The price you pay for your energy service includes the tariff and any other fees and charges that may apply under your contract. Tariffs listed on your bill usually include GST.
Some retailers have offers or tariffs that are ‘regulated’: where the price is set by government. In the ACT, Tasmania and some of Queensland (Ergon Energy) you can ask for a contract with a regulated electricity price. In New South Wales, South Australia and South east Queensland (Energex) electricity standing offers must comply with the Electricity Retail Code's default market offer price. In Victoria electricity standing offers are capped by the Victorian default offer. Market offers or tariffs (for electricity or gas) are not capped, which means that energy retailers set all of their own prices.
It is important to understand all of the costs associated with your energy contract so that you can get the right deal for you.
Tariffs explained
Your tariff is the amount charged for providing energy under your contract. It includes both fixed and variable charges.
The fixed charge:
- is not based on how much energy you use
- will be separately identified on your bill, and is often called the ‘daily supply charge’ or ‘service to property’ charge
- can be displayed as a daily rate on your bill (for example, in ‘cents per day’) but may appear as a single figure for a billing period.
The variable charge:
- may be referred to as the ‘consumption charge’
- is the amount you pay for each unit of electricity and gas you use
- is listed on your bill as cents per kilowatt hour (c/kWh) for electricity and cents per megajoule (c/MJ) for gas.
It is important to note that different variable charges might apply in the one bill:
- depending on how much energy you use. With some offers, the first block of energy used is the cheapest, with any energy used over that charged at a higher rate. However, other offers may charge a higher rate for the first block, with extra energy charged at a cheaper rate
- if you live in a house that has certain appliances that are separately metered and operate overnight, for example storage hot water systems or slab heating. You may see this listed as an off peak tariff on your bill. These off peak tariffs are normally cheaper as electricity demand is lowest overnight
- if you elect to have renewable energy or GreenPower added to the cost of your electricity or gas. This can be charged as a higher variable usage price but sometimes can be included as a fixed amount (per week, or billing period etc)
- according to when you use your electricity and gas. For example, if your electricity meter records when you use electricity (rather than just the total amount used) you can be charged different prices for electricity used during the day, at night and on weekends. Some gas tariffs also change depending on the season; charging different rates in winter and summer
Tariffs and your bill
The variable and fixed charges that make up the tariff are usually listed on the second page or on the back of a one page electricity or gas bill. Look in the section where the cost of your bill is calculated.
Energy tariffs can change during a billing period. Your retailer will provide you with written notice of this change, usually with or on your next bill. If this happens your bill will show you the amount of energy used at the old tariff rate and the amount of energy used at the new tariff rate. If you are unsure about the information on your bill you should contact your retailer.
Fees and charges explained
Energy contracts can include a number of fees and extra charges. The following are examples of the types of fees that may apply to your energy contract:
- An establishment fee for setting up your contract
- A termination fee for leaving your contract early – this can vary depending on how much of your contract is left
- A payment processing fee, for example if you pay by credit card
- A fee if you have insufficient funds in your bank account when a direct debit payment is due
- A late payment fee if you pay your bill late
- Disconnection or reconnection charges if you request an extra or special meter reading
When they are charged your retailer will typically list these fees and charges separately on your bill. If you are unsure about any fees that appear on your bill talk to your retailer.
Basic Plan Information Documents
In states and territories which have commenced the National Energy Retail Law energy retailers are required to have Basic Plan Information Documents for each of their offers. These documents help you compare offers by requiring all retailers to present information on their offers in the same way. They set out the prices, fees and charges and contract details that apply to each offer.
In states and territories that have commenced the Retail Law, you can also obtain Basic Plan Information Documents from the AER’s Energy Made Easy website when you search for offers available to you.