How is Bill Value calculated?
Daily connection fees
Daily connection fees are a fixed amount per day that you’ll pay for connection to your energy distribution network.
Your energy retailer does not run the distribution network, and is not responsible for the supply of energy to your home.
Connection and supply is managed by your distributor, which charges your retailer a set daily rate which varies by tariff or meter type.
Retailer then pass that connection fee onto consumers, and may mark up the daily fee by differing amounts.
For WattPrice, we calculate a quarterly value for the daily connection fee, by multiplying the daily fee by 365.25 (365 days in a year, and the extra quarter day accommodates leap years)
Consumption fees vary according to tariff or meter type. There are four main classes of tariff:
A. Single Rate:
Where the same price is charged per unit of consumption. This is the most common meter type. Some single rate pricing models include stepped pricing where the rate can change as consumption level crosses certain thresholds.
B. Controlled Load:
Where there are two separately metered supplies of electricity with different pricing for each. This is typical in households with electric hot water or with dedicated electric heating appliances such as slab heating.
C. Peak / Off Peak:
Where there are different prices charged according to the time of day.
D. Time of Use (or Flexible tariffs):
Where the price per unit changes across three separate time bands: peak, shoulder and off peak.
We determine your meter type from the answers to our ‘energy profile’ questions, and we estimate your average daily consumption with reference to benchmark data provider by the AER. Further information on this study is available on the AER website here: www.aer.gov.au/node/29297.
You can also directly specify your daily consumption if you already know it - for example if you have a bill handy.
Note that because it’s not realistic to estimate time of use consumption, WattPrice does not currently support Peak / Offpeak or ToU/Flexible tariff types.
Many retailers promote incentives for their energy products.
Incentives are usually offered as sign-up bonuses.
We apply cash and cash-equivalent incentives pro-rata over one year.
For example a $100 rebate or sign-up bonus will manifest as a $25 reduction in the quarterly bill value that is used to calculate WattPrice.
Other kinds of non-cash incentives such as footy jumpers or movie tickets are not included in our WattPrice calculation.
Discounting has become one of the main ways retailers compete and market their products, and it’s not uncommon to see discount rates of 40% or more.
While large discounts might intuitively look attractive, remember that retailers also control the base prices that the discounts are calculated against, so a large discount is no guarantee of a competitive price. Sometimes products with no discount at all can be the most cost effective.
Discounts are very often contingent on on-time payment, and some retailers may also offer additional discounts for customers who are prepared to pay via direct debit, or to pre-pay.
Discounts are usually applied either to the entire bill amount, or to the consumption charges only.
Your ability to access available discounts can be one of the most significant price impacting factors in your energy bill.
We include the impact of discounting into WattPrice as follows:
We always apply 100% of any guaranteed or unconditional discounts available with any energy product.
Where you say you never pay on time, we do not apply any conditional discounts to your bill.
Where you say you sometimes pay on time, we will apply 50% of the conditional discount to your bill, but none of the incremental direct debit discount that may also exist.
Where you say you always pay on time, we will apply 100% of conditional discounts to your bill, but none of the incremental direct debit discount that may also exist.
Where you say you’re prepared to pay by direct debit we will apply 100% of conditional discounts, plus 100% of any incremental direct debit discounts that may also exist.
All of these variations will be applied to either the entire bill amount or to the consumption charge amount as appropriate.
WattPrice currently does not take into account:
- Pensioner and other forms of concessions. See our FAQ What about Pensioner and other energy concessions?
- Time of Use (ToU) tariffs incluing peak/offpeak and Flexible or peak/shoulder/offpeak tariffs. See our FAQ What are Tariffs?
- Solar Feed-in Tariff (FiT). We do display the minimum FiT for each solar offer, but currently do not calculate the price impact of FiT on your estimated quarterly bills. See our FAQ How does Solar impact on WattPrice?