Aside from the big number at the top showing the amount owing, household bills, like electricity and gas, can be complicated.
Understanding bills can help householders manage their usage, and ultimately how much they pay, so it’s worth learning how to interpret the jargon. Knowing how to compare deals and offers between retailers is also valuable – and could save $100s.
How power and gas are measured & priced
Knowing the way power and gas is measured and charged for is the first step.
- Electricity consumption is measured in kilowatts (kW). A kW is 1000 watts of electrical power. So, if you run a 1000-watt heater for an hour, it will use 1 kWh. Electricity is priced in cents per kWh, for example, 22.56 cents per kW hour (c/kWh). So if you use 20 kWh each day, it would cost $4.51 each day.
- Gas consumption is measured in megajoules (MJ); a measure of gas equal to one million joules. In an hour, a 20 MJh appliance uses 20 MJ of energy. Gas is priced in cents per MJh hour (c/MJh).
Main features of bills & what they mean
Bills vary depending on the retailer, but they all have key details in common.
- Average daily usage: Bills usually have information about daily and total usage for the billing period, in kWh for electricity and MJh for gas, and how this compares to previous billing periods.
- Average cost per day: How much you pay each day, on average, for power or gas for the billing period.
- Charges: Breakdown of the charges on the bill, which includes the type of tariff (peak or off-peak), different meter charges, variable and fixed charges, rebates and GST.
- Fixed charges: Also known as supply charges, these are charges that don’t change, regardless of how much power or gas is used. Retailers can structure charges differently, but many link their fixed charges to the costs involved in supplying power to the home.
- Variable charges: Also known as consumption or usage charges, these relate to actual usage, such as the amount of energy consumed, charged per kWh.
How to save by switching
Electricity and gas retailers in most Australian states and territories now have to compete for your business, so they offer a range of different deals and offers. Shop around to ensure you’re getting the best deal possible. To do this:
- Look at your last bill to see how much you use and how much you pay;
- Check what tariff you are on;
- Check if you can get a better deal from your current retailer and if you will be charged exit fees for leaving.
Before you decide to change retailers
- Check the prices and how long you have to sign up for;
- Check if prices can change;
- Check if there are any fees, such as exit fees;
- Check if there are discounts and what you have to do to get them;
- Consider if it is the right offer based on your energy usage;
- Check if you will receive one bill, or a discount, if you choose electricity and gas from the same retailer;
- Check how you can pay and ask if there are any extra fees for the different ways to pay.
Reference: realestate.com.au DEWS, Qld Government.
