Electricity tariffs (types and blocks)
Your electricity tariff is the pricing structure that determines how much you are charged for energy. The price does not include GST, which will be added to the total cost at the bottom of your bill. The name for each tariff type will vary depending on the energy supplier, but the standard tariff types are as follows:
Electricity Flat Rate
Usage is charged as a flat rate regardless of the time of day.
Time of use
Usage charges are determined by when the energy is consumed. This is typically divided into peak, off peak, and shoulder periods. Off peak and shoulder periods cost less than energy used during peak times. This type of tariff can also incur seasonal price fluctuations.
Usage charges are specific to a dedicated appliance with its own meter, such as a hot water system or pool pump. Controlled load tariffs tend to be offered at a lower rate due to the nature of the appliance’s off-peak operation.
Renewable energy feed in
If you have a renewable energy source installed, your state may offer a feed in tariff. In this case you may see a credit on your bill in return for energy generated by your household that is returned to the grid. Customers must typically apply for a feed in tariff and benefits vary depending on the state governing authority.
It is possible to have a combination of tariff types in your energy plan. For example, you may be offered a time of use tariff on your regular electricity use, along with a controlled load tariff for a hot water system. Your bill will clearly list the cost for each type of tariff.
Electricity Tariff Blocks
Some electricity suppliers allocate different rates to certain amounts of usage. These are known as tariff blocks, where the customer pays one amount for the first ‘block’ and a different amount for the second ‘block.’ Blocks can be segmented into daily, monthly, or quarterly usage. Rates tend to increase by block, in an effort to encourage people to keep their usage down.
In some states you can request a contract with a regulated tariff, which means that the government sets the price. Regulated electricity tariffs are available in Queensland, New South Wales, the ACT, and Tasmania. Non regulated electricity tariffs are available in Victoria and South Australia, where the energy companies set their own prices.