To ensure you’re getting the right deal from your energy provider, it’s important to understand electricity usage charges. These rates form part of your electricity tariff – the amount charged for providing energy to your home under your contract, and will make a big difference to what you pay. So, let’s dive into the details of what you need to know.
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What is an electricity usage charge?
An electricity usage charge, also previously known as a consumption charge or variable charge, reflects the cost of the electricity you use in your home. In other words, it’s the amount you pay for each and every unit of electricity that your household consumes each and every day. Every kWh is added up and calculated for your next monthly or quarterly bill.
Where do I find the usage charge on my bill?
An electricity usage charge is shown as cents per kilowatt hour (c/kWh). It’s typically noted on the second page or on the back of your bill. Here’s an example of a bill and the electricity usage rates it entails:
Electricity usage charges in Australia
So, what do electricity usage charges actually look like, and what could you expect to pay for every kWh of power you use? To offer a guide, Canstar Blue has calculated the average usage rate per kWh for single-rate tariffs across each distribution network in New South Wales, Victoria, south-east Queensland, South Australia, the Australian Capital Territory and Tasmania. Prices are shown in cents per kWh.
| State | Distribution Network | Average Electricity Usage Rate (per kWh) |
|---|---|---|
| NSW | Ausgrid | 35.7c/kWh |
| NSW | Endeavour Energy | 37.2c/kWh |
| NSW | Essential Energy | 38.9c/kWh |
| VIC | AusNet Services | 35.8c/kWh |
| VIC | Citipower | 26.7c/kWh |
| VIC | Jemena | 30.7c/kWh |
| VIC | Powercor | 30.4c/kWh |
| VIC | United Energy | 29.3c/kWh |
| QLD | Energex | 31.4c/kWh |
| SA | SA Power Networks | 45.3c/kWh |
| ACT | Evoenergy | 26.6c/kWh |
| TAS | TasNetworks | 29.5c/kWh |
Source: www.canstarblue.com.au – 09/10/2023. Average electricity usage rates based on non-solar only plans on Canstar’s database for each respective rate type (single rate and controlled load), available for annual usages based on the reference usage amounts for each distributor: NSW, VIC, QLD and SA per AER, VIC per Victorian Default Offer, ACT per ICRC, TAS per median usage in the Office of the Tasmanian Regulator’s report, Typical Electricity Customers in Tasmania 2022. In Queensland, the tariffs are more commonly referred to as tariff 11 (single rate), tariff 31 (controlled load 1), and tariff 33 (controlled load 2). In Tasmania, the tariffs are more commonly referred to as tariff 31 (single rate) and tariff 41 (controlled load).
As you can see, South Australians generally pay the highest kWh in electricity usage charges, while the average rates are usually much lower in the other states. Households in the ACT and Victoria typically pay the lowest usage charges.
Energy deals with cheap electricity rates
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Why is there more than one electricity usage charge on my bill?
Some bills might show more than one usage charge, as with the example shown above. This is because they reflect all applicable tariffs and might be broken down into different time periods – depending on factors like your supplier or distribution network:
- Single rate tariff: usually called anytime, peak, flat or standard rate on your electricity bill, and this is typically your main tariff
- Time of use tariff: includes peak (usually weeknights where electricity costs the most), shoulder (rate that is less than peak) and off-peak (cheapest rate overnight on weekends)
- Controlled load tariffs: separate metered tariffs charged at a lower price
Controlled load tariffs see households charged a lower rate for things like hot water systems and pool pumps. This might be listed as an off-peak charge, which is typically a cheaper rate because electricity demand will be lower overnight.
In our example bill, the household has a controlled load tariff (CL2) in addition to its ‘Anytime’ or main supply. This is rather typical of many Australian households.
Who sets electricity usage charges?
Electricity usage charges are set by individual retailers, or by state governments, depending on whether you live in a state with a deregulated electricity market or not. In Victoria, NSW, SEQ and SA, electricity retailers are free to set their own usage charges, along with various other rates and terms. They purchase electricity from the National Electricity Market (NEM) and add their own charges to cover costs, like any business. The Goods and Services Tax (GST) is also added to electricity usage charges, plus any state-based government expenses.
Meanwhile households in Western Australia, Northern Territory, Tasmania and regional Queensland have their electricity usage charges set by their respective governments. Energy prices in these areas remain regulated. Price regulation – and the pros and cons of it – remain a huge political talking point, with some arguing that competitive electricity markets – whereby retailers are allowed to set their own rates – have not been beneficial to consumers.
When do electricity usage charges change?
In most areas, electricity retailers set their own usage charges and can change them whenever it likes, provided the customer is on a variable rate plan and they’ve been given notice. Customers on a fixed rate energy plan see their usage charges locked in for a set period. In terms of when prices change, this depends on factors like the particular provider and location.
Some electricity retailers change their prices on a regular basis, but as a general rule, usage and supply rates are amended every 12 months – in July in most areas. However, given that providers in most areas are free to change their prices whenever they like, it’s important to keep an eye on your bills and on any other communication from your provider because it could include some important information about price changes.
To help you start comparing energy providers and plans, click the link below to see our comparison tool.
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