There is a lot of confusion when it comes to the energy industry in Australia, particularly around what we are actually paying for when it comes to our electricity use, and how our bills are calculated.While many retailers have what appear to be attractive headline rates, there is often more to your energy contract and a number of hidden costs. So if you’re in the process of choosing or changing your energy retailer, here is a run down of things to consider and be aware of.
The fine print
While the headline rates of certain energy retailers can sound attractive, make sure you read the fine print of the terms and conditions before making a decision. The fine print is where you’ll find details about additional fees and charges that you may incur. These charges may include early exit fees, the timing of bill payments and also additional service charges that may be added to your bill.
Make sure you consider these additional charges and work out whether they work for you – for example, are you likely to want to break your contract for circumstantial reasons and if so, are there any early exit fees associated with doing so?
Variable rates and tariffs
Energy retailers can charge both on and off peak rates, which means that you may be charged different rates for energy use at different times of the day. Make sure you understand the variation of rates, and choose a retailer whose rates suit your lifestyle.
For example, some energy retailers might charge less for the first block of energy that you use, and then more for any incremental charges. For other retailers, this can be the other way round. So if you live in a single person household, make sure you choose a retailer that has the best rates for the first block of energy used.
All rates and tariff information should be outlined in your bill. Once you understand how your energy is charged, making some habitual changes can reduce the cost of your electricity. For example, putting your washing machine on later at night may be more cost effective than putting it on first thing in the morning.
Along with variable rates and tariffs and different time of use charges, you will also be charged a fixed charge. This does not relate to how much energy you use, but is separately identified and is often called the service or supply charge. Comparing different fixed charges will also help you make the right decision when choosing your energy retailer.
There are a number of things to consider when choosing your energy retailer, but by taking the time to consider the fine print, variable rates and tariffs and different time of day usage charges, you can avoid being hit with unexpected costs when your energy bill arrives. It will also allow you to understand how your energy use translates into a cost, and give you the information you need to change your energy consumption habits accordingly.
Make sure you take the time to consider not only the attractive headline rates of energy retailers, but the finer print as well.
Author Bio: Australian Power & Gas’ David Goadby is an expert in energy efficiency, and helps Australians understand and adopt energy efficient practices. Australian Power and Gas is a leading gas and electricity supplier in Victoria, New South Wales and Queensland, helping Australians get transparent and fair deals on their power.