How to Read Your Electricity Bill
Electricity bills are designed to be confusing. They want you to glance at the total, sigh, and pay. Do not do that. Once you know what to look for, comparing plans becomes straightforward.
The 4 Numbers That Actually Matter
1. Usage Charge (c/kWh)
This is the per-unit cost of electricity you consume. Every kWh your household uses is multiplied by this rate. This is the number you should care about most. A difference of 2c/kWh on an average household (4,800 kWh/year) is $96/year. If you have a single rate tariff, there is one usage charge. If you have time-of-use, there are three (peak, off-peak, shoulder).
2. Supply Charge (c/day)
The fixed daily cost of being connected to the grid. You pay this regardless of whether you use any electricity. It covers poles, wires, and meter maintenance. Typically 90-120c/day. The supply charge varies more by location than by retailer. Regional areas have higher supply charges because the poles and wires are longer.
3. Solar Feed-in Tariff (c/kWh)
What you get paid for electricity you export to the grid. Only on your bill if you have solar panels. Ranges from 5c to 15c/kWh depending on retailer and state. A higher FIT means a lower net bill.
4. Discount / Conditional Rebate
The percentage discount some retailers advertise. Usually "X% off usage charges" if you pay on time or sign up for direct debit. These are marketing. Focus on the actual c/kWh rate AFTER the discount, not the discount percentage. A 30% discount off a 40c rate is still worse than a 25c rate with no discount.
The Quick Audit
Take your last bill. Find the usage charge in c/kWh. Then open the AER's Energy Made Easy website and compare it to market offers in your postcode. If your rate is more than 3c above the cheapest available plan, you are leaving $100-150/year on the table. Switching takes 5 minutes.
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