In order to get a better deal on electricity, there are a few things you need to understand, including ‘tariffs’. In this article, Canstar Blue walks you through everything you need to know about energy tariffs in Queensland, how they can help reduce your overall costs, and how to spot a cheap tariff from a not so cheap option.
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What is an electricity tariff?
A tariff is the term used to describe how customers are charged for their energy usage. You might pay the same rate for electricity at all times, or you might be charged differently for using it at quiet times. You could even be charged differently for using different appliances in your home. These are all examples of tariffs.
What electricity tariffs are there in Queensland?
Throughout Queensland, there are four different residential electricity tariffs – Tariffs 11, 12, 31 and 33. There are also four tariffs for business customers – Tariffs 20, 22, 41 and 91.
While we don’t know the story behind why the tariffs were named with seemingly arbitrary numbers, Canstar Blue can explain what each tariff does and how it can work for you. Electricity providers in South East Queensland may use different names for their tariffs, but they will all fall into one of the categories below.
Before we explain the tariffs, it’s first important to understand the different types of charges on your bill. Energy bills will be made up of two main costs – supply charges and usage charges:
- Supply charges are what you will need to pay every day, just to remain connected to the electricity grid. This is a fixed daily rate of usually around $1 in Queensland.
- Usage charges are what you actually pay for the power you use. As we will explain, usage charges can vary significantly depending on the type of tariff. Some customers will have a single rate tariff, meaning they will always be charged the same usage rates, while others be will charged differently depending on the time they use power, or which appliances they use. In this case, customers will be on two-rate, or multi-rate tariffs.
The following tariffs are applicable to households across Queensland, whether you live in Brisbane, the Sunshine Coast, Gold Coast, or way up north. For those living in South East Queensland, tariff rates are set by the energy providers. If you live somewhere else in the state, your rates remain regulated by the Queensland Competition Authority.
Queensland electricity tariffs explained
Tariff 11 – Domestic Single Rate
This is the standard residential tariff and is available to virtually all Queensland households. With Tariff 11, customers are charged the same usage rates for electricity regardless of the time of day they use it. This rate will usually cost between 24 cents and 28 cents per kWh, depending on your provider. If an energy price factsheet describes a tariff as ‘Domestic’, ‘Peak’ or ‘Standard’, it’s most likely referring to Tariff 11. This tariff won’t necessarily give customers the best value, but it’s a safe pick for anyone unsure. For the cheapest prices, look for Tariff 11 usage rates of 24c per kWh or less.
Tariff 12 – Domestic Time of Use
Customers on this tariff are charged a different usage rate depending on when they use electricity. This is broken into three time periods that loosely reflect the electricity demand at that time – Peak, Off-peak and Shoulder.
- Peak (Weekdays 4pm – 8pm): This is when electricity is in peak demand and therefore most expensive. Peak rates in Queensland generally cost around 33 to 35 cents per kWh.
- Off-peak (10pm – 7am): This is when demand for power is lower and electricity usage rates are cheapest. Off-peak rates usually cost between 17 to 20 cents per kWh.
- Shoulder (All other times): In between Peak and Off-peak times, a ‘shoulder rate’ is charged. This rate is cheaper than Peak but more expensive than Off-peak, usually costing 24 to 26 cents per kWh.
Tariff 12 is often referred to in energy price factsheets as ‘Time of Use’, ‘Domestic TOU’ or some variation. This tariff is most ideal for electricity customers who tend to use a lot of electricity through the day or late at night rather than in the early evening. If you’re a night owl, shift worker or you work from home, a time of use tariff could save you money.
Bear in mind that to sign up to Tariff 12, customers must have a meter capable of taking multiple readings. Most new meters, including smart meters, are compatible with time of use tariffs. If you live in an old house with an outdated meter, however, you will need to upgrade before you can get Tariff 12.
Tariff 31 – Night Rate Super Economy
This is where tariffs in Queensland get a little confusing. Tariff 31 is often seen on bills as ‘Controlled load 1’, ‘Controlled supply’, ’Night rate’, ‘Dedicated circuit 1’ or ‘Super Economy’.
Tariff 31 is a storage hot water system tariff. Electricity will usually be supplied for only part of the day – eight hours. The time electricity is supplied is set by your distributor (Energex or Ergon) and will usually be during periods of low electricity demand. Your hot water system will heat up the water during this time and store it for use later on, taking advantage of the low late night electricity prices.
With this set up, your hot water system is metered separately to the rest of the house and customers will be charged the Tariff 31 rate of around 15 to 17 cents per kWh for water heating. All other electricity usage will be charged at Tariff 11 or 12 rates, as one of these two will remain your primary usage rate.
Tariff 31 will be most ideal for customers with large electric hot water systems. If your hot water system is too small, you may run out of hot water. Tariff 31 can also be used for heat banks and as a solar hot water booster.
Tariff 33 – Supply Economy
This is another tariff dedicated to hot water systems. Under Tariff 33, electricity is available for 18 hours each day, or pretty much all times except peak demand periods in the morning and early evening.
Tariff 33 is more versatile than Tariff 31 as energy is supplied for longer hours. Tariff 33 is suitable for smaller electric hot water systems, pool pumps, washing machines, dishwashers, or just any appliance you don’t need running in peak periods.
Tariff 33 rates are around 20 to 22 cents per kWh. That’s cheaper than Tariff 11 or 12, but a little more expensive than Tariff 31. Once again, Tariff 33 rates will only apply to the electricity used by your nominated appliance, while the rest of the home’s usage will be charged at Tariff 11 or 12 rates.
Queensland business electricity tariffs
The electricity needs of a business will be quite different to that of a residential customer, so it makes sense that businesses have their own set of tariffs. In Queensland, there are four tariffs for business – Tariffs 20, 22, 41 and 91.
- Tariff 20: Tariff 20 is the business version of Tariff 11. A standard flat rate of around 26 to 30 cents per kWh is charged, depending on the provider, for all electricity usage regardless of the time.
- Tariff 22: This is the time of use tariff for businesses. A higher rate of around 29 to 33 cents per kWh is charged for electricity usage from 7am to 9pm on weekdays. A lower rate of about 25 to 27 cents is charged at all other times. This tariff may work out as the cheapest option for businesses that mostly operate on weekends or late at night.
- Tariff 41: Designed for large businesses, this tariff charges a very small base rate. When the site demands a lot of electricity, however, the rate increases dramatically.
- Tariff 91: This is the tariff for supply to unmetered sites, such as some construction sites.
Understanding energy tariffs is the first step to cutting your electricity costs. If you are on a single rate, simply look for the cheapest Tariff 11 or 12 charges. If you also have a time of use tariff, make sure you take these costs into consideration, too.