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Electricity Tariffs and Charges in Australia Explained
Find out what electricity tariffs are in Australia, what they're made up of and the kinds of tariffs your provider charges your energy usage at. Read now.
A tariff always determines the price of your electricity bill. This tariff, along with other associated fees and charges, is always reflected in your bill amount and is defined by your chosen contract. While different states, as well as different energy providers, will have different tariff rates, it's essential that you understand exactly what your agreement has outlined to ensure that you're getting the best price from your electricity provider.
Today, our HOOD team will explain what electricity tariffs and charges are and how they work, so you can easily understand your next electricity bill.
What Is A Tariff?
Your tariff is how you're charged for your electricity usage by your energy provider. These tariffs can change depending on the season or time of day that your electricity usage occurs. Your tariff can also fall within a different rate for daily 'blocks' of electricity usage.
When looking at your energy bill, you can find the variable and fixed charges that form your tariff on the second page or the back of a one-page statement in the section where your chargers are calculated. It's also important to remember that these tariffs will change between each billing period; however, your retailer will also notify you of these changes.
It's important to understand that not all states will follow the same tariff rates. In some states, retailers have tariffs that the government regulates. For example, a regulated electricity price will occur in ACT, Tasmania and some parts of QLD. However, in states like NSW and Southeast QLD, electricity prices and tariff rates must comply with the Electricity Retail Codes default market offer price. While for VIC, electricity prices and tariffs are capped by the Victorian default offer. There is no capping limit for market offers and tariffs, meaning that energy retailers can choose their tariffs and set their own rates.
Different Types Of Electricity Tariffs And How You're Charged?
Your electricity bills will always be comprised of a fixed charge or variable rate. A fixed amount or supply charge is usually called a daily supply or service to property charge. If your home is connected to an energy distribution network, you'll have to pay the price in cents per day, regardless of your usage. Variable charges, on the other hand, are commonly referred to as usage or consumption charge. This is the amount you pay for each unit of electricity used, which is generally listed as cents per kilowatt (c/kWh) for electricity usage.
Within these two tariff charges, you'll also encounter several common tariffs, which can include:
- Single rate: This tariff will include a rate that stays the same no matter the time of your energy consumption. It's also known as peak, demand, standard or flat rate, depending on your state and electricity provider.
- Time of use: This tariff will include various rates that will change depending on the time of day your usage occurs. This tariff will generally outline higher rates in the afternoon and early evening periods and cheap rates late at night and early in the morning.
- Block rate: The price of your electricity will increase or decrease with each daily or quarterly block of electricity used. This is also the only tariff used for gas usage.
- Controlled load: If you have a large household appliance like a hot water system, this will be metered separately from the rest of your home's usage. The rate for these larger appliances will often be at a lowered rate, with electricity only being supplied in off-peak hours.
- Feed-in tariff: This tariff is used for homes with solar panels and will receive a small credit for each kWh of electricity their solar panels produce and send back into the primary electricity grid.
It is crucial to remember that not all of these tariffs will be available in all states. With regulated rates in some states, not all of these tariff rates will be applied to these government-run energy providers. Customers may also need a particular meter to accurately record their usage to match the requirements of specific tariffs, like time of use tariffs.
Tariffs and Your Electricity Bill: Fees and Charges Explained
Along with all electricity bill charges, tariffs will also come with additional fees. These should always be stated on your bill and listed separately from your usage charges. The most common types of fees and charges that are the most common to be found in your billing include:
- Establishment fees for setting up your contract
- Termination fees for those that leave their provider before their contract end date. The cost will change depending on how much of your contract is left over at your time of termination.
- Payment processing fees usually happen if you pay through a credit card.
- Insufficient fund fees when a direct debit is due.
- Late fee if your bill payment is overdue or paid past your due date.
- Disconnection or reconnection fees if you request an extra or special meter for your home.
Find The Right Energy Provider For Your Needs With HOOD
If you want to make the switch and find a tariff rate that fits your needs, HOOD can help! Whether you want to find an energy retailer for an urgent power connection or enjoy more accessible customer services, contact us with your inquiry, and our team will help you as soon as possible.