What is a tariff?

A tariff is a way a retailer charges a customer for their energy usage. Tariffs vary and depend on the type of meter you have and who your energy distributor is. Your energy distributor is the company responsible for the poles, wires and gas pipes in your area. There are usually separate distribution companies for electricity and gas (if available) in a distribution zone, which is based on your street and postcode. Your distributor can be found on the top right hand side of your electricity or gas bill.

Tariffs are divided into two parts on your bill, supply charge and usage charges:
•    The supply charge is a fixed daily service charge to supply energy to your business
•    Usage charges are rates charged for the energy your business uses and / or a demand charge based on your business’ electricity demand on the network. Some tariffs have different usage rates depending on the time of day and day of the week you use energy.
 

Types of tariff structure for electricity

There are different tariff rate types available depending on the area and type of meter you have at your business. You may see more than one tariff type on your electricity bill.

  • single rate – no variation in usage rates no matter what time of day or year it is
  • block rate – a usage rate calculated based on blocks of usage
  • off-peak – rates change in low usage periods, such as overnight
  • time of use – different times of day incur different rates; same goes for different times of year
  • feed-in tariff – paid to the customer based on the amount of energy they ‘feed-in’ to the grid, mainly made possible by generating solar power using solar panels. It is only applied on top of one of the other usage tariffs

Types of variable charge tariffs for gas

The tariff structure for gas depends on your state

  • seasonal rate – rates change between peak season (usually winter) and off-peak season.  Usage can be charges on a single rate in each period or block rate
  • single rate – no variation in usage rates no matter what time of day or year it is