Business

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1. Understand your energy use

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How to read your energy bill

If you want to save on your energy and reduce emissions, it’s important to understand your energy bill to know the impact your actions are having on your energy use. This is also helpful when shopping around to get a better energy deal for your business needs.

What’s in your energy bill

Your bill is made up primarily of the amount of energy you consume multiplied by the price per unit. It may also include a separate network charge and itemised breakdown of any other regulatory or service fees.

The price per unit can vary depending on:

  • the time of day you use your electricity
  • the type of contract you’re on
  • where your business operates, as each state and territory makes its own decisions about the costs of the various components involved in energy supply.

Your gas and electricity tariff has 2 main parts:

  • a daily supply charge (sometimes called a fixed or service charge)
  • a usage charge (a variable or consumption charge).

The daily supply charge is the cost of getting electricity or gas to your premises and appears on your bill as a total amount or in cents per day.

The usage charge is the cost of the electricity or gas you use, and appears on your bills in cents per kilowatt hour (c/kWh) for electricity, or cents per megajoule (c/MJ) for gas.

1 kilowatt hour (kWh) is equivalent to the amount of energy a 1000 watt appliance (such as a 1000 watt radiant heater) would use in 1 hour. 1 KWh is equivalent to 3.6 MJ of gas, so 3.6 is a useful conversion factor for comparing gas and electricity energy consumption or for calculating total energy use.

While different providers’ energy bills may look different, they often contain core information such as:   

  • supply address or service address
  • meter number
  • energy bill start and end dates
  • average daily energy usage
  • amount owing, usually including any credits, discounts or overdue amounts.

Some bills might show more than one usage charge. For example, a time of use offer might have different usage charges for different blocks of time. These are usually called peak, shoulder, and off-peak.

Your bill may also indicate whether the energy consumed is estimated rather than actual. Estimated readings occur when the energy company cannot gain access to the meter. Companies may also accept self-read meter readings in these circumstances.

    Fees and charges

    There are many separate costs involved in providing electricity and gas to your business. These costs and their relative contribution to the total amount payable are not usually provided in detail on most energy bills.

    These costs include:

    Retail costs

    Retail costs are for administrative services such as account and billing management, and customer support. This comprises about 10% of a typical electricity bill and 20% of a typical gas bill.

    Wholesale costs

    Wholesale costs are payments to the wholesalers (energy generators). This comprises about 35% of a typical electricity or gas bill.

    Network costs

    Network costs are payments to the electricity and gas distributors who build and maintain infrastructure such as overhead wires, transformers and gas pipes. Due to the considerable distribution distance between energy generator and customer, as much as 50% of electricity and gas bills is for network costs.

    Environmental costs

    Environmental costs are for government programs to save energy and support the development of renewable energy. Environmental costs comprise about 5% of a typical electricity bill.

    Businesses may also pay an additional fee to their energy provider to purchase a certain portion of their electricity as GreenPower.

    GreenPower is a government accredited renewable energy product offered by most electricity retailers to households and businesses in Australia. Where GreenPower is purchased, it may appear on your bill as a separate itemised cost.

    To read more about fees, charges and tariffs see the Australian Energy Regulator (AER) website.

    Solar PV billing credits and offsets

    Businesses with solar PV panels will also receive a summary of solar credits or offsets relevant to final energy bill outcomes.

    As solar power is usually 'net metered', your bill likely won’t provide a separate figure for total solar power generation. Total usage on the bill refers to the 'purchased power' which is power purchased after exceeding available onsite solar generation.

    The amount of solar power exported is metered and may be shown on the bill.  However, the solar energy used onsite (also known as the ‘offset power’) is not metered, so will not appear on your bill.

    The amount of offset power can be estimated by deducting the exported power from the amount of power generated. The amount of power generated is recorded in the PV inverter, and can be easily accessed using energy monitor phone apps.

      Billing for energy-intensive SMEs

      There may be differences in billing for larger or more energy-intensive SMEs. These differences include:

      • electricity bills being monthly rather than quarterly (more frequent energy bills give greater insight into energy use patterns throughout the year)
      • more complex tariff structures
      • more line items, detailed breakdown of cost components and possibility of multiple meters and energy suppliers within a single facility.

      Due to the added complexity of energy supply arrangements for energy intensive SMEs, it may pay to seek independent expert advice.

        Energy-intensive businesses with a net consumption of more than 0.05 PJ per year should refer to the energy procurement for large energy users section for billing information.

        Energy bill examples and guides

        Energy Made Easy has sample electricity and gas bills to step you through your usage and explain what all of the information means.

        Most energy providers have company-specific how-to guides on reading their energy bills. Links to illustrated guides from some of Australia’s energy providers are listed below:

        What to do if you think your energy bill is wrong

        Detecting any errors in your energy bill is essential. An error of just a few percent can amount to substantial costs.

        Consider these ways to help ensure your energy bill is correct:

        • Compare your bill to previous bills. Compare like-for-like periods as previous bills may be affected by seasonal factors or variation in production output. Adjust for variation by using an average of several previous bills.
        • Compare your bill to onsite meters and monitoring data. To read more about onsite metering see the Metering and monitoring guide.
        • Review all the billing service details including dates and meter numbers.
        • Check the usage charges are based on actual (not estimated) energy usage.

        If you think your bill is incorrect, contact your energy retailer as soon as possible. An energy retailer must review a bill if a customer requests it.

        If you’re still not satisfied, you can talk to the energy ombudsman in your state or territory. An ombudsman provides a free and independent dispute resolution service. You can also get more information from the AER online or by calling 1300 585 165.

        Energy audits

        An energy audit can help to clarify your company’s energy consumption and identify areas for potential savings. It can lead to reduced energy use, improved productivity and highlight opportunities to innovate.

        Energy audits can be conducted in house. However, if skills are not available internally, external experts or energy services companies can be engaged to conduct part or all of the process.

        Read more about how to conduct an energy audit.

        Read more

        Business support programs and advice

        Equipment and technology guides

        Industry sector guides

        Better Bills Guideline (AER) Australian Government

        Business.gov.au Australian Government

        Energy Made Easy Australian Government

        My energy bill (AER) Australian Government

        The 20 Step Guide to Cutting Energy Bills in Your Business Australian Government