Your energy bill has four main components to it:
- Supply charges (for being connected to the grid)
- Usage charges (cost per kWh/MJ consumed)
- Discounts and incentives
- Charges (like card processing fees)
We cover supply charges and usage charges in this article.
Did you know that you are charged a fee just for having your electricity or gas connected?
These are called "Supply charges" and are charged based on the number of days you are connected in any bill period.
If your deal has a supply charge of $1.23 / day and you receive a quarterly bill (containing 92 days), you will pay $113.16 ($1.23 x 92) simply for being connected to the Grid.
The only way to avoid this charge is to go "off-grid" for electricity and/or disconnect your gas.
This charge generally comes from your Distributor (who own the poles and wires or the pipeline in the case of gas) and is passed on by your Retailer.
Most Retailers include a markup on this charge, which results in a profit to them.
How much does your electricity distributor charge? - Find out here.
These are the variable charges you pay for every kWh of electricity or MJ of gas you consume.
If you use 1,500kWh of electricity in a quarter and are charged 30c/kWh under your current deal, you will pay $450 for the amount of electricity you consumed.
Single rate vs. Time of use (Electricity)
Some electricity deals have a "fixed" rate per kWh and are referred to as "Single rate" tariffs. No matter what time of day you use electricity, the charge is the same.
In certain cases, these charges are tiered if you use more than certain amounts over the bill period.
For "Time of use" tariffs, a given day is divided up into "Peak", "Shoulder" and "Off-Peak" times.
A different charge is applied for each of the different times.
A typical Time of use offer may have the following times:
- Peak between 2pm and 8pm, Monday to Friday (excluding public holidays)
- Off-peak between 10pm and 7am, Monday to Sunday
- Shoulder at all other times
Typical charges for a time of use tariff are:
- Peak: 58c
- Off Peak: 16c
- Shoulder: 26c
These times do vary by Retailer and by offer, so the above is an example only.
If you are on a Time of use tariff, it is important to try and shift most of your usage to off-peak and shoulder rates as peak rates are really expensive (roughly double a normal "single rate")
That means not using electricity between 2pm and 8pm, Monday to Friday, if you can help it.
How Handled's app helps with this
When you send us your bill, we determine what tariff type you are on. We re-calculate your bill to check it was done correctly and then work out how much you are going to spend per year.
This annual cost estimate makes it easy to compare your current deal against other energy offers.
We use the same method in calculating how much you would spend per year if you switched to one of our group discounts or any publicly available deal.
So, you can easily see the impact of making a change.
If you're not already using our app, get it from handled.com.au