How to read your power bill

Living Well | Jan Fisher | Posted on 15 February 2019

Reading an electricity bill doesn't need to be complicated.

Knowledge is power when it comes to understanding your energy bills. 

RACV senior product manager energy Kieran Davies says it pays to do your homework about all those confusing terms on a power bill.

“The most important thing about understanding your bill is the final amount,” he says. “People get fixated on discounts, but they don’t matter if you’re getting a 40 per cent discount on a terrible rate. 

“People find it all too hard, they don’t engage with the system. Not everyone is going to understand every aspect of a bill, but they need to know enough not to get ripped off.”

Check out the sample bill below, and if you’re still unsure, head to our Facebook page to post a question about your bill. You can read on for some additional explanations of power-bill terms.

  1. Your electricity distributor: This is the company responsible for maintaining the poles and wires that supply electricity to your property. It is separate to your electricity retailer and is the company you should contact in case of an electrical fault or emergency. 
  2. Your usage profile: This graph shows either your total usage or average daily usage over a number of months or bills. Depending on your electricity source you may also see the greenhouse gases created to supply your home with power. 
  3. Bill summary: This section of your bill shows any amount that was owing on your account from previous bills, any new charges and the final amount outstanding. You should always aim to pay your bill before the due date as late payments can attract hefty fees or equivalent lost discounts. 
  4. National Meter Identifier (NMI): The NMI is a 10 or 11-digit number that is unique to every connection point to the electricity network in Australia. 
  5. Bill Period: These are the dates that the current electricity bill covers. Electricity bills are usually sent monthly or quarterly. 
  6. Meter Number: This number is usually 6 or 7 digits and may include letters before or after. An electricity bill may include multiple meters, each of which measures usage on the site. 
  7. Electricity usage: This is a measure of the amount of electricity you have used for the bill period, and is measured in kilowatt hours or kWh – a unit of energy. The usage may be broken down into peak and off-peak based on the time of usage, or into steps with different charges per step. Adding these together will give your total consumption. 
  8. Supply charge: In addition to usage charges you also pay a daily fee to be connected to the electricity network. 
  9. Unit charges: These are the rates your electricity retailer charges you for each unit of energy supplied and each day of connection to the grid. These charges and any discounts are what you should use to compare the costs of different electricity retailers
  10. Discounts: Discounts are often applied by retailers to usage charges and occasionally to supply charges or total bills. Discounts can be substantial but are often dependent on paying on time or by a certain method e.g. direct debit. The value of discounts should be compared against unit charges as a big discount on a high charge may not be as cheap as a more competitive rate with no discounts.
man and woman at a table reading bills

Here are some additional power-bill terms you should become familiar with:

  • Kilowatt hours: Electricity consumption is measured in kilowatt hours (kWh) and every bill will have the amount you have used for the billing period. 
  • Usage charge: Charges for how much electricity has been used at the site.
  • Feed-in tariff: If you have solar panels this is the rate the power company pays you for supplying excess power back to the grid. 
  • Peak and off peak: Energy suppliers can charge more for peak times – between 7am and 11pm weekdays – and less for off-peak. Victoria also allows ‘shoulder’ periods. Most bills show peak and off-peak usage, but this does not mean you are being charged the split rate. Most Australian households are on a set rate for the whole day. 
  • Green power: Allows consumers to pay a premium to buy ‘green’ energy from renewables, bought by the supplier on their behalf. Consumers can elect to pay a portion of their bill or a set fee.
  • Variable and fixed rates: These sound like loan rates because they are like loan rates. Choose a fixed rate, usually two years, or take your chances with a flexible rate that can be changed – with notice – at the suppliers’ discretion. Fixed rates generally don’t come with plan discounts and can involve an exit fee if you want to get out of the plan, while variable rates have discounts but need to be regularly tracked to keep an eye out for the best deal. And check the fine print, ‘set term’ does not mean ‘set price’. 
  • Standing offer v market offers: All energy companies must legally provide a standing offer. They are usually much more expensive and don’t have many, if any, discounts, but come with certain terms and conditions, including rules around price increases. Market rates are often more competitive and have discounts. Although prices can change on market offers they are the cheaper and better option for most households.

Photo: Getty Images