Tuesday, December 17, 2013

A Hidden Reason Why Your Electricity Bill Rises

Always Check Your Electricity Bill
Always Check Your Electricity Bill
Checking the electricity block rate on your electricity bill is very important, when attempting to stay on top of rising power costs.

Whilst householders checking the tariff rate of the electricity bill can be praised, what is being missed by many, is the checking of the block rate quantities. 

In Australia you can be currently billed for your electricity on a single rate, block rate or time of use rate.

When electricity is billed using the block rate method, a consumer will be billed at different electricity tariff rates, for the different quantities of power used. For a sample home using 5000 kWh per bill we would expect to see on the electricity bill,

      0 to 1750 kWh at 24.5 cents per kWh = $428.75.
      1751 to 2750 kWh at 25.5 cents per kWh = $254.74.
      2751 plus at 34.5 cents per kWh = $776.25

      Total Cost Of Electricity Used = $1459.74.

So whilst you may be aware of the fact there is no change to the electricity tariff rate, whilst you are looking back over recent quarterly electricity bills, the size of the block quantity may have changed. And this change can be applied without notice at anytime by the electricity retailer.

It is up to you to notice this change, when you are investigating why your electricity costs have risen, when usage seems to be the same.

We would like to see any changes to the rates, easily summarised on the first page of electricity bills in Australia. Seems to difficult for the electricity retailers we have spoken to though!

Now there are a lot of homes in Australia being caught out by this type of change, where householders report the price of their electricity has not changed, nor the usage. And the question to our office is, "Why has my electricity bill gone up when nothing has changed?" Of course we know something has always changed!

So whilst the electricity tariff rate has not changed, when the block quantity does, this means you are now using more of the higher cost electricity. So your electricity bill rises and you are left scratching your head wondering why.

We know of households where the electricity rate has remained the same over a year, but the block quantity has changed with every electricity bill. We know householders do not see this change, until we point it out to them! 

So whilst it is good practise to focus on the kWh rate, make sure you also focus on the block quantity rate. Let us change the block rate in the above example, to show you this common hidden reason why the bill has risen.

      0 to 600 kWh at 24.5 cents per kWh = $147.00.
      601 to 1200 kWh at 25.5 cents per kWh = $152.74.
      1201 plus at 34.5 cents per kWh = $1311.00.

      Total Cost Of Electricity Used = $1610.74.


Now that is rise of $151 per bill, due to changes with the block quantities, when the tariff rate has remained unchanged. Showing you, you do indeed need to pay attention to the block quantity rate of every electricity bill, to stay on top of your power costs. 

This blog post and podcast brought to you by Aussie Home Energy, a major player in the HOME ELECTRICITY REDUCTION SERVICES industry in Australia.

1 comment:

  1. I would like to concur with your observations about changes to block/tier allowances.

    My 2011/12 block/tier rates were based on an average daily usage of approx. 19 kwH up to an allowance of 1840 kwH


    My 2012/13 block/tier rates were based on an average daily usage of approx. 11 kwH for the first 1000 kwH and then on an average daily usage of approx. 11 kwH over the first 1000 kwH and so on.

    So far my 2013/14 block/ tier rates are based on an average daily usage of approx. 11 kwH for the first 1000 kwH and then on an average daily usage of approx. 11 kwH over the first 1000 kwH and so on.

    My retailer did not provide any explanation as to why the block/tire allowance changed from being based on approx. 19kwH to being based on approx. 11kwH.

    Despite my annual electricity consumption going down by 15% between 2011/12 and 2012/13, my bill only went down by 6%, primarily due to the unexplained change in block/tier allowance.

    There appears to be nothing that can be done about electricity suppliers reducing the block/tier allowances as they see fit.

    Are electricity suppliers reducing the block/ tier allowances because consumers are reducing their electricity consumption?





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