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Electricity Tariffs for Dummies aka. Me.

It goes to show; I don’t know much about my electricity bill, I just pay it, which is a bit irresponsible on my part particularly as electricity prices continue to increase

You see, I always assumed that at every house, electricity is split between peak and off-peak. Didn’t I get a surprise when I looked at my recent electricity bill? We don’t have separate tariffs, we have one and guess what it is? Peak.

So all those times I thought we were doing the right thing by using our dishwasher and clothes dryer late at night, made absolutely no difference. On the one hand I really should have checked, but on the other hand, I feel like I’m getting ripped off.

Electricity tariffs for dummies

So, before I put on my ranty pants and call my energy provider, I thought I’d look into the whole tariff thing a bit closer and educate myself. There’s certainly no better time than now with electricity costs rising the way they are. I’ve lost count of the number of price increase letters I’ve received. Soon we might have to turn our treadmill and exercise bike into energy producing machines or find some way to convert our chicken’s poo into electricity!

The three electricity tariffs

Ok, so here’s what I didn’t know. There are three different electricity tariffs – single rate (what I have), time of use (what I thought I had) and controlled load.

Single rate tariff

Ok, so I’m learning more and more here. A single rate tariff is just that; you pay the same rate no matter when you use the electricity and it can be called a whole plethora of things depending on who your energy provider is. Here I am thinking I’m being charged a ‘peak’ price because that’s what it says on my bill, but apparently, a single rate can be called anything from peak or anytime rate to flat rate or standard rate.  Although it is a peak price, it isn’t the highest of the tariffs as I’ll explain later.

Time of use

This tariff is the one that calculates electricity costs based on the time of the day electricity is used – peak, off-peak or shoulder. What I didn’t realise is that to be on the time of use tariff, you need a smart meter. I thought mine was smart, apparently not as smart as I thought.

Controlled load

Now, this is cool for those of you who live in colder climates and have heated floors or for people who have hot water systems that run overnight. You can have an individual meter for the appliance and you are charged at a special ‘controlled load rate’ just for that particular appliance.

electricity tarrifs

What’s better, single rate or time of use?

Now, this is interesting. Upon learning about the tariffs, I immediately assumed that time of use would be better, hands down. But what I’ve also learnt is that it depends on your ability to utilise off-peak and shoulder times as much as possible. The single use rate is usually lower than the peak rates of the time of use tariff, and so if you can’t get your peak time energy use down, you end up paying more than the single rate.

In an article by Esther Han for The Sydney Morning Herald, she suggested that a family would only start seeing savings on a time of use tariff if they were able to reduce their peak time energy usage to about 25 percent of their total electricity consumption. But this would only save them about $15 a quarter.

For my family, we tend to do a lot of the washing and clothes drying at night during peak time, and so it seems we are better off on the single rate tariff because the rate is lower than the time of use peak rate.

However, if we or anyone else, could wash during the day or run the dishwasher after 10 pm, the Time of use tariff would likely provide a lower bill.

It’s clear that it all comes down to peak period energy use. The lower you can get that on a time of use tariff, the better you’ll be.

Now that I feel like less of a dummy when it comes to electricity tariffs, I think I’m ready to find a better deal and competitive rate.

But in the meantime, where’s that treadmill?



This post has been sponsored by Alinta Energy.

Alinta Energy is an established national energy company, with a proud history dating back to 1941. They have 800,000 customers and over 400 employees across Australia. They both generate and retail electricity in Australia, which means they are able to offer extremely competitive pricing. They retail energy in Western Australia, South Australia, New South Wales, Victoria and have recently launched in Queensland.”

Eva Lewis (The Multitasking Woman)
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1 Comment

  1. November 22, 2017 / 12:17 pm

    I’ve done so much organizing of finances and insurances in the past 6 months but electricity is something I haven’t gotten to yet. I decided it would be at 2018 thing because I’m over it haha. I think there will be a bit to learn.