Decode Your Energy Bill: What Every Household Should Know
Published July 1, 2026
Ever been baffled by all the tariffs and costs and kilomajigs on your energy bill? Well, be baffled no more. We’ve prepared this handy guide to help you distinguish between your kilowatts and kilojoules.
Contracts
Standing Offer Contract: It is the basic energy contract you sign if you haven’t signed up for any other contract offered by any other retailer. The price of a standing offer contract is set by your state or territory government or the independent regulator, except for New South Wales, South Australia and Victoria where the retailers set the prices.
Market Contract: is an energy contract that you can negotiate with the retailer to get the best deal for your energy. Ever since the deregulation of the Australian energy sector in 2001, there has been a tremendous increase in the number of energy suppliers out there, making you able to select your price and service preferences.
Fixed Term Contract: is one form of a market contract which has a term stating the date of termination of the contract or a process through which the date of termination is determined.
Your energy bill tariffs
A tariff simply means the cost of energy under a given contract and has two elements which are fixed charge tariff and variable charge tariff.
Fixed Charge: This is the charge for supply of the gas or electricity to your premises every day, irrespective of the consumption of energy during the billing period.
Variable charge: This is the amount charged for the consumption of energy and is measured in cents per kilowatt hour (c/kWh) for electricity and cents per megajoule (c/MJ) for gas. Please note that the units of measurement for gas and electricity are different. Kilowatt is 1000 watts while megajoule is a million joules. There are also other tariffs in relation to the variable charge and you need to be very careful with when trying to negotiate your market contract with a new retailer. These include:
Quick Reference: Common Terms on Your Energy Bill
| Energy Bill Term | What It Means | Typical Unit |
|---|---|---|
| Daily Supply Charge | A fixed daily fee for connecting your property to the electricity or gas network, regardless of how much energy you use. | Cents/day or $/day |
| Usage Charge | The amount you pay based on the energy you consume during the billing period. | c/kWh (electricity) c/MJ (gas) |
| Peak Rate | The highest-priced period for electricity usage, typically during times of high demand. | c/kWh |
| Shoulder Rate | A mid-priced period that falls between peak and off-peak times. | c/kWh |
| Off-Peak Rate | The lowest-priced period for electricity usage, usually overnight or during low-demand hours. | c/kWh |
| kWh (Kilowatt-hour) | The standard unit used to measure electricity consumption. | Electricity |
| MJ (Megajoule) | The standard unit used to measure natural gas consumption. | Gas |
Single Rate Tariff: This is quite self-explanatory. The single rate charged for the electricity consumed irrespective of the time of consumption. They are also the most common type of tariffs.
Block Tariff: this simply means that it sets a cap which divides your consumption into several blocks of tariff, where each block is billed at different rates. Block 1 – for example from 0 to 1500 kilowatt hour (kWh) is billed at one rate, but block 2 – 1500 to 3000 kWh is billed at a different rate.
Time of Use Tariff: certain contracts within the market will charge you depending on the time during the day your energy is consumed, and each period is subject to a different price level. Usually there are two or three price levels in any particular contract – these are peak, off peak and shoulder. The peak is the most expensive while off peak is the cheapest, shoulder is in between.
Fees on your energy bill
Exit fees: When you decide to change supplier, you may be subjected to an exit fee when you terminate the contract before the expiry date of the contract, although this is usually applied to retail market contracts only.
Frequently Asked Questions
The daily supply charge is a fixed fee that covers the cost of connecting your home to the electricity or gas network. You pay this charge every day, regardless of how much energy you use.
A standing offer is the default energy plan offered by your energy retailer, while a market offer is a competitive plan that may include lower rates, discounts, or additional benefits. Comparing market offers can help you find better value for your household.
A time-of-use tariff charges different electricity rates depending on when you use energy. Peak periods are the most expensive, off-peak periods are the cheapest, and shoulder periods are charged at a rate in between. This type of tariff can help you save money if you shift your energy usage to lower-cost times.
Signing up for Utility Market will ensure that there will be no tariffs, charges, and kilowatt worries, because Our team does the negotiating for you. You just have to relax and bask in the knowledge that you’ve signed up for the best energy deal possible. Join the revolution now!
For understanding your energy bill, trust Utility Market to help you compare energy plans and find better-value options for your home. Follow us on Instagram for more practical energy-saving tips, guides, and the latest updates.
