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Where does all the money from your electricity bill go?

Created: Mon, 21 Oct 2019

While some of your Electricity Bill can be directly attributable to the volume of electrons that flow into your gadgets, appliances etc - a good portion of it has nothing to do with your electricity consumption.

Where does all the money from your electricity bill go?

Every month or quarter, a bill comes in from your electricity retailer. While some of that bill can be directly attributable to the volume of electrons that flow into your gadgets, household appliances, lights and other energy-eating devices, a good portion of it has nothing to do with your electricity consumption.

As well as electrons, that bill needs to pay for the infrastructure, meter readers, data management and other bits and pieces that make the power system work.

Electricity prices in most states are set with a ‘standing offer'. Think of that as being the recommended retail price. But most energy companies then offer discounts for early payment, allowing direct debits or just to undercut their competition.

The Australian Competition and Consumer Commission (ACCC) says the average NSW household could save between $550 and $700 per annum by switching from the incumbent retailer's standing offer to the best market offer.

Small and medium businesses could save between $1450 and $2250 per year by switching.

Energy prices have been increasing each year and the offers retailers make into the market do change quite often.

Our advice:

  • Check the market at least once a year
  • Avoid long-term contracts
  • Let your retailer know you're planning to switch - they might offer you a better deal to stay
  • Look at your energy use for ways to curb your consumption.

Author: Ross from EnergyIQ