UNDERSTANDING
CHARGES AND TARIFFS

With a Time-of-use tariff,  you will be charged different rates for your electricity at peak, shoulder, and off-peak times. The times that are considered peak, off-peak, and shoulder will vary between distributors. Peak rates usually apply in the evening on weekdays, off-peak rates usually apply overnight and on weekends, and shoulder rates apply between peak and off-peak times. A time-of-use tariff might be best for you if most of your electricity use is during off-peak times.

A flat-rate or single-rate tariff means that the rate you pay for electricity (measured in cents per kilowatt hour or c/kWh), will remain the same through the day. There is no difference between what you pay at peak times and what you pay at off-peak times. This rate usually works out to be lower than typical peak rates but higher than off-peak rates. A flat rate tariff might be best for you if you use a lot of electricity during peak times.

A controlled load (or dedicated circuit) is a separate tariff for specific appliances, such as underfloor heating, electric hot water systems, or a heated pool. These appliances have high electricity consumption and will usually have a separate meter and circuit. With a controlled load electricity will only be supplied to the nominated appliance for a certain number of hours each day, typically during off-peak times. The electricity you use on a controlled load circuit will be billed at a lower rate to the rest of your electricity usage.

Growth of overall electricity demand has traditionally been consistently with the growth in peak demand.

In recent years however this trend has changed, with overall demand declining steadily, whilst peak demand continues to grow. This is a significant issue for network operators who are responsible for the reliability of our electrical infrastructure and means that traditional electricity tariffs no longer fairly reflect the costs of building and maintaining the network. A common analogy is that it is similar to building six lane freeway where four of the lanes are only used on public holidays. It is a huge cost imposition to build such infrastructure whose

As such, “Cost Reflective” pricing was introduced to incentivize customers to reduce peaks in their load. This provided a pricing penalty for consumers who chose to turn on all of their appliances at the same time rather than spreading their load throughout the day.

There are a few different ways in which demand can be calculated depending on the network and customer type, but generally a separate “demand charge” is applied based on the highest amount of power you draw from the grid in a particular period of time. Spreading out your demand, for example by turning on all of your appliances at different times rather than all at once, will reduce your demand charge.