How do energy fees and tariffs work?

Tariffs determine how you get charged for energy. Find out which tariff you’re on using your energy bill.

What are tariffs? Learn here
What are the different types of tariffs? Types of tariffs

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TARIFFS & FEES EXPLAINED

What are tariffs?

Tariffs are prices set on your energy as it's provided to ensure that the providers are making their money back.

There are tariffs that apply to the inherent cost of electricity and delivering that electricity, and there are tariffs that apply to how much of that electricity you use.

Where does my bill show these rates and tariffs?

On your bill where there is information about "how much energy you used" and "how much it costs", there should be tariff rates and further information.

There may also be information about how your final bill was calculated, which may include "usage and supply charges". These are tariffs.

What are the different types of tariffs?

There are two main types of tariff — single rate and time of use. However, there are other tariffs you'll see on your bill, which we explain below.

Single rate

Applies to: All energy usage.

Price structure: You pay the same rate for energy at all times, no matter when you use it.

Good for: People who are home a lot during weekday evenings.

Time of use

Applies to: All energy usage.

Price structure: Energy prices change depending on usage time: peak, off-peak or shoulder.

  • Peak: 3pm - 9pm weekdays. Highest rates.
  • Off-peak: Typically overnight and on weekends. Lowest rates.
  • Shoulder: In between peak and off-peak periods. Rates fall somewhere in the middle.

Good for: People with a smart meter that use energy mostly during the morning/early afternoon, or are out on weekday evenings.

Controlled load

Applies to: Energy usage for a single appliance, e.g. a pool or water heater.

Price structure: Lower energy rates for a single appliance, but usually caps how many hours of power it gets.

Good for: People with particularly energy hungry appliances like electric hot water heaters.

Block tariff

Applies to: All energy usage (but more common for natural gas).

Price structure: Usage rates change once you've passed a certain threshold of energy usage for the day. There can be more than one threshold.

Good for: People with high gas or energy consumption that might benefit from lower rates in later blocks.

Feed-in tariffs

Applies to: Excess solar power.

Price structure: Any solar power that you produce which you feed back into the grid will be subtracted off your bill at the feed-in tariff rate.

Good for: People with solar panels.

Demand tariff

Applies to: Supply charges.

Price structure: This is an additional premium added onto your regular supply charges. It's calculated based on your maximum energy usage at one time rather than your average use.

Good for: Nobody. Some types of plans have mandatory demand tariffs to compensate for huge energy use spikes.

Regardless of Single Rate or Time of Use, you'll see these charges on your bill:

Consumption charge:

This is also known as a "usage" charge and is the amount you are charged per unit of energy, whether kilowatt hours (kWh) for electricity or megajoules (MJ) for gas.

  • Single rate tariff = A consumption charge that doesn't change based on time.
  • Time of use tariff = A consumption charge that does change based on time.

Daily supply charge:

This charge is there to make sure that each link in the energy chain – from generation to light switch – is kept alive and functioning. Once generated, electricity must be transported and converted many times along an intricate infrastructure of power poles, wires, transformers, substations and more. This infrastructure must be maintained and administered to, which requires customer-based funding at the end of the chain: and that means you. The other names of the tariff also provide clues to its purpose: "service charge", "daily supply charge" or "service availability charge".

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Who sets and regulates tariffs?

Gas and electricity tariffs, as well as those for other services such as transport, are regulated by the Independent Pricing and Regulatory Tribunal (IPART). IPART is open to any and all groups to submit recommendations for the pricing of utilities including consumer groups and energy suppliers.

State-based ombudsmen are not responsible for investigating tariff fluctuations or price hikes to energy charges, but they are responsible for ensuring that these tariffs are applied accurately to customers' usage.

What other types of fees are there?

  • Establishment fee. This is often paid to set up your initial connection.
  • Early-exit fee. Some contracts make explicit mention of having no early-exit fees. This a flat fee that must be paid if you leave your contract earlier than the agreed upon date. These can cost anywhere between $40-$100.
  • Late-payment fees. Paying your bill late or having insufficient funds for a direct debit can result in extra charges on your next bill.

Video: How to use tariffs and fees to compare energy


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2 Responses

    Default Gravatar
    BrianOctober 19, 2016

    Does Alinta gas have any concessions for pensioners?

      Avatarfinder Customer Care
      HaroldOctober 19, 2016Staff

      Hello Brian,

      Thank you for your question.

      Unfortunately, gas is not listed as one of the concessions of a pensioner. If you wish to learn more, you can read our seniors card guide and be informed about the discounts and other privileges of a pensioner.

      Cheers,
      Harold

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