How much you pay for electricity or gas depends on:
- how much energy you use
- the tariff you are charged (the rates on your bill)
- the type of contract you have.
Standing offer
All retailers must offer a standard contract that is no higher than the default market offer (DMO) price.
The DMO is set by the Australian Energy Regulator each year.
If you do not choose a market contract, you will be on a standing offer with the retailer that has the billing rights for the site.
If there is already an energy connection at the property, you may be supplied by:
- the retailer that already supplies the site, or
- your preferred retailer.
It is a good idea to contact the retailer and ask about the price. A standing offer may cost more than other deals.
The DMO is also used as a “reference price”. Retailers must show how their market offers compare to the DMO, so customers can compare offers.
Market offer
A market offer is a special deal. When you accept a market offer, you enter into a market contract.
Market contracts can be different for each retailer. They may include:
- contract length
- discounts
- fees.
The retailer sets the price and may change it.
All market contracts have a 10-day cooling-off period. During this time, you can cancel by phone or in writing without penalty.
Large market contracts for businesses
Some small businesses must go on a “large market” contract.
This happens if they use more than:
- 100,000 kWh of electricity per year, or
- 1 terajoule of gas per year.
Large market contracts do not have the same protections as other small customer contracts.
Read the terms and conditions carefully before you agree.
Energy charges on your bill
The tariff on your bill covers the retailer’s costs. This includes:
- buying electricity or gas (wholesale costs)
- moving it through the network (network charges are set separately by the Australian Energy Regulator)
- running the retail business (such as billing and call centres).
Most tariffs include two parts.
Usage charge
This is based on how much energy you use.
- Electricity is measured in kilowatt hours (kWh).
- Gas is measured in megajoules (MJ).
Supply charge
This is a daily charge. You pay it even if you use little or no energy.
It covers fixed costs like:
- meter services
- poles and wires or gas pipes
- call centres
- other network and retail costs.
Find out more in our What is my electricity tariff factsheet
Green energy options
Most electricity retailers offer green energy options.
Green energy tariffs often cost more because they support new renewable energy projects. Green energy may be worth supporting, but it may not suit your budget now.
Look for GreenPower accredited products. These products are checked through the GreenPower program.
To compare offers, visit energymadeeasy.gov.au.
Comparing energy offers
Retailers offer different deals. You could be paying more than you need to.
Start by contacting your retailer and asking what other offers they can give you.
You can also compare plans online.
Switching or comparison websites
Energy Made Easy is a free, independent comparison site run by the Australian Energy Regulator. It shows offers from all electricity and gas retailers.
Other comparison websites are run by businesses. Many do not charge you, but they may get a commission from some retailers. They may not show every plan.
If you use a broker or comparison site, read the terms and conditions first. Energy offers change often. A broker may not be able to promise the deal is the “cheapest” or “best” offer available.
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