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Australian government - energy made easy: the power to compare

Don't be dazzled by discounts

24 April 2017

How to understand the real value of a discount.

Understanding energy bills

To understand a discount, you first have to understand your energy bill.

If you look at your bill, you will find that the total amount you pay is broken into 3 main parts.

Bill item Explanation
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 charge 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.

Understanding discounts

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 charge 24c per kWh 1980.353 kWh $475.28 $403.99

Total: $511.09

GST: $51.11

Amount due: $562.20

In this example, the 15% pay-on-time discount saved you $71.29 for that quarter. Over the course of a year, if prices and your usage stayed the same, this would add up to over $280.

Tips

  • Ask your retailer if you're getting any discounts. If you're not, ask for one or do a search on Energy Made Easy. Spending an hour getting a better deal can be like earning over $280 per hour!
  • Check if the discount is off the usage only or off 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.

Last updated on Wednesday, October 25, 2023 at 1:52 PM