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    Electricity and Gas Tariffs Explained

July 2019

So you can understand your energy bill, you’ll need to know a thing or two about tariffs. Here are some definitions to help.

Single rate tariffs. Block rates. Controlled loads. Feed-in tariffs. There may be words and phrases on your energy bill that you haven’t come across before. The good news is that learning the language of energy is easy – and we’re here to help.

Below you’ll find some of the words and charges you might come across on your energy bill.

What are the different charges on my bill?

On your electricity bill there are different electricity charges. They can generally be broken up into:

  • Supply charges/Daily Supply Charge/Service To Property Charge – this is the cost to supply electricity to your property. On the Red Energy bill, it’s called the ‘service to property’ charge and is calculated by multiplying the number of days in the billing period by a fixed rate.
  • Usage charges – this is where tariffs come into play. These charges are for the amount of electricity you have consumed during the billing period and are generally calculated in cents per kilowatt hour.

Types of electricity tariffs

In its simplest terms, an electricity tariff is the pricing structure or formula used to calculate how much you pay for the energy you use. Depending on your energy provider and where you live (each state is different), there may be different types of electricity tariffs:

  • Single rate tariff (also called flat rate, standard rate or anytime rate) – as its name suggests, a single rate tariff has one rate, day and night. You pay the same rate for your electricity at all times of the day.
  • Time of use tariff – with this tariff, you are charged different rates for energy usage that occurs at different times of the day, using a smart meter. Your energy retailer can tell you the times your peak and off peak rates apply. Generally, this tariff will include:
    • A peak rate – this is when electricity costs the most
    • An off-peak rate – this is the cheapest rate,
    • A shoulder rate – this rate is between the two.
  • Block rate tariff – you’re charged one rate for an initial block of energy usage, and then a lower (or sometimes higher) rate for subsequent blocks.
  • Controlled load/two-rate tariff – this is where you have a separate tariff (usually with lower rates) for an appliance that consumes a lot of energy, like a hot water system.
  • Feed-in tariff – this comes into play if you have solar panels that produce excess electricity to your needs and this electricity is fed into the grid. You get a credit for each kilowatt hour of energy you supply to the grid.

Types of gas tariffs

Things are a little simpler when it comes to gas tariffs. Gas only comes as a single rate, with most retailers offering tariff blocks that work in the same way as electricity block rates – that is, you pay one rate for the first block of usage and then a different rate for the remaining usage.

The final word

A tariff is a formula used to calculate how much you pay for your energy consumption, with different tariffs available depending on where you live and the energy provider you use. If you live in QLD, NSW, VIC or SA and would like to know what Red Energy tariffs looks like in your area, visit redenergy.com.au/quote.

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