Your energy tariff can have a big impact on how much you pay for electricity every month.
Here’s the lowdown on electricity rates and tariffs, and what it all means for you.
A tariff is an electricity pricing structure offered by energy retailers. It’s made up of two types of charges: a rates charge and a supply charge (different tariffs apply to solar). These make up the main components of your bill.
• Rates. Rates are variable charges based on your actual electricity consumption. They are calculated in cents per kilowatt hour (c/kWh) and may be divided into peak, off-peak and shoulder (the time between peak and off-peak) rates.
• Supply charge. Also known as a ‘fixed’ or ‘service’ charge, this covers the costs associated with supplying electricity to your home or business.
When it comes to energy plans, there are three different types of tariffs offered by energy retailers:
• Single rate. With a single-rate tariff (also known as ‘flat rate’ or ‘standard rate’), you are charged the same rate for electricity throughout the day and night. There is no distinction made between peak and off-peak periods.
• Time of use. A time-of-use tariff offers different rates for electricity depending on the time of day. These may include rates for:
o Peak period. This is the time when electricity charges are the highest, usually during the evening from Monday to Friday.
o Off-peak period. This is the time when electricity rates are the cheapest, usually during weekends and overnight from Monday to Friday.
o Shoulder period. This is the time between peak and off-peak. The rates are slightly cheaper than at peak periods, but more expensive than off-peak.
• Controlled load. A controlled load, aka two-rate, tariff is an electricity rate tied to a specific appliance – for example, an electric water heater and may only be available during certain hours of the day.
As you compare providers, keep in mind that different energy plans will be available depending on where you live and the type of meter you have on your property.
Want to save even more money on your energy bill? Compare plans from some of Australia’s leading energy providers, or call 13 92 82, and let us find you a great electricity and gas plan with the features you want and rates you can afford. Best of all, you won’t pay a cent for our service.