Understanding the “fine print” on your electricity bill
Understanding exactly what costs make up your energy bill can help you save.
Terms to know
Average cost per day – This is how much you pay each day on average for energy for this billing period.
Average daily usage – This is how much energy you use each day on average. It is measured in kilowatt hours (kWh) for electricity and megajoules (MJ) for gas.
kWh – Electricity energy consumption is measured in kilowatt hours. A kilowatt (kW) is 1000 watts of electrical power. For example, if you run a 1000 watt heater for one hour, it will use 1 kWh.
MJ – Gas energy consumption is measured in megajoules. A megajoule (MJ) is a measure of gas equal to one million joules.
Charge/kWh – Electricity usage is priced in cents per kilowatt hour, for example, 22.56 cents per kilowatt-hour (c/kWh). So if you use 20 kWh each day, it would cost $4.51 each day.
Peak and off-peak – If you choose a flexible pricing or time-of-use electricity plan, there will be different charges for peak and off-peak use.
Service to Property – A fixed charge that is also called the “daily supply charge”.
How to calculate quarterly usage
Look for the detailed charged section, usually at the back of the bill, and under the usage heading you will be able to find a summary of kWh and how many cents you are paying per kWh.
You will also find an “average use for the billing period” figure in kWh and “total for this bill”, which relates to the total amount of kWh you have used during that billing period.
To calculate your quarterly usage, multiply your average usage per day by the number of days in your billing period.
For example, if your daily average is 5.93 kWh, multiply that by the number of days billed for that quarter (91 days), so 5.93 x 91 = 540 kWh.
Remember rates vary between retailers and some quarters are usually more expensive than others, such as in the middle of winter.
The common types of tariffs
Flat rate – This is the most common type. The same rate is charged for electricity consumed at any time of the day or night.
Time-of-use – This is where a different price is charged according to when the electricity is used during the day. Time-of-use tariffs usually involve peak and off-peak pricing, which means users are charged less for electricity during 'off-peak' or low demand periods and a higher rate for electricity used during high demand or 'peak' hours. You may not be eligible for time-of-use offers – check with your retailer.
Flexible pricing – This is an extended 'time-of-use' tariff, with peak, shoulder and off-peak rates. New flexible pricing plans have some consumer-protections associated with them, unlike the older and still available 'time-of-use' plans.