How Your Electricity Bill is Calculated in Australia

Have you ever opened your electricity bill and felt confused by all the different charges? Understanding what each line item represents can make it much easier to see where your money is going and identify ways to save. Whether you own a home, rent, or run a small business, knowing how your electricity bill is structured gives you more control over your energy costs.

Quick Overview:

In Australia, electricity bills usually consist of:

Supply charges – a fixed daily fee to maintain your connection.

Usage charges – costs based on the kilowatt-hours (kWh) of electricity you use.

Other possible fees include demand charges, network or metering fees, environmental levies, GST, and additional surcharges.

Understanding your plan type, consumption patterns, and available discounts can help reduce your bill.

Breaking Down Your Electricity Bill

Australian electricity bills generally include supply charges and usage charges, though other fees may also apply depending on your plan.

Supply Charges

You’ll pay a daily supply charge even if you use very little electricity. This fee covers the maintenance of your connection and the local electricity network.

Usually expressed as cents per day (c/day).

Example: 110c/day × 30 days = $33 for a month.

Note: Figures above are illustrative. For actual rates, check Sumo Energy.

Usage Charges

Usage charges make up the bulk of your electricity bill. These are based on the total kWh you consume, and the rate depends on your plan type. Common plans include:

Tariff Type How it Works

Single Rate Same cost per kWh any time of day.

Time-of-Use (TOU) Rates vary depending on the time

electricity is used (e.g., peak vs off-peak).

Controlled Load Extra tariff for specific appliances (like

electric hot water systems or pool pumps),

usually running overnight at lower rates.

Time-of-Use Notes:

TOU tariffs require a smart meter and aren’t available everywhere. Typical periods include:

Peak: Higher rates during busy hours.

Off-Peak: Lower rates when demand is low.

Shoulder: Middle-rate period between peak and off-peak (if offered).

Example Usage Calculations

Single Rate Plan:

Rate: 30c/kWh

Usage: 400 kWh

Total: $120

TOU Plan – Even Split:

Peak: 40c/kWh, Off-Peak: 20c/kWh

Usage: 200 kWh peak + 200 kWh off-peak

Total: $120

TOU Plan – Mostly Peak:

Usage: 300 kWh peak + 100 kWh off-peak

Total: $140

TOU Plan – Mostly Off-Peak:

Usage: 100 kWh peak + 300 kWh off-peak

Total: $100

Your choice of tariff and usage times can significantly affect your bill.

Demand Charges

Some retailers apply demand charges for high electricity usage during peak periods, often relevant for homes with EVs or high-power appliances.

Measured as the highest kilowatt (kW) used in a 30-minute peak period.

Calculation: Peak kW × Rate per kW × Days in billing period

Added on top of your standard usage charges.

Being aware of peak consumption helps keep demand charges in check.

Always check your plan details to see if demand charges apply.

Other Factors Affecting Your Bill

Discounts or credits: Some don’t apply automatically; review your plan terms.

Billing period length: Bills may cover more or fewer than 30 days.

Seasonal variations: Energy use changes with weather; compare usage to the same period last year for accuracy.

Putting It All Together

A typical electricity bill combines supply charges, usage charges, and any additional fees (like demand charges or network costs). While illustrative examples help with budgeting, your actual bill can vary each month.

Understanding your tariff, consumption habits, and available savings options can reduce your monthly electricity costs and help you make informed decisions about your energy plan.

Read more here: https://www.sumo.com.au/blog/how-your-electricity-bill-calculated-australia