikes. That's because your basic meter only tracks your total usage between reads, but doesn't track the times when you used power.

In practice, the energy market operator charges us for your usage by estimating the times when you used power based on what's typical in your area. If people in your area typically used some power during a spike, you'll be charged as if you did too.

This usually means that you can expect to get a higher than normal bill for your usage in January - the month when price spikes are most common. For most people, this bill will be $80 - $100 more expensive than usual.

There's still one big reason to reduce your usage during price spikes

Some of the most polluting and expensive generators in Australia exist purely to capitalise on stretched supply, charging exorbitant prices to bring the grid into balance. This is what leads to price spikes.

By reducing your usage during price spikes you'll be helping out the stability of the grid - and helping to keep more money out of the pockets of these expensive and dirty generators.

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