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Understand your energy bill
The best way to manage your energy use and keep bills to a minimum is to measure your current energy use and then take targeted steps to reduce it, monitoring your progress over time.
Understanding your energy bill will help you manage and use energy more efficiently. When you adopt energy saving measures around the home you can see whether they're having an impact on your overall energy consumption by comparing your bills—and then adjust your habits to save even more.
The following information will help you interpret the information on your bill so you can get started.
To understand your bill it helps to understand the way power is measured.
- Electricity is usually measured in watts—one watt is equivalent to one joule of energy per second. A kilowatt (kW) equals 1,000 watts. A megawatt (MW) equals 1,000 kilowatts.
- The amount of electricity used over a certain time period is typically given in kilowatt hours (kWh). In one hour, a 500 watt appliance will consume 500 watts or 0.5 kWh of energy.
- Gas is measured in megajoules per hour (MJ/h). A megajoule is 1,000,000 joules.
- The amount of gas used by an appliance over time is measured in megajoules. In one hour, a 20 MJ/h appliance uses 20 megajoules of energy.
The features on electricity and gas bills vary depending on who your retailer is—but all bills have key details in common. The important terms to understand are:
- Average daily usage. This is measured in kilowatt hours (kWh) for electricity and megajoules (MJ) for gas. To get an idea of how much electricity your household uses your bill should have information on your daily and total usage for the billing period, and how this compares to previous periods. To get a general idea of how your household energy usage compares to households of a similar size in your area you can use the tool on EnergyMadeEasy.gov.au.
- Greenhouse gas emissions. The greenhouse gas emissions from the energy used—usually measured in tonnes and illustrated on some bills by a line or bar graph. The average Australian household emits around 14 tonnes of greenhouse gases a year, including personal transport and the decay of waste in landfill.
- Charges for this bill. The breakdown of the charges in your bill. This includes the type of tariff (e.g. peak or off-peak), different meter charges, variable and fixed charges, rebates and GST.
- Fixed charges (supply charges). These are daily charges that do not change regardless of how much energy is used by that particular household. Although each retailer can structure their charges differently, many retailers link their fixed charges to the costs involved in supplying power to your home.
- Variable charges (consumption charges). Relates to usage—the amount of energy consumed by that particular household charged per kWh.
- Renewable energy tariffs (GreenPower). Additional charges for households that have signed up to support electricity to come from renewables such as solar, wind or biomass. You pay extra for GreenPower. Available through most energy retailers—look for the GreenPower logo to ensure its part of the government accredited program.
Time-of-use tariffs. Retailers can offer different pricing arrangement for electricity depending on the time of day—this is usually divided into peak, shoulder and off-peak. An interval or smart meter is required to access this type of tariff. Check to see if your retailer offers this option.
- Off-peak hot water. For electric hot water systems. Conditions apply, including a special meter. Check to see if your retailer offers this option and that it suits your type of hot water system.
- Inclining block tariffs (IBTs). Some energy retailers split energy use into blocks with different pricing up to a defined threshold or limit. The first block from 0 (zero) up to a set limit (e.g. 1,500kWh) is priced at a lower level. The second block (e.g. from 1,500 to 3,000kWh) costs more. This pricing structure will be shown on your bill (if used by your energy retailer) and provides an incentive to keep energy use down.
- Declining block tariffs (DBTs). Declining block tariffs are similar to IBTs, but charges for the first block are highest and gradually reduce based on the level of energy used.
- Demand/capacity tariffs. In some areas, demand or capacity tariffs are being introduced which base the network charges of your bill on the maximum demand or capacity used, either on a kW or KWh basis. On this tariff you would usually be charged for your maximum demand during a specified peak period (e.g. between 3-9pm) over a particular timeframe (e.g. monthly, seasonal or annual). An interval or smart meter is required to access this type of tariff.
If you want to know more about how your bill is calculated see the Australian Government fact-sheet (206KB PDF). EnergyMadeEasy has detailed information for households on understanding your bills, the energy market and contracts.
The costs included in your electricity bill are made up of four components:
- Generation costs—generating electricity at a power station.
- Network costs (transmission and distribution costs)—building and maintaining the network infrastructure (poles and wires) that deliver electricity to homes and businesses.
- Retail costs—connecting customers, billing customers, managing accounts and covering the costs of managing fluctuations in the wholesale price of electricity.
- The cost of government schemes such as the Renewable Energy target and state and territory feed-in tariff schemes.
Generation and retail costs are generally set in competitive markets where different companies compete for customers through offering cheaper, more appropriate or more innovative products. As networks are monopoly businesses, network costs are regulated by independent regulators.
