Time of Use Tariffs Explained

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Are you one of many Australians who turn the dishwasher on late at night, or wash your clothes on the weekends? Despite having a round-the-clock supply of energy in our homes, there are specific types of tariffs (the way you’re charged for electricity) that may help you take advantage of cheaper energy rates, depending on the time of day. One of these tariffs is called a ‘time of use’ tariff.

As you’re more than likely aware, Australia’s energy grids reach peak demand during certain hours of the day, such as weeknights. This means the price you pay for electricity usage at 4pm on Mondays is generally more expensive than using energy at 10pm on Saturday. That’s why it’s important to understand the different types of energy tariffs, as you could potentially be saving on power costs.

In this guide we cover everything you need to know about time of use tariffs, including electricity peak and off-peak times, how this type of tariff compares to others, and if it’s suitable for your needs.

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What is a time of use tariff?

A time of use tariff charges your electricity usage at three separate rates depending on the time of day.

Peak Off-Peak Shoulder
●        Most expensive electricity rates

●        Generally, on weekdays from 4pm to 8pm

●        Least expensive electricity rates

●        Usually, overnight and on weekends

●        Slightly cheaper than peak rates

●        Typically, between peak and off-peak periods

General guide only

In order to take advantage of peak and off-peak usage periods on a time of use tariff, you must have a smart meter. Provided you have a smart meter and your electricity retailer offers a time of use tariff, you will still be billed for two different charges; a usage charge and a supply charge. A time of use tariff only applies to the usage charge portion of your energy bill. You should only be on a time of use energy tariff if you have specially chosen to do so.

  • If you see different rates on your bill and it looks like you’re on a time of use tariff, but you didn’t opt to do so, you should contact your retailer straight away. Used incorrectly, a time of use tariff can end up costing you way more than it needs to.

Time of use tariff on your bill

Keep in mind that some electricity retailers list their time of use tariff bills as “flexible pricing”, or something similar. Here is an example of a time of use tariff from EnergyAustralia below. Take notice of the periods listed as peak and off-peak, which have different usage rates.

Time of use tariff on bill

Electricity peak and off-peak times explained

The peak and off-peak times on a time of use tariff will depend on your energy retailer and which distribution network you live on. We’ve listed times from AGL, Origin Energy and EnergyAustralia below. If you’re with a different retailer, you can find their peak and off-peak usage times, and charges, by reading their energy price fact sheets.

Peak and off-peak electricity times NSW

There are three energy distribution networks in New South Wales: Ausgrid, Essential Energy and Endeavour Energy. Peak and off-peak electricity times in NSW will vary depending on which network you’re on, as well as which energy retailer you’re with. We’ve listed peak and off-peak times for AGL, Origin Energy and EnergyAustralia below.

AGL peak and off-peak electricity times NSW

  • Peak usage rates: 2pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Sun
  • Shoulder rates: 7am to 2pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

Origin Energy peak and off-peak electricity times NSW

  • Peak usage rates: 2pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Fri
  • Shoulder rates: 7am to 2pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

EnergyAustralia peak and off-peak electricity times NSW

  • Peak usage rates: 2pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Fri
  • Shoulder rates: 7am to 2pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

The above usage rate times are for residential customers on the Ausgrid distribution network. Keep in mind that peak and off-peak rates will vary on the other distribution networks.

Peak and off-peak electricity times VIC

There are five different energy distributors in Victoria, including Citipower, Jemena, Powercor Australia, AusNet Services and United Energy distribution. Peak and off-peak electricity times in Victoria differ between distributors and energy retailers. We’ve listed peak and off-peak times for AGL, Origin Energy and EnergyAustralia below.

AGL peak and off-peak electricity times VIC

  • Peak usage rates: 7am to 11pm, Mon-Fri
  • Off peak usage rates: 11pm to 7am, Mon-Fri | All times, Sat-Sun
  • Shoulder rates: Not applicable

Origin Energy peak and off-peak electricity times VIC

  • Peak usage rates: 7am to 11pm, Mon-Fri
  • Off peak usage rates: 11pm to 7am, Mon-Fri | All times, Sat-Sun
  • Shoulder rates: Not applicable

EnergyAustralia peak and off-peak electricity times VIC

  • Peak usage rates: 7am to 11pm, Mon-Fri
  • Off peak usage rates: 11pm to 7am, Mon-Fri | All times, Sat-Sun
  • Shoulder rates: Not applicable

Residents in Victoria have access to two time-based tariffs – a traditional time of use tariff and a ‘flexible pricing’ tariff. The above usage rate times are based on the traditional time of use tariff for residential customers on the Citipower distribution network. Keep in mind that peak and off-peak rates will vary across the other distribution networks.

