Understanding Tariffs
Understanding Energy Tariffs
Learn all about it here!
What Exactly Is a Tariff?
How you are charged for power depends on how your meter is set up. Most residential meters in Australia are billed for power on a single rate tariff. That means you pay a single rate for power no matter what the time of day that power is consumed. However some meters are set up differently and have different tariffs.
This is because there are a number of different ways to charge for power. That’s why GloBird always ask for your address before we give you a quote, because we need to make sure we quote for the actual tariff at your individual meter. Providing your postcode is not enough to give you an accurate quote.
Understanding the way you use your power is important, and will help you decide the best tariff for you. A flat rate might be best if are at home a lot in the evening Monday to Friday. A TOU tariff might be best if you use most of your power at night. The tariffs that are available to you are set by the network distributor (and not by retailers such as GloBird).
Let us know if you need advice choosing the most cost effective tariff for you, we are happy to help. Call GloBird Energy on 13 3456
Single rate tariff
A single rate tariff is the most common tariff for Australian residential electricity customers. You pay the same rate for electricity regardless of time of day you use energy. A single rate tariff is sometimes called: flat rate, standard rate, anytime rate, or peak rate.
Step rate tariff
A step tariff is easiest to explain in an example. Let’s say you consume 1000 kWh in a month. Imagine the rate for step one is 10 cents per kWh, and the rate for step two is 20 cents per kWh. If the step one allowance is 30 kWh per day, and your bill is for 30 days. You would be charged at the step one rate of 10 cents per kWh for the first 900 kWh (30 kWh X 30 days), and then charged at 20 cents per kWh for the remaining 100 kWh.
Demand tariff
This is a relatively new type of tariff that is charged based on the maximum amount of power you use at any one time during the month. Its explained further here: https://www.globirdenergy.com.au/demand-charge/
Controlled load tariffs
Some appliances can be charged a controlled load tariff, for example: slab or underfloor heating, or electric hot water systems. Often the controlled load appliance has its own meter and is an appliance that runs overnight.
Time of Use (TOU)
This tariff is also known as “Peak / Off-Peak” and is one of the most cost effective tariffs for the average Aussie household. However the network companies have now closed this tariff to new entrants. If you are currently on a peak / off-peak tariff, be careful not to switch to another tariff unless you’re confident the change will be for the better, because you will not be able to go back.
Flexible Pricing
A flexible tariff is similar to TOU mentioned above, only instead of having two rates depending on the time of day you use power, it has three rates. See the below example.
The price of electricity is lower than the peak rate and higher than the off-peak rate, when there is a reduced demand for electricity.
Legend:
Peak: The price of electricity is higher during the ‘peak’ times, typically on weekday afternoons and evenings, when the demand for electricity is the highest.
Shoulder: The price of electricity is lower than the peak rate and higher than the off-peak rate.
Off-peak: The price of electricity is lowest when the demand for electricity is the lowest.
Generally the peak period applies 3pm to 9pm Monday to Friday, off-peak period applies 10pm to 7am every day, and all other times are shoulder. The times quoted are eastern standard time. Your meter’s clock does not adjust for daylight savings time, so these periods shift by one hour during daylight savings period. For example peak period would be 4pm to 10pm Monday to Friday during daylight saving time.
Not all network areas and tariffs follow these exact time periods. For more specific details on what time of the day is considered peak, off peak and shoulder please refer to: https://www.globirdenergy.com.au/flexible
Gas Peak Season
The price for gas can vary depending on the season. Generally speaking the peak season for gas is around the winter months and off-peak around summer. See below for details:
Off peak Period – October to May
Peak Period – June to September
Why did your website quote me different rates than my neighbour?
Each meter is configured with its own “tariff”.
There are many tariffs types.
Our website looks up your meter on the national electricity database, and quotes based on the actual tariff for your meter.
Many comparison websites don’t know your tariff type, they simply list the pricing for all meter types and all tariffs in your area.
It’s very common for houses in the same area to have different tariffs.
GloBird give you a quote for your actual meter. This is the most accurate way of providing a valid quote.
Call us for more information.
Can I change tariff?
Changing tariff can sometimes be done, but there are some important things to consider before you try.
- There is a cost to change your tariff. See our fees page for details.
- Only the retailer responsible for billing you can apply to change your tariff on your behalf.
- You can only change tariff once a year.
- Even though you apply for a tariff change, your local distributor who owns the electrical infrastructure have the final say. They may or may not allow you to access all tariffs.
- Some tariffs are closed to new entrants. For example; Peak / Off Peak is no longer open. If you already have Peak / Off Peak, you can remain on it. However, if you change to another tariff you will not be able to go back.
- It is possible to lose important benefits like premium feed-in for solar if you change tariff.
GloBird give you a quote for your actual meter tariff. This is the most accurate way of providing a valid quote. Please be careful when considering changing your tariff, another tariff may seem more cost effective, but often are not. Opting out of a tariff can mean you can’t go back. It’s best to simply know your tariff and to compare rates for that tariff from different providers. That way you are comparing apples to apples. Call us for more information.