The rates you pay for electricity and gas depend on where you live in Australia. Energy is an essential service and there are a range of consumer protections in place for households. These include general consumer protection laws and state and territory energy laws, as well as the protection of energy consumers under the National Energy Customer Framework (operating in all states and territories except Victoria, Northern Territory and Western Australia).
In most states and territories, residential and small business customers have access to two types of contracts a standard retail contract and a market retail contract. You can ask your energy retailer if you're not sure what type of contract you are on.
Standard retail contracts have terms and conditions set by law that cannot be varied by a retailer.
Market retail contracts also include some standard terms and conditions, but retailers can tailor these energy offers by offering you discounts and other incentives. It’s important to be aware of any additional terms and conditions such as fixed terms and exit fees. Market retail contracts may also include renewable energy (like in-home solar power).
By shopping around you may be able to save money on your energy bills.
Energy is an essential service and there are laws in place to provide customer safeguards.
If you have agreed (verbally or in writing) to a market retail energy contract with an energy retailer, they must provide you with a printed summary of their contract offer. The product disclosure statement, known as an Energy Price Fact Sheet, is required to include the following information:
- all applicable prices
- early termination payments and penalties
- date and duration of the contract
- billing and payment information.
It’s important you read and understand all the terms and conditions of your contract as it will contain information about the price you pay for energy, any fees and charges that may apply to you, the duration of the contract, and other important information relating to your rights and obligations as an energy customer.
To avoid any unpleasant surprises down the track, make sure you’re aware of all the terms and conditions of the retail energy contract before you agree to it. Asking a trusted family member or friend to help you review the details can be helpful.
Any time you enter a new contract you have a 10 business day ‘cooling off’ period in which you can decide not to go ahead without being charged a fee. If you change your mind, contact your energy company immediately.
If you think your bill is incorrect you should contact your energy retailer immediately. An energy retailer must review a bill if requested by a customer.
If you’re still not happy, you can talk to the energy ombudsman in your state or territory. An ombudsman is a free and independent dispute resolution service. You can refer to our list of resources below. You can also get more information from the Australian Energy Regulator online or by calling 1300 585 165.
A disconnection notice can be sent from your energy retailer for a range of reasons, but most commonly it will be caused by an issue with your bill payment. There are some restrictions on when disconnections can occur. For example, in most circumstances you cannot be disconnected during a protected period, such as on a weekend or public holiday. There are also additional provisions that limit disconnections for customers experiencing hardship and those premises registered as having life support equipment.
If you receive a disconnection notice, you should contact your energy retailer immediately to discuss your options. Their contact details will be on the disconnection notice.
Some states and territories have help for people having difficulty managing energy bills, or for people with specific medical or mobility issues. For example, you may be eligible for the Essential Medical Equipment Payment.
Your energy retailer should also have a hardship policy for those people experiencing financial difficulties. If you think you will be unable to pay your bill on time or have had difficulty paying a bill in the past, you should contact your energy company by phone or email as soon as possible to discuss how they can help you. You can request a copy of your energy retailer’s hardship policy which they must provide to you upon request.
If you’re on a fixed income you can arrange with your energy retailer to have smaller amounts regularly deducted (usually weekly, fortnightly or monthly)–be sure to check with your energy retailer that there's no increase in the rate you'll be paying for energy. If you’re receiving a payment from Centrelink ask about the free Centrepay service to help you to better manage your finances, spreading out the costs of seasonal changes to your energy use. The MoneySmart budget planner can also help with managing costs.
To find out more information on what assistance you can receive contact your energy retailer or the state or territory government department responsible for energy in your area. You can also use the yourenergysavings.gov.au rebate searcher. This has summaries of all energy and sustainability rebates and assistance offered by the Australian and state and territory governments.
The EnergyMadeEasy website also has a range of information to assist you if you have a complaint or are experiencing difficulties.
Energy and Water Ombudsman
- ACT Energy & water Australian Capital Territory Civil and Administrative Tribunal
- NSW Energy & Water Ombudsman
- NT About us Ombudsman NT
- QLD About energy and water suppliers Energy and Water Ombudsman Queensland
- SA Energy & Water Ombudsman SA
- TAS Energy Ombudsman Tasmania
- VIC Energy and Water Ombudsman
- WA Energy and Water Ombudsman Western Australia
Government consumer and fair trading agencies
- ACT Fair Trading ACT Government
- NSW Fair Trading NSW Government
- NT Northern Territory Consumer Affairs
- QLD Consumer rights, complaints and scams Queensland Government
- SA Consumer and Business Services contacts Government of South Australia
- TAS Consumer Affairs and Fair Trading Tasmanian Government
- VIC Consumer Affairs Victoria
- WA Consumer Protection Government of Western Australia
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