A tariff is the way you get charged for your energy.

Choosing the right tariff for your circumstances can help reduce what you pay for your energy.

To help you work out what’s best for you, it is important to understand:

  • what the different tariffs are
  • how they work.

Electricity tariffs

There are different types of electricity tariffs:

  • single rate
  • time of use
  • controlled load
  • demand.

Single rate tariffs

With a single rate tariff plan there are no peak or off-peak periods. This means that you pay the same rate whatever time of the day you use energy.

The rate is usually lower than the peak rates of a time-of-use tariff. This means a single rate plan could be a good choice if:

  • you are at home a lot in the evenings from Monday to Friday
  • you need to use your appliances more from Monday to Friday, like your washing machine or dishwasher.

Single rate tariffs are sometimes called:

  • flat rate
  • standard rate
  • anytime rate
  • peak rate.

Single rate tariffs are available to everyone. You don’t need a smart meter to get a single rate tariff plan.

Time-of-use tariffs

A time-of-use tariff means that the price of electricity changes at different times of the day. The types of rates available are:

  • Peak – this is when electricity costs the most. Peak rates usually apply in the evenings from Monday to Friday.
  • Off-peak – this is when electricity is cheapest. Off-peak rates usually apply overnight and on Saturday and Sunday.
  • Shoulder – this is when electricity costs a bit less than peak. Shoulder rates usually apply in-between peak and off-peak periods.

A time-of-use tariff plan could be a good choice if:

  • you are out a lot in the evenings from Monday to Friday
  • you are at home during the day or on weekends
  • you use your appliances on the weekend, like your washing machine or dishwasher.

Some retailers have even more time periods than peak, shoulder and off-peak.

Retailers will tell you the start and end times of the different periods for their time-of-use plan in the Basic Plan Information Document or the retailer's written summary of the plan.

To get a time-of-use tariff plan, you need a meter that measures your electricity usage at different times of the day. For example, a smart meter or time-of-use meter.

Controlled load tariffs

For some appliances – like electric hot water systems or slab or underfloor heating – you can be charged a controlled load tariff.

This means that the retailer charges a rate just for that appliance and the energy it uses. Often that appliance has its own meter.

This tariff is usually only used for appliances that run overnight or in off-peak times. So controlled load rates are usually lower than other rates.

If you have controlled load, it might also appear on your bill as 'dedicated circuit'. In Queensland it may be called 'Tariff 31' or 'Tariff 33'.

Demand tariffs

Plans with demand charges will have the usual usage and supply charges, but will have demand charges added on top.

Demand (measured in kilowatts or kW) is a measure of how intensely you use electricity at a point in time, instead of your usage over time. Therefore, your demand will be high when you have many appliances on at the same time.

You will need a smart meter to be eligible for plans with demand charges.

Different retailers have different ways of applying demand charges, like being charged:

  • for your highest demand in a period of time
  • an average of peak demand over a period of time
  • different demand rates in different seasons.

Gas tariffs

Gas plans are only available with single rate tariffs.

Most gas plans use tariff blocks. A tariff block is how the retailer charges you for the amount of gas you use.

This means you pay:

  • one rate or cost for the first part of your usage
  • a different rate or cost for the next part (or parts) of your usage.

Blocks can apply to:

  • daily
  • monthly
  • quarterly usage.

Some gas plans have different rates for different times of the year, called seasonal rates. These rates are usually higher in winter.