Tariffs and fees on electricity and gas

Find out how tariffs work on your energy bill

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?

Here are two main types of tariff options you have:

Time of use.

This kind of plan does not distinguish between peak and off-peak periods. The rate you're charged tends to be lower than the peak period rates for other tariffs, and is a good choice if you're home a lot during weekday evenings.

This tariff splits the day up into three different periods, each with their own rate: peak, off-peak, and shoulder.

  • Peak is the most expensive, applying to weekday evenings.
  • Off-peak electricity is the cheapest, applying to Saturday and Sunday late nights.
  • Shoulder charges apply in between the other two periods, and are slightly cheaper than peak rates.

Single rate

This kind of plan does not distinguish between peak and off-peak periods. The rate you're charged tends to be lower than the peak period rates for other tariffs, and is a good choice if you're home a lot during weekday evenings.

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

Daily supply charge:

This tariff 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".

Consumption charge:

These tariffs are also known as "usage" or "consumption" charges and are the amount you are charged per unit of energy, whether kilowatt hours (kWh) for electricity or megajoules (MJ) for gas. You can find the cost of these tariffs for your area online. The rates for these charges are established yearly.

Additional costs to understand

These terms aren't as common, but some plans will state the following:

Controlled load

This applies to a single appliance, e.g., a pool, rather than your entire electricity use. Controlled load rates are usually lower than other rates, and are calculated by an energy meter attached to the appliance.

Demand

This tariff is applied on top of regular supply charges. It is applied to your maximum usage of energy at a point in time rather than your entire usage averaged out. Demand charges rise when you have many appliances running at once.

A feed-in tariff

This is the rate of money you get from committing electricity to the grid from your solar panel setup. Currently, retailers in Victoria pay roughly 6.2 cents per kilowatt hour, New South Wales between 5.1-8.0 cents, Australian Capital Territory between 6.0–7.5 cents, Queensland 6.0-12 cents, Tasmania 5.55 cents, South Australia 5.3 cents, Northern Territory pays the same feed-in as the consumption rate and Western Australia has a variable rate

Stepped-rate or blocked tariff

These tariffs step up in their cost once you pass a certain threshold of kWh or MJ usage. Depending on the specifics of the deal, the costs on the subsequent usage thresholds may even go down past certain points.

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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.

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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 agreed upon. 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.
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2 Responses

  1. 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. For discount and other privileges of a pensioner please check this page for your guide and reference.

      Cheers,
      Harold

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