How much should you be paying for electricity? It’s a question we get asked a bit and the answer isn’t as complicated as you might think. At the time of writing (and some things do change quickly) a good deal is around 90 cents for supply and under 20 cents for usage. We’ll explain supply and usage a bit later. This is a straight price, not a ‘pay-on-time’ discounted price. We have seen this price up to $1.40 for supply and up to 47 cents for usage (often with a small discount applied).
What you can save
So how much difference does the deal you get matter? Let’s say you use 20 kilowatt-hours (kWh) per day and save 5 cents per kWh. That works out to $1 per day or $365 per year. It’s a pretty decent saving. (Kilowatt-hours are just a unit of measurement that electricity is charged in; a litre of water, a kilo of flour, a kWh of electricity.)
The basics to checking how much you should/could be paying for electricity are:
- Go to the Victorian Energy Compare website (it’s a government-run site)
- See who offers the best deal
- Call your provider to match the deal
- If they can’t match the deal (or get close to it) look at how hard it is to change providers
- Sit back and enjoy the savings
Supply and usage
Let’s cover some basics so you have a better understanding of your bill. What you pay for electricity is made up of two components, supply and usage. Supply is a fixed daily cost to deliver energy to your property regardless of how much energy you use. Usage is based on how much energy you use and is measured in kWh.
Understanding your bill
Look on your bill (go get it, plenty of time). There should be a graph, which tells you your average usage. On the back of the bill there will be a breakdown of the charges, usage and supply, (see images for where these charges are recorded on the bill). Using this information:
- Note how much you are paying for each.
- Deduct any discounts you may be getting – but if the discounts are ‘pay-on-time’ discounts don’t count them unless you always pay on time.
Now do the maths.
- Are you beating 90 cents for supply and under 20 cents per kWh for usage?
- If not, it’s time to take action.
Steps to paying a fair price
Using your bill, go to the Victorian Energy Compare website and type in your details. Don’t worry, it’s a State Government website and you won’t be paying commissions or getting calls from salespeople.
See which company offers you the best deal and what it is. Write down the company and the usage and supply charges.
Call your current provider (their contact details are on the bill) and ask them to beat the price you have. Tell them the price to make it quicker and easier. You may want to work out what discount they need to give you to match the alternative pricing before you call, it makes it harder for them to bamboozle you. Also ask if you are currently locked into a contract.
If they can beat the price or get very close to it, congratulations, you just saved a stack. While you’re there, check to see you are getting any discounts you are entitled to such as: pensioner discounts, medical cooling and other discounts.
If your current provider can’t beat the price or get close to it and you are not locked into a contract… Decide if swapping companies is something you want to do in order to make the savings. But sticking with your current provider and seeing if they will match the price is always the best first step. Those five steps could save you a significant amount of money. And if you are having any issues check out https://www.ewov.com.au/resources/fact-sheets they provide a range of fact sheets and a great service to help anyone who is having issues with their energy or water company.
Every year, repeat the process to make sure you always get the best deal.