Electricity Fees and Charges Explained

If there’s one thing Aussies like less than energy companies, it’s their hidden fees and charges. Unfortunately for customers, most residential electricity plans usually include a few extra fees, however many of these are avoidable. To ensure you don’t pay more for electricity than you have to, this article will walk you through the fees and charges commonly applied by electricity retailers.

10 electricity fees to look out for

Electricity fees vary across different retailers and distribution networks. In fact, some customers are not charged some fees at all. Below is a list of fees you might come across, however be sure to check these specific details with your energy retailer before you agree to sign up.

1. Connection fee
2. Disconnection fee
3. Dishonour fee
4. Cheque dishonour fee
5. Late payment fee
6. Account establishment fee
7. Exit fee
8. Credit card payment fee
9. Paper bill fee
10. Payment processing fee

1. Connection fee

A connection fee is the standard move-in fee. If you are moving to a new property that needs to be reconnected to the energy grid, then a connection fee is applied. This fee is usually in the vicinity of $10 to $50, however some retailers charge as much as $90.

2. Disconnection fee

A disconnection fee is charged when you move out and your home needs to be disconnected from the power grid. Once again, these charges can be anything from $10 to $200. Renters usually won’t have to pay this fee when they move out, as the real estate will often take over the electricity account.

3. Dishonour fee

Where a customer agrees to pay their bill via direct debit, they must ensure that adequate funds are in the designated account on the payment date. If there isn’t enough money, a dishonour fee is charged. This fee is usually around $10 to $20.

4. Cheque dishonour fee

If a customer pays their bill via cheque and that cheque bounces, a dishonour fee may be charged.  This fee is usually around the $15 mark.

5. Late payment fee

Electricity bills include a ‘due date’, which is the date which the bill must be paid by. Failing to pay your bill by this date may incur a small fee of about $10 to $50. In addition, customers on certain deals may lose their pay on time discount.

6. Account establishment fee

While it’s increasingly uncommon, some electricity retailers may charge a fee to new customers for the cost of setting up their account. This fee is fortunately relatively small, but it’s important to look out for before switching to a new retailer.

7. Exit fee

Some market contracts offered by certain energy retailers will charge an ‘exit fee’ if a customer leaves the contract within the first one or two years. This essentially locks the customer in. Luckily exit fees are fairly uncommon these days, however they can cost you a pretty penny if you get caught out. For that reason, you should always check for exit fees before signing an electricity contract.

8. Credit card payment fee

If you pay your bill using credit or debit card, you may be charged a fee between 1-3% of the amount being paid. Credit card fees are quite common and could be a significant fee for customers that often receive large bills.

9. Paper bill fee

Many companies are moving online these days. If you prefer to have a paper bill mailed to you instead of an email bill, you might have to pay an extra fee of around $2. However, some major retailers have now scrapped paper bill fees.

10. Payment processing fee

Payment processing fees are fees for… well, processing payments. Not all retailers charge this fee, but if they do, it is usually only around 0.2% to 1% of the total amount you’re paying.

How to avoid electricity fees

You can avoid some of the fees described in this article by receiving bills via email and ensuring that you pay your electricity costs in full and on time by the designated date. Also, be sure to check the funds are ready in your account to avoid a dishonour fee. With that said, some fees such as credit card processing, payment processing, connection and disconnection fees can still be difficult to avoid. Of course, you can always contest these fees with your retailer to see if they can be waived or adjusted.

Remember that fees usually vary across different electricity providers. If you believe that you’re paying too much on added fees, then shop around to see if you can find a more reasonable retailer. You can get started using Canstar Blue’s electricity satisfaction ratings and price comparison tool via the link below.

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