Understanding a high electricity bill
Many factors can contribute to a high electricity bill. It is not necessarily a mistake. Understanding why your bill is high is a process of elimination. Is it because you have used more electricity? Is it because you are paying more for what you do use?
It is important to understand your bill before contacting your electricity retailer.
Taking time to read the bill properly and comparing it to previous bills will help you understand why the bill is higher; and then you will be able to address the issue more effectively.
Let us guide you through some of the most common causes of high bills.
When a bill is estimated, it is based on usage from the same time last year, and can often result in your estimated usage being lower or higher than your actual usage. If your circumstances have changed in the last year your usage will be different. For example, you may have acquired new appliances or had additional people staying.
Your next bill, based on an actual read, will bring your account back in line with the current reading on your meter. If your previous estimated bill was too low, your next bill may be higher than you expected. Similarly, if your bills have been overestimated, you will eventually receive a reduced bill.
No matter how many estimated bills you have received in a row, once an actual read has been taken, you will be billed for - and pay for - electricity you have actually used.
Next to the graph on the bill, you will see your ‘Average daily use’ for the current bill as well as for the same time last year.
‘Average daily use’ is calculated by taking the total kilowatt-hours of electricity used in the billing period and dividing the number by the number of days in that period. Comparing your current average daily use with that of the previous year, does it indicate you have used more electricity than last year?
To understand why you may have used more electricity, look at the billing dates on the bill and think about what happened during that period.
- Did somebody in your household spend more time than usual at home, or did you have guests staying?
- Did you use a heater or air conditioner more during a hot/cold period?
- Did you buy or use any additional appliances?
- Did you do any renovations or landscaping, using electrical equipment?
You can do your own estimation of how much electricity you use on a regular day.
To do this:
- Take a meter read at a set time on a typical day.
- Take another read the next day at the same time.
- The difference between the two meter reads is the amount of electricity you used in the last 24 hours.
When you compare your meter read with the ‘Average Daily Use’ on the high bill and find that you are using a high volume of electricity, you may need to seek advice on how to manage your usage and reduce future bills.
Remember, a small amount of additional usage each day can equals a significant increase in your bill.
Consider the following scenario:
- Your usage for the same quarter last year was 5 kilowatt-hours per day.
- This year your usage has increased slightly to 8 kilowatt-hours per day.
- So on average you have used 3 kilowatt-hours extra per day across your 90 day bill.
- 3 kilowatt-hours x 90 days = 270 kWh of additional usage in the quarter compared to last year.
- If you were paying 30c per kilowatt-hours for your usage that would equal to an additional $81.00 on your bill.
Your electricity contract will outline how your retailer is required to advise you of increases to your electricity rates.
They may notify you in writing, by a letter with the bill or by a notice on the bill itself.
Compare your high bill to your previous bill, or to the bill from the same time last year. Are you paying more per kilowatt-hour?
You may see ‘summer rates’ listed on your bill, with rates generally increasing over the summer months from January – March.
Keep in mind that a high bill may be a combination of an increase in your electricity usage and an increase in what you pay for usage.
If you have any questions about your rates or increases, you should contact your electricity retailer.
Had you paid all outstanding amounts before your current bill was issued? If not, then your bill is likely to include any previously unpaid amounts.
Your bill will show you two figures:
- ‘Balance bought forward’ – Any balance (still owed or in credit) at the time the new bill was issued.
- ‘New charges’ – The charges for the current billing period.
You may think you have received a high bill when in fact your new charges are in line with your previous bills. If old charges remain unpaid, they will be added to the new charges and the total owing will be a higher figure.
Do check that the meter number on the bill matches the meter number(s) at your property.
If they do not match you should immediately contact your retailer.
Are there any establishment fees, administration fees, connection or disconnection fees, late fees, early termination or exit fees?
Are any expected concessions missing?
If so, you should contact your electricity retailer.