Understand the charges on your bill
Energy bills can be tricky to understand, with lots of complex and unfamiliar terms. Here’s what each charge on your bill means.
Fixed charge (sometimes called a supply charge)
This is a daily charge, even if you don’t use any energy. It covers the cost of transporting energy to your home or business, being connected to the grid and maintaining the poles, wires and pipes. It also includes fees for other services like customer administration and meter reading.
You might see it written on your bill as:
- cents per day
- the total amount for the billing period.
Variable charge (sometimes called a usage charge)
This is the cost for the energy you’ve used in the billing period [hyperlink to billing period section].
The cost is calculated by multiplying the amount of energy you used by the cost per unit of the energy (kWh for electricity or MJ for gas). The more energy you use the higher this charge will be. If you reduce your energy use, this charge will go down.
You might see it written on your bill as:
- cents per kilowatt hour (c/kWh) for electricity
- cents per megajoule (c/MJ) for gas.
Some bills may have different variable charges, depending on your plan and the times of the day you use energy. Learn more about energy tariffs.
Discounts or credits
This shows if there were any credits, savings or government rebates used to reduce your total bill.
Other charges
This shows any additional charges, such as an unpaid bill.
What you're paying for in your energy bill
Your energy bill covers more than just the energy you use. It also includes the cost of getting energy to your home and keeping the system running reliably and safely.
Here’s a simple breakdown of where the money in your energy bill goes.
Kilowatt-Hours (kWh)
A kilowatt (kW) is a measurement of how much electricity an appliance uses every hour. A kilowatt-Hour (kWh) tells you how much electricity has been used over time.
For example, if you run a 3,000-watt (3 kW) air conditioner for 6 hours, it will use 18 kWh. If the rate for electricity is $0.30 per kWh the total cost would be:
18kWH x$0.39 = $5.40.
Megajoule (MJ)
A Megajoule (MJ) is a measurement of how much gas has been used.
Many gas appliances are rated in MJ per hour, showing how much gas they use every hour.
For example, if you had a gas heater that uses 20 MJ per hour and you run it for 6 hours, it will use 120MJ. If the rate for gas is 5.6 cents per MJ, the cost will be:
120MJ x $0.56 = $6.72.
What Does "c/kWh" or "c/MJ" mean?
When you see c/kWh or c/MJ on your bill, it means cents per kilowatt-hour or cents per megajoule. This is the price you pay for each unit of electricity or gas you use.
How to cut your energy bill
A large energy bill can come as a shock, especially when you’re not expecting it. Here’s the 3 top ways to cut your bill.
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Shop around and find a better deal
Contact your energy retailer and ask for a better deal and compare plans using Energy Made Easy. A better plan could save you over $200 a year.
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Access government support
Check out if you’re eligible for energy rebates and bill relief support. There’s long-term and short-term support available.
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Improve energy efficiency in your home or business
Make simple changes to reduce your energy use and cut bills. Start with our free and easy tips to save.
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Find out more about the different types of tariffs.