Your electricity bill is made up of a variety of charges. These charges depend on the agreement you have with your retailer, and potentially other parties, including network and metering companies. These may be bundled together in a simplified manner, or individually itemised.
Let’s take a close look at the different components as it will help to understand how these different charges are used by Powertracer.
Tariffs
Tariffs specify the amount of money you are charged to be supplied with electricity. Tariffs can be either bundled or unbundled.
Unbundled tariffs - each of the different charges are individually itemised so you see what each individual charge relates to
Bundled tariffs - all the charges that contribute to your tariffs are bundled together and simplified into single charges
We classify the charges into three main classes. These are Standing Charges, Volume Charges and Capacity Charges.
Standing charges
These charges don’t depend on how much electricity you use. Examples of a standing charge include a daily supply charge or service charge.
Volume charges
Volume charges are based on how much electricity you use, and possibly when you use it. They may be quoted as either cents per kilowatt hour (c/kWh), or dollars per kilowatt hour ($/kWh), or similar in your local currency. Examples include consumption charges.
There are many different tariff structures with variable rates that are dependent on things such as:
the time of the day
the day of the week
the season
Volume charges are used to pay for:
Energy charges - this is for the energy consumed from the grid
Network charges - these are paid to the network operator that distributes electricity to customers and owns and maintains the electricity network poles and wires, an example is Ausgrid
Environmental charges - these charges fund the programs which provide rebates for installation of solar PV systems
Market charges - these charges are for market participation and services that include activities to ensure safe and secure power delivery
So for the volume energy that you use, there are many items that you pay for based on that volume – not just the energy from generators. For example, you may be on a flat tariff with your retailer at 25c/kWh. They may have an energy cost of 12c/kWh, with network charges at 9c/kWh, leaving environmentals, market and other charges making up the other 4c/kWh.
In Powertracer we use the generator energy volume charge as the basis for the tradeable energy tariff – or energy charge. You can only trade this portion of the volume charge, not the whole charge per kWh. An example from Powertracer is below showing the feed in tariff as 3c/kWh and the energy charge as 12.6c/kWh:
Capacity charges
These are based on the amount of capacity you require. Capacity charges are often applied to business customers, and are becoming more common for residential customers, and are reflective of network tariff changes.
Additional fees and charges
Retailers sometimes have other charges under your contract with them. These may include:
Membership fees
Meter fees
Network access charges