Understanding gas and electricity charges

The gas and electricity tariff has two parts:

  • daily supply charge, and
  • usage charge.

The daily supply charge

The daily supply charge is also known as the:

  • service charge (or service to property charge), or 
  • fixed charge. 

This is the cost of getting electricity or gas to your place, even if you don’t use any.

You might see it on your bill:

  • in cents per day, and 
  • as the total amount for the billing period.

The usage charge

The usage charge is also known as the:

  • consumption charge, or
  • variable charge.

This is the cost of the electricity or gas that you use.

You might see it on your bill in:

  • cents per kilowatt hour (c/kWh) for electricity, and 
  • cents per megajoule (c/MJ) for gas.

Some bills might show more than one usage charge.

For example, a time of use offer might have different usage charges for different time periods, which are usually called:

  • peak 
  • shoulder, and
  • off-peak.

Your retailer can calculate the usage charges on your bill in different ways, depending on your offer.

How tariff blocks look on a bill

Some energy offers split your energy usage into different tariff blocks. With tariff blocks, you pay:

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

Blocks can apply to:

  • daily 
  • monthly, or 
  • quarterly usage.

For time of use electricity offers, blocks can also apply to the different rates that make up a tariff.

For example, you get charged one rate for the first part of your peak usage, then a different rate for the next part.

Have a look at our interactive electricity and gas bills to see examples of how tariff blocks might look on your bill.

Last updated on Wednesday, August 2, 2017 - 17:10