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Understanding Electricity Costs

UNDERSTANDING YOUR ELECTRICITY COSTS To understand the costs that make up your electricity bill, it helps to know a little about what goes on behind the scenes. COSTS INCURRED ALONG THE ELECTRICITY SUPPLY CHAIN THE GENERATORS THE NETWORKS THE RETAILERS Electricity is produced from coal, natural gas and renewable energy sources by ʻgeneration' businesses. Their costs include: Retailers manage the procurement and supply of electricity on your behalf. Their costs include: Network businesses own and operate the transmission and distribution systems, often referred to as the 'grid'. •buying fuels (coal, gas, water, biomass) •helping make sure you're connected to the grid vork businesses incur costs associated with building and maintaining infrastructure and fixing faults and damaged power lines. •investing in and building power plants •managing your customer account •maintaining and operating the plants. •providing customer service. COSTS REFLECTED IN YOUR ELECTRICITY BILL TYPICAL ANNUAL COST OF ELECTRICITY Although not all bills are the same, generally, they cover the following costs: In Australia, the average household consumes about 6.5 MWh of electricity a year. GST Networks Government green schemes 6.5 MWh per year = $1,500 to $2,500 COSTS Retailers Generators Networks: Paying for the maintenance, upgrading and operation of the grid. What the typical household pays for electricity each year varies, based on: Generators: The cost of creating the electricity. •geographic location and climate •the type of contract they have with their retailer Retail services: Helping to connect you to the grid, managing your account and customer service. •whether they use gas for heating and cooking Government green schemes: The national Carbon Price; Renewable Energy Target and other state based schemes such as solar feed-in-tariffs. •home size, number of appliances and energy management practices. GST: Your bill is also subject to the goods and services tax. HOW CAN YOU REDUCE YOUR ELECTRICITY BILL? There are simple things you can do: Not leaving appliances on standby could help you save around 10% or $200 per year. Energy saving activities Investigate the various types of energy plans and payment options your retailer offers. Review your energy plan Look at time-of-use pricing and shift your energy usage to low demand/cheaper times of the day. Time of use tariffs For more energy information visit Energy Explorer at www.ORIGINENERGY.COM.AU/ENERGYEXPLORER MAY 2013 origin

Understanding Electricity Costs

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Understand the costs that turns up on your electricity bill by understanding what happens behind the scenes


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