Don’t be dazzled by discounts
How to understand the real value of a discount
Understanding energy bills
To understand a discount, you have to first understand your energy bill.
If you look at your bill, you will find that the total amount you pay is broken into three main parts.
|Daily supply charge||The supply charge is the amount you pay to have your home connected to the electricity grid. You might not use any power all year, but you will still pay the supply charge. It is usually around $1 per day.|
|Usage charges||The usage cost is the charge for exactly how much electricity you used in that period. If you didn't use any power at all, you wouldn't be charged for usage. Your usage is measured per kilowatt hour (kWh).|
|GST||GST is always 10% and is added to the total bill.|
Imagine an energy retailer offers you a 15% pay on time discount.
Pay on time discounts tend to apply to usage costs only, not the whole bill. Here's an example of what this might look like.
|Bill item||Cost||Amount used||Price||Price with 15% discount|
|Daily supply charge||$1.19 per day||90 days||$107.10||N/A|
|Usage||24c per kWh||1980.353 kWh||$475.28||$403.99|
Amount due: $562.20
In this example, a 15% pay on time discount has saved $71.29 per quarter. Over the course of a year, if prices and usage stayed the same, this would add up to over $280.
- Check if the discount is off usage or the whole bill.
- See if you could get a better deal elsewhere with a lower usage charge. A lower usage charge may actually be cheaper than getting a big discount!
- If you have a pay on time discount, set up a reminder so you always pay your energy bills on time. If you don’t, you will lose the discount and might be charged a late payment fee as well.