With the temperature dropping across most states as winter settles in then it’s time to consider ways you can save energy to prevent “bill shock”.
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According to Laura Crowden from energy comparison service iSelect, winter power bills can quickly escalate if consumers don’t understand energy consumption and rates. With energy regulators in Victoria, New South Wales and South Australia reporting the number of electricity disconnections has more than doubled in the past five years, she said it was vital consumers understood energy consumption and how to read a power bill.
"The number of consumers having their electricity or gas disconnected is continuing to grow as more Australians struggle to pay their energy bills,” Ms Crowden said. “Consumers experiencing 'bill shock' shouldn't wait until they are threatened with disconnection before they do something about it. Consumers should review their current energy plans and find out if switching to a different plan would help them save them money and better manage their bills."
She said comparing average usage for the same time a year ago was a helpful way to track whether energy consumption has gone up or down.
“Energy bills can be really confusing but it’s important to take the time to review your current plan and understand what you are paying per hour and your current pricing levels during peak and off-peak times,” she said. “This will help you find out if you are getting the best deal or if switching to better suit your energy needs and ultimately save you money.”
Ms Crowden said the cost of an electricity bill is made up of two charges: the fixed rate and the variable rate. “This can be confusing because on some bills, rates are also known as tariffs,” she said:
- Fixed rate is the cost of supplying the electricity to your house, regardless of how much you use. On your bill, it’s often quoted as the daily supply charge or the service to property charge.
- Variable rate or usage charge, is based on how much electricity you actually use. This is usually the largest part of an energy bill. There are a number of different variable rates available:
- Single rate – also called flat rate or peak rate. The same rate is charged all day. This is the most common type of rate.
- Block rates - your electricity use can be split into different rate blocks, with each block charged at a different rate. When you have reached the cap of your first block, any additional electricity you use is charged at the second block price.
- Off peak rates (also called controlled load) - these rates are generally only available where a hot water system or other appliance is separately metered and can be time-controlled to operate at low-demand times.
- Time-of-use rates - the rate goes up as you use electricity in peak times and down as you use it during off-peak hours.
- Flexible pricing rates – these use peak, off-peak and shoulder rates according to your time of use. Flexible pricing rates are relatively new to the market and your house needs to have a remotely-read Smart Meter installed for these rates.
The bill benchmark graph is another helpful tool that compared your average daily use against that of other households. Comparing providers can also save money, Ms Crowden said, but be aware of special offers as they will come with conditions turning short-term gains into long-term pain
“Many people don’t realise that they can use different gas and electricity providers to get a better deal and bring down costs. Opting for direct-debit or paperless billing is another simple way to save money. Many energy providers offer special introductory offers but it’s important to read the conditions carefully. You may only be eligible for the special discounts if you pay your bill on time or sign up for direct-debit.”
To minimise winter energy consumption, Laura Crowden suggests:
- Only heat rooms you are using
- Close curtains and blinds to minimise heat loss
- Close doors and use door snakes to stop draughts
- Seal cracks as draughts can increase heat loss by up to 25 per cent
- Set the heater’s thermostat to 20 degrees Celsius or less as every extra degree can increase costs by 10 per cent
- Put on a jacket if the weather is a little chilly rather than turning on the heater
- Add a hot water bottle to your bed instead of turning on electric blanket to warm the sheets
- Turn off heaters over night
- Only use heaters when you are home.
Installing solar power to your home would also bring long-term, cost-effective benefits, she said. “Although the initial set-up costs can be high, it can be extremely cost-effective over the longer-term and you may be eligible for government rebates."
