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How To Understanding Your Electricity Bills

This page is all about helping you understand your electricity bill 100%. Other home electricity information pages, covering areas of concern often raised by Aussie homes and businesses are,
 


Discussed on this page are the main areas of a sample Australian electricity bill. Some of these important areas are often ignored or not fully understood by electricity users. A full understanding of the electricity bill is needed as part of any home or business electricity reduction program. Other common information found on the electricity bill is summarised at the end of this page.

 

 

 

Electricity Bill With Solar NET Metering

Visit our SOLAR NET FIT METERING BILLING page, which we have created to end the confusion and mis-understandings of NET metering and billing. A common myth is that the itemised NET FIT on the electricity bill, is the quarterly total financial gain of the solar system. This is so far from the truth, with some householders forgetting the cost of offset electricity, generated by the solar system!

 

 

Electricity Bill With Peak & Off-Peak Tariffs

A simple old school electricity tariff where you are charged one rate for all appliance except those connected to the off-peak meter. A typical rate may be 25 cents for peak electricity and 15 cents for off-peak electricity used primarily for your hot water.

 

 

Electricity Bill With Tiered / Block Peak & Off-Peak Tariffs

Power Audit AdvertThis type of tariff can be described as tiered, block or quantity based. This is a tariff where the you are charged more as your total peak electricity usage increases. For example electricity at 0 to 1750kWh will be charged at 25 cents with electricity thereafter at 30 cents. There may be multiple levels of charging. Different levels and rates per kWh will be offered by different electricity retailers.

With a property on this kind of tariff, all electrical hot water heating is on a fixed off-peak tariff.

 

 

 

Electricity Bill With A Time Of Use [TOU] Tariff

Easy Explanation Time Of Use TableWhat is important to understand with this type of tariff is that all of your electricity usage will be charged at different rates based on the Time Of Day usage occurs. Large appliances such as hot water and pool pumps may be operating on timers to stop these appliance activating during the high cost electricity.

The Time Of Use tariff is often labeled as TOU on your Smart Meter. This tariff is marketed heavily by electricity retailers, as the tariff that will help you manage your electricity costs. Whilst this may be true if you understand electricity usage and costs in the first place, we would suggest you make sure you understand all the types of electricity tariffs, before making the decision to switch to this tariff from a fixed or quantity based tariff. This is because there are those householders that switch and find their electricity costs rise!

The prime reason for this rise is due to the electricity bought during the peak hours of 14:00 - 20:00 being very expensive. A typical household where the cost can rise is a young family where there is a lot of electrical activity between these hours.

We question why the TOU tariff times are still not stated on the bill, by most electricity retailers. To learn more about how this tariff works visit TOU TARIFF.

 

TOU Energy Used & Costs Table

 

 

Electricity Used & Costs - The metering used for this sample electricity bill is a Smart Meter, noted during the HOME ELECTRICITY AUDIT. The electricity tariff is TIME OF USE. The start date of the bill was 08/06/11, ending on 15/09/11. A price rise on 01/07/11 is the reason for the doubling of charges for each tariff rate. We have deleted the meter number in this case to 'Meter No.' for the purpose of privacy.

The TOU tariff has three rates, these being peak, shoulder and off-peak. The total electricity used [kWh], cost for each tariff are,

 

 

Tariff Rate

kWh Used

 

Cost

% Cost

 

Peak rate

557.30 kWh

 

$223.02

46.94

 

Shoulder rate

1202.10 kWh

 

$192.30

40.47

 

Off-Peak rate

638.40 kWh

 

$59.82

12.59

 

 

 

 

 

 

 

Totals

2397.80 kWh

 

$475.14

 

 

We have not seen the % Cost shown on any electricity bill to date. Why? This figure shows that peak electricity is accounting for almost half of the electricity costs! Surely this is important enough, when the aim is to reduce the cost or manage the electricity bill as we are told by those who want the TOU tariff in all households.

 

 

TOU Energy SAC Fees

 

 

Service And Charges - Known as SAC are the charges for the delivery of the electricity to your residence. This can be thought of as the poles and wires and other charges.

Finally these SAC costs are added to the energy used, resulting in:

Total Electricity before GST of               2397.80 kWh      $526.81

 

 

TOU Usage BreakdownUsage Breakdown - Whilst the usage breakdown shows a low use of peak electricity, when compared to shoulder, remember it's the most costly.

As mentioned before why is there no cost breakdown on a electricity bill? One may be led into a false sense of success by thinking the use of 23.24% of peak electricity is the best one can do, when in fact this same figure relates to 47% of the cost for electricity. We would say there is still room for improvement. Where peak electricity usage could be moved to shoulder or off-peak times, where possible.

 

 

TOU Average Daily Usage GraphAverage Daily Usage - This graph details the energy used in the current electricity bill, compared to the last bill. A comparison is also drawn between the current bill and the bill for same time last year.

Even though the overall cost of the electricity bill has risen, it is a good idea to know whether this is due to more usage or costs, in the first place. Whilst we cannot stop the rising costs we can address usage.

The average Aussie home is reported to use around 18 kWh to 25 kWh per day. Whilst there are many variables creating differences between homes, we can see this home has used close to this average amount. For the last couple of electricity bills and generally has decreased energy use since the same time last year. Investigating this would supply a reason why there has been a decrease in energy.

 

 

TOU Usage Comparison

 

 

Electricity Usage Comparison - This table is showing the three different TOU tariff amount of electricity consumption. Different electricity retailers may show this data in different forms, but generally it compares usage over time. Noted in this example is the less electricity used for the period of September 2011 compared to 2010, where there is a drop of 500 kWh for the month. This equating to 16 kWh per day for the same month.

 

HowToChooseAnElectricityMonitorBanner

 

 

Common Information On All Bill Types

  • NMI No. - National Meter Identifier - Your meter/s identifiers.
  • Account No. - Identifies your account.
  • Days Per Bill - The number of days this bill covers. For example 92 days.

 

 

What Needs To Be Added To All Electricity Bills For Clarity

  • The NAME of the electricity plan
  • A clear precise table of electricity tariff rates
  • Information on TOU tariff rate changes in relation to time
  • Hints & Tips for TOU management usage
  • A Summary of any changes to the billing since the last electricity bill

 

 

Electricity Bill Areas Of Concern

TOU Billing - The last reading carried over from the previous electricity bill is often noted as zero. This is confusing as is it was not zero, but the reading from your last bill. On the sample bill above those readings noted under 'this electricity bills reading' will be noted as zero on your next bill. This often makes it difficult to address real electricity usage concerns.

Block Rate / Tiered Usage Billing - We are finding a lot of users do not notice when the tiered rates change on the electricity bill. Everyone is to focused on the kWh rate. Any change in the level of usage allowed before a higher rate of electricity is charged, can dramatically effect the final cost of the electricity bill.

See this blog post A HIDDEN REASON YOUR ELECTRICITY BILL RISES for a detailed explanation.

 

 

Aussie Home Energy - Helping You Understand Your Electricity Bill

 

Helping You Reduce Usage & SAVE On Power Costs The Smart Way!
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