Understanding energy bills

Your bill shows the costs of supplying power to your home or business. Network and metering charges are among these costs. 

The average annual bill comprises: 

• Wholesale electricity costs charged by generators 
• Retail charges 
• Environmental policies set by governments 
• Transmission network costs 
• Distribution network costs 
• Metering charges. 

Know how much you’re spending and why. This will show whether you are with the right retailer and on the right plan for your needs. Here are key things to check on your bill: 

Daily supply charge 

This is a fixed, daily rate. It includes the cost to operate, maintain and manage the network of poles, wires, and smart meters that deliver electricity to your home. Supply charges are regulated by the Australian Energy Regulator and set annually. On average they account for less than 30 per cent of your total electricity costs. 

Usage charges 

These are based on the amount of electricity you consume in your home. They can vary by season, whether or not you have solar, and how energy efficient your appliances are. Variable charges are set by your retailer. They are based on the type of energy plan you are on and when and how you use electricity. This is where your actions have the most impact on reducing your bill. 

Are you paying the correct amount? 

As a Victorian resident, you can ask an energy retailer for the Victorian Default Offer. This is a maximum flat rate set by the Essential Services Commission for people unable or unwilling to engage with the retail energy market. 

The default offer will not necessarily be the lowest price available. However, you can compare it against energy plans offered by energy retailers. 

Remember, it’s good to shop around to make sure you’re getting the best offer. The Energy Compare website uses your details to find the best energy deal. 

What to consider when choosing a plan 

There are a range of factors that are important to consider, including: 

•  the length of the contract period 
•  fees the retailer may charge 
•  discounts or special deals the retailer may offer 
•  the best tariff to suit your electricity use 
•  if you prefer electricity generated by renewable energy sources 
•  if you have a rooftop solar system and want to export electricity to the network 
•  behaviour changes/seasonal changes.