Electricity Prices Explained

By Marcu

September 24, 2015

<td style="text-align: center" colspan="2" width="130">
  <strong>Price</strong>
</td>

<td style="text-align: center" width="65">
  <strong>excluding GST</strong>
</td>

<td style="text-align: center" width="65">
  <strong>including GST</strong>
</td>

  <p style="text-align: left">
    <strong>(First 16.45 kWh/day)</strong>
  </p>
</td>

<td style="text-align: center" width="65">
  16.3000 c/kWh
</td>

<td style="text-align: center" width="65">
  17.9300 c/kWh
</td>

<td style="text-align: center" width="65">
  17.0000 c/kWh
</td>

<td style="text-align: center" width="65">
  18.7000 c/kWh
</td>

<td style="text-align: center" width="65">
  106.0000 c/day
</td>

<td style="text-align: center" width="65">
  116.6000 c/day
</td>

<td style="text-align: center" width="65">
  5.3000 c/kWh
</td>

<td style="text-align: center" width="65">
  5.8300 c/kWh
</td>

This is the electricity price breakdown for the area I live in. All prices are in Australian dollar. GST refers to the Goods and Services Tax which is a 10% tax levied by the government.

Lets analyse the different sections. Since I cannot claim back GST like a business, I will only focus on the prices inclusive of GST. The first Tariff, Peak Step 1, shows the price I will pay as long as my daily usage is less than 16.45kWh. This stepped tariff system aims to incentivise people to use less electricity. So for every “unit” or kWh of electricity that I use under the Peak Step 1 tariff I get charged $0.1793. Every unit after the 16.45kWh threshold is charged at the Peak Step 2 rate, costing me $0.187 per unit, 4.3% more.

The “Service to Property” charge is a daily flat rate charge that covers the cost of maintaining the infrastructure to provide electricity to where I live. This charge is paid irrespective of how much you use and even applies to people who have solar energy that they sell back to the electricity company. In some places this is not a separate fee and the charge is incorporated in the electricity unit price.

The last cost, GreenPower, is the premium I choose to pay voluntarily to ensure that my electricity is supplied by renewable energy sources. In the case of this supplier the power is generated using the Snowy Hydro power generation scheme.

So all inclusive I pay $1.166 per day as my connection fee and then $0.2376 per kWh as long as my usage is less than 16.45kWh per day.