How to read electricity bill

So why read your electricity bill anyway? It’s hardly a good read, and you already know exactly what happens in the last chapter of this rollicking non-fiction. Yes, you will pay a heap of cash.

Sadly, this little read is just one in an endless series. Month after month or quarter after quarter, depending on the ‘publisher’, a new one arrives via the snail mail in a special window envelope, or via email.

For most of us, we read the first part, our address, just to make sure it’s ours. Then, we skip to the punch line: a series of numbers preceded by a dollar sign, followed by a deadline.

It’s a story that ends with a call to action: you have to pay a bill. It’s a tragic story of Shakespearean proportions.

Knowing how to read your electricity bill in detail plays a critical role in helping you reduce your bill, and sometimes quite significantly.

And, no, just promising to read and understand the details of your bill won’t magically reduce your bill. You need to make changes to your usage habits.

Understanding the numbers and charts on your bill will allow you to make informed decisions about how to develop new habits that are conducive to reducing power use, and therefore reducing your electricity bill.

Simply put, it will mean more money in your pocket and less spent on ‘renting’ your power.

Introduction

We’ve already covered the changes you can make in the home to reduce your bill. This handy little article is a guide to reading your electricity bill and understand it’s charts and numbers.

We’ll break it down into sections and address each section specifically. If there is a term you don’t understand, like kilowatt or kilowatt-hours, you can follow the link to our glossary page where you’ll find a concise definition.

The sample bill we are using for illustration purposes is an actual bill from AGL, an electricity company in Queensland. They have solar. Yours may not be exactly the same, but it will definitely be very similar, regardless of your retailer.

The blacked-out sections are personal account details, hence obscured for public view.

OK. Glasses and thinking caps on.

AGL Electricity Bill

A. Your Address Details

Straightforward but worth mentioning. If you’re struggling at this point, have forgotten your address or you don’t actually remember where you live, it’s probably best you don’t use electricity in the first place.

If the address on the bill is not yours, be courteous, return to sender.

B. Important Numbers

Many families have a list of important numbers strategically placed in the house, usually on the fridge, such as your emergency plumber, your GP, and the local Domino’s.

It’s a good idea to add the electricity supplier emergency number to this list. Things go wrong, and blackouts happen.

Making appropriate calls without having to fish for the right contact number is a convenient way to stay in the loop.

C. Your Account Details

This section has your electricity account details. You have an account at your retailer. Along with your name and address, you are identified by the retailer with an account number. Much like your bank account.

It might be a good idea to add your electricity account number next to the electricity supplier’s emergency number on your ‘important number list’.

D. Your Bill Overview

“Balance brought forward” is any amount you did not pay on the last bill (for whatever reason). It is added to the current bill.

“New Charges” is the dollar value of the amount of power, plus all other fees, you have accumulated in the last cycle. In this case $632.97, the cycle was between 19th Oct and 15th of January.

The “Total Due ($632.97)” it should be noted, for this retailer, is not necessarily the amount you will have to pay. That comes next.

“Discounted Amount if Paid by Due Date” is the amount that you will have to pay if you pay your account by the due date. In this case, $468.59.

The retailer is using a technique to get you to pay your account on time. They are saying, in essence, if you pay $468.59 on time we’re giving you a discount.

It’s easy to get cynical about this ploy: Is the first number simply inflated? Whatever the case, it’s a darn fine reason to pay on time.

“Due Date”—Yes, they want their money by the 7th of Feb. And, if you don’t…
“To avoid a late payment fee of $12.73, please pay by the due date.” If you’re late, they may also charge you the original ‘Total Due’.

NOTE:
Many retailers can be sympathetic towards those who cannot pay their account on time. BUT, you must inform them, and it’s best to do it ahead of time. They will suggest options for you.

E. How Much Energy Are You Using?

This is where the information gets interesting, and where you can begin to understand your usage.

Firstly, check the ‘SnapShot’.

The first number is the daily cost of your electricity ($7.11). It’s an interesting number, allowing you to compare how much you spend on electricity per day against other daily expenses.

For example, you may spend $4.50 per day on your second cup of coffee. Knowing that if you can save over half your electricity bill by cutting out your second cup of coffee each day can provide great incentive.

Get the idea now of how knowing the figures can help?

The second figure is your daily average electricity usage. It’s measured in kilowatt-hours (kWh). Your goal is to reduce this figure by using less power.

The retailer reaches this figure by using an equation that includes how much power your house needs to run at any moment, and how long the power runs.

The last figure in the snapshot allows you to compare usage on this cycle with the exact same period last year. In this case, the household is using more than last year.

You can now ask yourself some questions: What are we doing differently from last year? Did we install a pool, add an air conditioner, or have more guests more frequently? Or possibly install a solar system to reduce our reliance on the grid?

