Understanding what you pay
In the world of energy, a tariff is simply the price you’re charged for the energy you use at your business. Tariffs vary and depend on the type of meter you have and who your energy distributor is.
What’s a distributor?
Your energy distributor is the company responsible for the poles, wires and gas pipes in your area. You’ll find the name of your distributor at the top right hand side of your energy bill.
Electricity tariffs for business
Different tariff rate types apply and depend on where your business is (your distributor zone) and the type of meter you have there.
What’s on your bill
On your bill you’ll see that electricity tariffs are divided into two parts. These are your supply and usage charges.
- The supply charge is a daily service charge to supply electricity to your business
- Usage charges are rates charged for the actual energy your business uses, and/or a demand charge based on your business’ electricity demand on the network
- Some tariffs have variable usage rates depending on when your business uses energy
You can have a look at the back of your bill to see the tariff you’re on.
Time of Use, Single Rate, Off peak rates, Demand Charges and Solar Feed-in Tariffs for business
With Time of Use, different rates are charged for the electricity your business uses at different times of the day or week, off peak, shoulder and peak.
- Off peak – charged when the electricity network has low usage, such as overnight.
- Shoulder - a usage rate that sits between peak and controlled load times. Shoulder rates are usually a bit cheaper than peak rates and are available in most states. For example, shoulder times are 7.00am to 3.00pm and 9.00pm to 10.00pm on weekdays, as well as 7.00am to 10.00pm on weekends. These times may differ between states.
- Peak - charged when the electricity network has high usage, such as in the evening or on weekdays.
Time of Use pricing might be more suitable if your business operates during the day on weekdays, on the weekends or late in the evening.
This means the rate stays the same whatever time of day or year your business uses electricity. This rate is usually lower than peak and might suit you if your business operates during weekdays.
Off peak refers to lower electricity prices during certain times, generally when electricity network usage is low. Off peak times usually are at night or weekends and vary depending on your area and meter type.
Controlled load electricity refers to electricity being used by a stand-alone item, like an electric hot water service, electric slab heating and irrigation pumps. Controlled loads are recorded by a separate meter and can be billed as an off-peak rate.
A demand tariff is a charge based on maximum demand for electricity, expressed in kilowatts (kW) which is calculated from the highest energy usage over a 12 month period.
Demand tariff structures are designed in most cases to encourage less electricity use during peak demand times when there’s more pressure on the electricity network. These structures vary and are set by your electricity distributor.
Why do we need demand charges?
The electricity networks need to be able to cope with those extreme hot days, so the distributors need to invest in updating and maintaining the network to handle the highest peak of electricity demand, even if it’s only for a few days of the year.
Imagine our electricity network is like a sports stadium. It would be built to handle demands for a grand final (highest peak demand). The overall cost would be based on a full stadium of 100,000, not the average number of 50,000 people who use the stadium throughout the year.
Would demand charging suit my business needs?
A demand charge could suit your business if you’re a high electricity user and can reduce usage during peak demand times on a weekday, when the demand charge is measured. However, if your instantaneous electricity usage goes above the demand limit, you’ll have higher demand charges.
Demand pricing is available if you’re eligible and have a smart meter.
Any unused electricity that your solar power system sends back to the grid, is credited to your bill after you’ve been charged for your electricity. The credit amount depends on what state you’re in and how big your solar power system is.
Gas tariffs for business
The tariff structure for gas depends on your state and distributor in your business’ area.
What’s on your bill
On your bill you’ll see that gas tariffs are divided into two parts. These are your supply and usage charges.
- The supply charge is a daily service charge to supply gas to your business.
- Usage charges are rates charged for the gas you use.
- Some tariffs have variable usage rates depending on when you use gas.
You can have a look at the back of your bill to see what type of tariff you’re on.
In some places, we can’t supply gas. This might be because gas lines aren’t available to businesses in your area, there’s no gas meter on the business premises, or there’s an area restriction (e.g. only certain energy retailers can offer gas).
What’s the difference between seasonal and non-seasonal gas rates?
A seasonal rate is charged between peak season (winter) and controlled load season (non-winter). It can be charged as a single rate within these seasons, or as a block rate (a usage rate calculated on how much gas you use at your business). This type of gas rate is only available in Victoria.
With a non-seasonal rate tariff, the rate stays the same, no matter what time of year you use gas at your business.
Other fees and charges
If you need to change your meter, disconnect or reconnect your energy or ask for a special meter read, charges may apply. Find out more about these fees and charges.
What are energy offers for business?
There are two types of energy offers for business - standard and market retail offers.
What’s the difference?
A standing offer is a basic energy plan with the prices set by us as the retailer with no discounts, such as our Basic Business energy plan.
Market retail offer
By this we mean an energy plan with the prices set by the retailer (that’s us) typically with a benefit or incentive (e.g. a discount or a credit to your bill) for a fixed amount of time.
Find out more on our Energy Plan Information page.