Bundled Bills. Energy Charges

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1 This guide is for businesses using under 160,000 kilowatt hours (kwh) or 160 Megawatt hours (MWh) per annum. Businesses using over 160 Megawatt hours should refer to the Unbundled Bills How-To-Guide. Unbundled vs. Bundled bills. Larger businesses can generally negotiate an energy contract with a retailer and are able to negotiate on some of the individual charges. These Unbundled bills are where the network charges and other charges are split out from the energy charges. Smaller businesses will generally have a Bundled bill where the charges that make up your rate are shown as a combined electricity rate on your bill. While you cannot negotiate the different charges on the bill, you can generally negotiate an overall discount of either the energy charges or the entire bill. An example of a bundled bill can be found below, showing the overall charges for Peak, Off Peak and Shoulder consumption, a daily supply charge, a demand charge and a discount off the electricity charges. Energy Charges

2 The above example shows a business on a Time of Use (TOU) tariff where they pay a different rate for peak, offpeak and shoulder. The amount of electricity (kwh) consumed for the month is split against these three tariffs. While the tariff costs may be set, you can generally negotiate a discount with your electricity retailer. You also have a choice as to which electricity retailer you use. Some retailers will offer discounts off just the electricity use component while others offer a discount off the entire bill (including supply and other charges). Negotiating a contract A great site for comparing different electricity plans is the NSW Government site run by IPART (Independent Pricing and Regulatory Tribunal) at Using information from your current bill, you can work out how much you would pay for different plans. When considering changing retailers always be aware of any contract termination or other fees you may have to pay. Also, keep in mind your current retailer may match or beat any deal you come across. It is also important to compare not just what the electricity supply rates are but also daily supply charges, whether there is a demand charge (see further below) and any late payment or other fees and charges. Powersmart vs. Loadsmart Tariff In Ausgrid s network area (which is most of the Hunter Region) retailers will generally put you on a type of network tariff dependent on how much electricity your business uses. It is important to check that you are on the right tariff or you may be paying much more than you should. You may be allocated a tariff based on consumption from a previous business at your site so it pays to find out how you contract has been determined. For many retailers in Ausgrid s area, businesses consuming under 40MWh per year will be put on a Powersmart tariff and those between 40MWh- 160MWh are allocated a Loadsmart tariff. Some retailers however just have the Powersmart tariff for businesses using up to 160MWh per annum. So why is this important?

3 There are two reasons. One is that some retailers include a demand charge (described below) for businesses between 40MWh-160MWh while others don t. This can account for a substantial amount of your bill. A demand charge (or capacity charge) is usually represented on your bill as c/kw/day. These charges are applied to the maximum half hourly kw (or kva (kilovolt amps)) power reading that occurred at your premises over the 12 months prior to the bill being calculated. In other words it is the largest amount of electricity needed to power your business at any given time over the last 12 months. The chargeable kw or kva reading can only occur during peak times which are from 2pm-8pm on working weekdays. If you pay a demand charge you should investigate how to reduce your peak load. This could save you money by lowering your demand charge. Another reason that knowing your tariff is important is the difference in peak, shoulder and off peak times. Time of Use In areas where Ausgrid is the network provider the times of use are: Powersmart Peak 2pm 8pm (Monday to Friday) Shoulder 7am-2pm and 8pm-10pm (Monday to Friday) and 7am-10pm Weekends and Public Holidays Offpeak 10pm-7am every day. Loadsmart Peak 2pm 8pm (Monday to Friday) Shoulder 7am-2pm and 8pm-10pm (Monday to Friday) Offpeak 10pm-7am (Monday to Friday) and all day Weekends and Public Holidays It is important to note that depending on your electricity retailer and contract, you may also have an extra peak period, so it is important to understand what you re paying for electricity and when you re using it. The tables below illustrate several examples of what you could pay under different tariff structures (note these are not provided as actual retail offers):

4 Powersmart Tariff (if under 40MWh per annum) Peak $ $ $ Shoulder $ $ $ Offpeak $ $31.28 $25.03 Discount (%) 20% Daily Supply Charge $1.331 $41.26 N/A Total Cost (inc GST) $ $ Although the Peak rate is high, the Shoulder rate and Off Peak rate are when a lot of businesses will use electricity. The daily supply charge is also lower. Loadsmart Tariff (if Between 40MWh and 160MWh) Peak $ $ $ Shoulder $ $ $ Offpeak $ $57.03 $45.62 Retailer Discount (%) 20% Peak Capacity $ N/A Daily Supply Charge $5.50 $ N/A Total Cost (inc GST) $1, $ Here there is a larger daily supply charge and also a Peak capacity or demand charge. If a business under 40MWh is accidentally on this tariff they are potentially paying almost $400 a month too much. You should check this on your bill. Other retail plans (Business Under 160MWh) Peak $ $ $ Shoulder $ $ $ Offpeak $ $50.48 $45.43 Discount (%) 10% Daily Supply Charge $2.15 $66.65 $59.99 Total Cost (inc GST) $ $ In this example, the retailer is offering this plan to businesses under 160MWh. Note there is no peak capacity charge on the bill. Although the discount is smaller than the others above, it applies to the whole bill not just consumption charges As you can see there are many factors that can influence your bill and it pays to understand when you use electricity, how much you use in your business

5 and what you pay for your electricity. It is also important to look at how you can reduce your electricity usage and often it can be easier than you think. If you have any concerns about your electricity account it s best to contact your retailer or alternatively the website of the Energy and Water Ombudsman NSW has some further information and resources ( For ideas about how you can reduce your electricity use and keep a handle on your bills, have a look around at This Activity received funding from the Department of Resources, Energy and Tourism as part of the Energy Efficiency Information Grants Program.The views expressed herein are not necessarily the views of the Commonwealth of Australia, and the Commonwealth does not accept responsibility for any information or advice contained herein.