Understanding electricity costs can be challenging, especially with various pricing options and discounts in the retail market. The overall price reflects contributions from several key entities involved in delivering electricity to your home: generators, distributors, and retailers.
Generators: These companies produce electricity using various sources, such as fossil fuels, nuclear, wind, and solar. The cost of generation can fluctuate based on fuel prices, demand, and the types of power plants in use.
Distributors: Local companies manage the delivery of electricity from substations to homes and businesses. This includes costs related to local poles, wires, and equipment.
Retailers: These companies sell electricity to consumers, setting prices that may include various fees, taxes, and profit margins. Retail pricing can vary widely, with options like fixed rates, variable rates, and time-of-use pricing.
Key Components of Your Electricity Bill:
- Cost of Electricity: Charged per kWh based on your usage.
- Network Charges: Costs for transmitting and distributing electricity, including:
- Daily Charge: A fixed fee for having electricity connected (often called Supply Charge or Service Charge), regulated by the Australian Energy Regulator.
- Retail Margin: The cost added by retailers for selling electricity.
- Government and Market Charges: Fees related to regulatory bodies like AEMO.
- Environmental Scheme Costs: Charges for national and state schemes (e.g., LRET, SRES, VEET).
Together, Retail Margin, Government Charges and Environmental costs described above will make up the Charge per kWh on your invoice, while you will often see the Daily Charge aspect of the Network Cost separately on your invoice.
The Usage charges are reflective of the energy you are using for the period of your invoice, and depending on your site arrangement, may appears as a single Flat Rate, or a combination of Peak, Off-Peak and/or Shoulder rates. Each rate reflects a different time of use period for your energy.
The components of your Electricity invoice can be found on the page of your invoice illustrated below, be sure to take note of the Supply Period, which reflects the period of time your usage charges are being invoiced for:
