Energy Bills Explained - How to Decode Your Electricity & Gas Bills
Electricity bills and gas bills are often confusing and hard to interpret. Unexpected or high energy bills may even give you a mild headache.
Once you know what to look for, they will make a lot more sense. Then you can get started on reducing them!
If you follow this checklist you should be able to:
- Track your energy usage with more accuracy,
- Find and fix billing errors,
- Uncover opportunities to reduce your energy bills.
To get started, take out a recent electricity bill and gas bill and have a look at the following details. Ideally, you should review 12 months worth as this will give you a good overview of your usage.
1) Energy Meter Number & Site Details
Check the following 'obvious' information before delving into things:
- Supply Address or Service Address. This is informative if you receive multiple bills for one property, such as at businesses. The site description is not always 100% accurate. But it will either specify the exact address of the property or the area covered by the bill.
- Meter Number. Compare the number found on your bill (if present) to that on your physical electricity meter or gas meter. They should match. The meter number will also help you find your meter if it's in a meter room with others (such as in an office building or residential unit block).
- NMI, DPI or MIRN. This is an overall metering point identifier which identifies your property. One metering identifier number can include several physical meters. This is the number you use to switch between energy retailers.
2) Average Daily Energy Usage
On your electricity bill look for the average usage in kilowatt-hours per day (kWh/day). Overall, this is the most useful figure and it's usually on the front page alongside a historical usage chart.
Average usage as shown on an AGL electricity bill.
If you have a gas bill, look for the same number reported in megajoules per day (MJ/day). Be sure to look across an entire year as gas usage is often much higher in winter.
Energy usage as shown on an AGL gas bill. Low usage indicates a gas stove and/or oven only.
3) Energy Bill Start & End Dates
Next, note down the period of time that each bill covers. This allows you to identify any seasonal variations in energy usage.
Here are some questions to ask as you review some recent bills:
- Is usage higher or lower than average in Winter or Summer? And if so, by how much does it vary?
- What might have caused these seasonal variations?
- Is usage going up or down year-on-year? (note the "same time last year" section in the above charts)
- Is your business closed for a few weeks over Christmas? Do you go away for a few weeks and leave your home vacant? Do your bills go down accordingly at these times?
See Also: How to Minimise Holiday Power Bills.
4) Meter Reading Details
Look out for Estimated ('E') rather than Actual ('A') meter reads.
Estimated readings occur when the energy company cannot gain access to the meter. Note: estimates are less common with smart meters, but they can still occur. Estimated reads are pretty much useless, so do not use them for an accurate indication of your usage. You would be better off taking your own meter reading to see where you stand.
Meter reading and tariff details on an electricity bill.
You will find similar details to the above on your gas bill. On a gas bill, the meter reading is often shown in cubic metres. This number is multiplied by an energy content value and a conversion factor to give you a final number in MJ. The conversion factor and energy content value vary based on your location.
Meter reading and conversions on a gas bill.
5) Tariff Structure
Quarterly Electricity Bills
Quarterly electricity bills apply to most households and small businesses. Even if you pay a monthly contribution to your bill, chances are it is still based on a quarterly meter reading.
The tariffs used can vary depending on the time of day, day of the week, time of year, or what is being powered. As such, it's important that you take a closer look at the details section of your bill. You may encounter one or several of the following:
- Regular tariffs - normally labelled First then Next. On these bills you pay a fixed unit rate for the first block of consumption per quarter. And then a higher rate for the balance of your usage.
- Time of use tariffs - usually labelled Off-peak, Shoulder, and Peak. On these bills you pay a different rate depending on the time of day or time of year. These three tariffs are common in New South Wales. In Victoria, the rates are often just Off Peak (for overnight) and Peak (during the day).
- Off-peak tariffs - which relate to an electric hot water system or other 'Controlled Load'. They are labelled Off peak 1, Off peak 2, or Tariff 31, 33, & 35 (Queensland), or Tariff 41, 42, 61, & 62 (Tasmania). On these electricity bills, you pay a reduced rate for over-night hot water heating or for dedicated heating circuits (Tasmania).
Monthly Business Electricity Bills
Most larger business and organisation receive monthly electricity bills. If your sites spend more than $30,000 pa on power it will most likely get a monthly bill.
The tariff structure on these bills is far more complex and may warrant a more thorough business energy audit. As you can see from the picture below, these bills contain many more line items than a quarterly bill.
An example monthly business electricity bill. It's time to get out the calculator to make sense of this!
Key things to note on monthly electricity bills:
- The usage rates look ridiculously cheap, but they're not. You need to add Usage Charges, Network Charges, Market Charges, and Other Charges up into one unified rate per kWh. Do this for each tariff category (eg. Peak, Shoulder and Offf Peak in the example above).
- You'll also notice a charge annotated as Peak Capacity or Peak Demand. It's measured in kW or kVA and is not the same as usage in kWh. Instead, it's a measure of the highest amount of power you draw from the grid in any given month or year.
Tariff Structure - Gas Bills
Gas bills, on the other hand, tend to be a lot easier to decode in terms of their tariff structure. In fact, with gas usage, you pay a lower rate as your consumption goes up, which is not always the case for electricity!
6) Electricity Bills With Solar PV Power
Households and businesses with solar PV panels need to look through their bill much more carefully. The usage chart mentioned in point 2 above should not be trusted if you have solar power. It's most likely showing only your 'net' usage.
Go to the details section of the bill and find total usage and total solar power generated (both listed in kWh). Then, divide these sub-totals by the number of days, to get a daily average.
Somewhat confusingly, the totals found on your bill do not reflect the sum total of your "usage" and "production." This is because solar power is usually 'Net Metered'. Your usage and power generation profile might look something like this:
Example of relative Electricity Usage (blue) and Solar Power Production (yellow) by time of day.
You should be aware of the following:
- Total usage on the bill actually only refers to the blue or 'Purchased Power' section of the above chart.
- Total solar production on the bill refers to the yellow or 'Exported Power' component. This is the power sent to the grid.
- The part where they overlap ('Offset Power') refers to solar power that is consumed directly on site. This is also often referred to as 'Solar Self Consumption'. This power never leaves your property. As such, it is somewhat invisible and does not appear on your bill.
This is really important to understand if you have solar panels (please re-read it!). Now, to work out your 'Offset Power' you'll need to deduct 'Exported Power' from total solar power generated.
To do this, go to your solar inverter and find the "System Total" figure in kWh. Write this down along with the estimated installation date. Don't worry if you do not know the exact date. If the system is a few years old and you know the date within a few months, that is good enough. You can then divide this total by the number of days for an average daily solar production figure in kWh/day.
If you have no clue when the system was installed, that's okay. I'd still encourage you to write down the System Total figure and today's date. This way you can repeat this check in a year (or sooner), to get an accurate average figure.
See also our solar energy monitor to help track your energy usage and solar power production.
7) Usage and Pay-On-Time Discounts
Finally, check if you are receiving any discounts off the standard electricity and gas tariffs. At the time of writing, usage discounts of 15 to 30% are commonly available in NSW, Victoria, South Australia and Queensland.
As an example, I just logged in to my provider's website and found out I can get a 23% discount (up from 16% currently). Do some research online first. Calling up your existing retailer and asking them to match another offer avoids the hassle of changing suppliers.