Now that you have a snapshot of your usage, take a look at the two charts. The first diagram, the houses, compares your usage with two other houses in the same area.

In this chart, you are told that your usage is higher than the others, so higher than average. Ask yourself why you might have greater power demands than other similar households.

The second chart is a column graph illustrating your daily usage. As you can see, during the hotter months, you use a lot more electricity than, say, June.

F. Advertising

Yes, it’s everywhere, even on your bills.

G. Useful Information

See ‘Important Numbers’. And where it says to contact them about “Anything, anytime”… Please note not to take it literally, it’s just electricity related. They probably can’t answer questions about your pet Beagle’s skin condition.

Now turn your bill to the other side.

Back of an electricity bill from AGL

H. Important Information

Read the list of items. You can decide what is important to you. Interpreters and payment assistance options are frequently accessed services.

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I. Your Electricity Supply Details

Let’s get into the details.

In the top section, under supply address, you will see Energy Plan ( 1 ). Different retailers offer a host of plans so that consumers can tailor their benefits to suit their lifestyles.

Now let’s break down the section underneath.

The date read ( 2 ) tells you the exact date a technician read the numbers on your electricity meter. The read type ( 3 ), in this case, is actual. This means that a technician physically came to your house and read the meter in the meter box.

Sometimes, the retailer cannot access your meter box. In which case, they will calculate your usage based on an average of your past bills.

The rate description ( 4 ) describes the type of electricity you were drawing and how much (the f at the end of the column).

Peak ( 5 ) refers to electricity that is used when consumer demand is at its highest. This is the most expensive electricity.

Controlled load ( 6 ) refers to a particular device in your house, such as your hot water system or pool pump. These devices are not plugged into a power socket as such, but hard wired.

Often, water heaters work on off-peak or controlled load tariffs. It’s cheaper electricity, yet guaranteed supply has limits. Essentially, your water is only heated when consumer demand for electricity is at its lowest. (See Tariff 31 ( 9 ) and CL31 ( 11 ).)

Solar ( 7 ) refers to the amount of electricity you pulled from your solar array. There is still a charge for using the power from your array. This is called a metering charge and is a relatively small cost.

A Supply Charge ( 10 ) is simply a fee for being attached to the electrical grid.

Other Charges ( 12 ). Oops, this household was late with their bill. A late fee was charged. A processing fee was also charged.

Processing fees ( 13 ) are a bit ugly. Essentially, you have to pay them. A little like a credit card fee.

Credits ( 14 ) are financial amounts given to you which decrease your bill, such as the pay on time 25% discount ( 8 ).

This home, having owned solar, has another credited amount in the form of Feed-in Tariffs.

Feed-in Tariffs ( 15 ) refer to the amount of electricity you have returned to the grid because of your solar generation. The electricity retailer is effectively paying you to generate ‘clean’ electricity from your solar panels. It provides a substantial discount to the overall bill.

The last two figures, Total Due ( 16 ) and Total Due if Paid by Due date ( 17 ), have already been explained earlier.

J. How to Pay Your Bill

Underneath the scissor line is instructions on how to pay.

There are now a number of convenient electronic ways to pay your bill. All the options are provided, with access numbers, bill numbers, bill totals, etc., provided nearby for convenience.

How To Read Your First Bill After Solar

Solar ( 7 ) refers to the amount of electricity you pulled from your solar array. There is still a charge for using the power from your array. This is called a metering charge and is a relatively small cost.

Feed-in Tariffs ( 15 ) refer to the amount of electricity you have returned to the grid because of your solar generation. The electricity retailer is effectively paying you to generate ‘clean’ electricity from your solar panels. It provides a substantial discount to the overall bill.

It’s worth mentioning that the feed-in tariff line item is “what is left over”.

That’s the energy left over from your solar system, that went to the grid. You get a credit for this, but normally it’s worth less if you use the energy during the day.

Your goal should be to fully use your free electricity as much as possible. So a small value in a Feed-in Tariff is actually a good thing. It means you are using your system to get your consumption down.

The main benefit is that your daily usage should plummet. If this is not happening, you need to do more by day when you have free electricity.

Conclusion

There you have it. It wasn’t that hard, was it? And now you can use this information to ask appropriate questions when talking to your retailer.

More importantly, you can now use your understanding of the figures to learn how you are using electricity at home. This will provide you with the data you need to make changes and introduce efficiencies.

You don’t know how you’re going, or where to focus your green and frugal intent unless you have the data. Understanding your electricity bill will set you on a path to a greener lifestyle and cheaper electricity.

Next Step

If you want to see how much solar or battery storage could save you over the next 5 years, then take our solar saving calculator quiz below!

Or talk to an Instyle Solar expert about the best solutions for home energy storage or PV-panels.

Otherwise, head back to the solar blog to find even more great educational content.

Photo credit: Depositphotos

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