Energy Billing Options Explained

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Nothing matches the dread of opening an energy bill – especially when you’re expecting a big one – but choosing the right billing options for your preferences and budget can at least help take the edge off. You may not realise the billing options that are available to you, meaning that managing those bills may be a bit easier than you think. That’s why Canstar Blue has produced this guide to energy billing options, to help you avoid that classic ‘bill shock’. Keep reading to see what your options are.

How does energy billing work?

Understanding how energy billing works is the first step to better-managing your bills and removing some of the stress that comes when they arrive in the mail (or email). The way you receive electricity bills depends on the type of meter you have:

• If you have an old accumulation or interval meter, you’ll need a meter reader from your local energy distributor to visit your property (usually just once every three months) and provide a reading to your energy retailer for billing purposes.
• If you have a smart meter, there’s no need for anyone to visit your property, with your meter read remotely by your energy distributor before passing the details onto your retailer for billing.

Depending on how and when your meter is read, you may be eligible for either monthly or quarterly energy billing.

Monthly vs Quarterly Billing: Which is better?

Would you rather pay four or 12 energy bills a year? That’s a choice that most energy retailers will make available, and it’s important to think carefully about what works best for you. Sure, the idea of receiving just four bills a year sounds preferable in theory, but this means those four bills will be much bigger than 12 smaller ones spread over time.

If you prefer the idea of monthly energy bills, there is an important catch to be aware of if your home does not have a smart meter. Given that a meter reader will only be sent to your property every three months, you’ll probably need to receive estimated bills in between the accurate bills actually based on meter readings. These quarterly bills will then be adjusted to settle your true balance accordingly. If you have a smart meter at your property, you should be able to request accurate bills every month.

But, which billing frequency is most popular among Aussie households? A Canstar Blue survey of more than 6,000 respondents in late 2022 found:

• 69% receive quarterly energy bills
• 25% get their energy bills monthly
• 5% said it was a bi-monthly billing frequency
• 1% were not sure how often they are billed
• 1% claimed to be billed in another fashion to those listed above

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Are there other payment frequency options?

Realistically, you’ll only have the option of either monthly or quarterly energy billing. However, it’s not unheard of for energy retailers to allow for ANNUAL billing. This means the customer would pay for the whole year’s worth of energy upfront, which would be an estimated amount based on previous energy usage history.

At the other end of the spectrum, customers on an energy payment plan as part of an energy hardship policy may be asked to make payments every week or two to clear their outstanding balance sooner. Even if you’re not involved in a hardship policy, you could still ask your retailer for a bill smoothing option so you can pay the same amount for power every week or two, making budgeting that little bit easier.

Should I sign up for direct debit payments?

In most cases, your electricity retailer will be keen to get you to sign up for direct debit payments, meaning the bill amount will automatically be withdrawn from your nominated bank account. And while some energy customers may also prefer the convenience of automatically paying by direct debit, there are things to be aware of. The main thing is, that if you don’t have the money ready to roll in your bank account on the bill’s due date, your bank may not accept the withdrawal attempt from your energy retailer, meaning you’ll be charged a late payment fee. You may also incur a fee from your bank as a result.

If you don’t like the idea of direct debiting, There are some other manual payment options usually available as well:

• If you have an online account, you could make a payment through your retailer’s website
• You could also pay through your energy retailer’s app (but watch out for small card fees)
• Most retailers allow for payments to be made via online money transfer sites like BPAY or PayPal
• Under industry regulations, some retailers must also accept payments by mail (for cheques and money orders) as well as over the counter at Australia Post branches
• Plus, you could always just pick up the phone and make a card payment

It’s important to understand however, that this could mean you end up paying more for energy than you need to. Why is this? Well:

• Energy retailers typically make their best offers available to customers who make their life a little easier. Setting up direct debit payments is one way of doing this.
• As a result, some energy retailers may provide direct debit discounts to encourage customers to set up automatic payments. These discounts are usually fairly modest, but still worth having.

Electricity plans with direct debit discounts

What’s the best way to pay my energy bill?

Whether you pay monthly, quarterly, by direct debit, or a manual form of payment, the most important thing is that you pay your bills on time! Failing to do so could mean you’re charged extra for a late payment – and no one wants that!

Monthly bills are certainly convenient in that you’ll be paying less, more often. Compare this to those big quarterly energy bills that always have a habit of blowing out your budget. The decision here is simply one of preference, but consider whether you’re likely to have the $400-500 readily available to pay one of those hefty quarterly bills when they come around, or whether you’re better off budgeting for those smaller bills of about $130-150 a month.

When it comes to how you go about paying, direct debit seems like a no brainer, especially when it could mean you pay a little less as a result. But people have their reasons for not wanting to pay this way – and that’s OK, as long as you understand your options, and pay on time.

However often you pay your energy bills, just make sure you’re getting a good deal. It’s easy to fall into the trap of receiving a bill in the mail and begrudgingly paying it without question. Remember that there can be a big difference between the cheapest and most expensive energy deals out there, so you’ll have to be proactive to search out a better value.

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