Two main factors influence your usage costs: your tariff – which is your rate structure and how you are charged – and the amount of energy you use.
There are four types of tariffs:
- Single-rate tariffs: One flat rate for all energy usage.
- Time-of-use tariffs: Different rates, depending on when you’re using energy.
- Controlled-load tariffs: A separate charge for large, high-use electricity appliances, such as pools or hot-water systems.
- Demand tariffs: Charges are based on your highest peak-period energy usage during the billing period.
Your electricity usage is measured in kilowatt hours (kWh), which is equivalent to the amount of energy an appliance uses in an hour.
An example? If you run a 1000-watt heater for an hour, it will consume 1 kWh. If you’re on a single-rate tariff and your usage charge is 22.56 cents per kilowatt, your heater will cost 22.56 cents for that hour. If you run the heater for eight hours, it will use 8 kwH and the cost will be $1.85.
But if you’re on a time-of-use tariff, the charge for the heater will change during the day. It means you’ll have different rates for
- Peak periods: Highest rate.
- Off-peak periods: Lowest rate.
- Shoulder periods: In-between rate.
Looking to cut costs? Your usage could be the key. Check out your consumption patterns, learn about your tariff, then look for ways you can cut back or change what you’re doing – our Energy Saving Tips and Tariffs Explained articles have great advice to get you started.