Peak and off-peak electricity times QLD

In south east Queensland, Energex is the only energy distribution network for residential customers. With this in mind, peak and off-peak electricity times in QLD will be set by Energex and your energy provider. Take a look below at some peak and off-peak times for AGL, Origin Energy and EnergyAustralia.

AGL peak and off-peak electricity times QLD

  • Peak usage rates: 4pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Fri | 10pm to 7am, Sat-Sun
  • Shoulder rates: 7am to 4pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

Origin Energy peak and off-peak electricity times QLD

  • Peak usage rates: 4pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Fri | 10pm to 7am, Sat-Sun
  • Shoulder rates: 7am to 4pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

EnergyAustralia peak and off-peak electricity times QLD

  • Peak usage rates: 4pm to 8pm, Mon-Fri
  • Off peak usage rates: 10pm to 7am, Mon-Fri | 10pm to 7am, Sat-Sun
  • Shoulder rates: 7am to 4pm & 8pm to 10pm, Mon-Fri | 7am to 10pm, Sat-Sun

The above usage rate times are for residential customers on the Energex distribution network.

What is a smart meter?

Otherwise known as a digital meter, a smart meter is a device that helps customers on a time of use tariff monitor their electricity usage. Smart meters are essential for flexible pricing as traditional meters can only record energy use at one rate. Smart meters also provide electricity retailers with regular updates of a customer’s electricity usage, and unlike traditional meters, do not require manual meter readings.

Aside from tracking your energy consumption, smart meters can also:

  • Allow the electricity supply to be switched on or off remotely
  • Alert the electricity distributor when there is a power outage

How do smart meters work?

By using live-usage technology, a smart meter works by recording your electricity usage per kilowatt hour (kWh) up to every 30 minutes, with the information then sent to your energy provider for billing. Smart meters are usually attached to time of use tariffs, allowing customers to capitalise on an array of in-house statistics which helps track energy costs.

What is the best electricity tariff?

best electricity tariff?

Finding the best electricity tariff shouldn’t just be about cheaper rates. You should consider all of the features of an energy plan, like discounts and benefit periods, plus sign-up incentives. Each type of tariff will have an impact on your overall energy costs, so it’s important to do your research and work out which one is best suited to you.

In summary, a time of use tariff could be great for people who consume energy during off peak hours and want to track their electricity usage with a smart meter. On the other hand, a single rate tariff may be ideal for Aussies who rely on energy at all times of the day, or if they live in an area where smart meters are not yet offered. Furthermore, a block rate tariff could be suited to customers in NSW or households in Victoria on the AusNet distribution network who prefer to be charged for electricity via consumption blocks, while a controlled load tariff may be ideal for customers wanting to allocate separate metering for high-energy usage appliances, like hot water systems.

Which energy providers offer time of use tariffs?

Depending on where you live and if you have a smart meter installed, the following energy providers offer time of use tariffs:

Please be aware that not all of these energy retailers offer time of use tariffs in all states and territories.

Is a time of use tariff right for you?

A time of use tariff can be a viable choice if you are time conscious of when you use energy. Given that time of use tariffs give you access to cheaper electricity rates during off peak times, you could decrease your energy bills. However, it’s worth noting that your tariff is not the only aspect contributing to overall electricity costs.

For example, you might get more value out of a single rate tariff if you’re not fussed about what time you use energy, as peak usage rates on a time of use tariff are generally more expensive than usage rates on a single rate tariff. Your decision will also be influenced by where you live, as time of use tariffs may not be offered by your distribution network and your electricity retailer.

Picture credits: vchal/Shutterstock.com, Proxima Studio/Shutterstock.com, EnergyAustralia-understand-your-bills

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