How to read a business electricity bill

A business electricity bill carries three things a household bill usually does not: a demand or capacity line priced in kilowatts rather than kilowatt hours, network charges itemised separately instead of bundled into the usage rate, and rates stated without GST. Larger sites also pick up a metering or data charge and sometimes a power factor line.

Everything else on it works the way a home bill works, which means the unfamiliar lines are the ones worth your attention. This guide walks the bill in the order it appears and says what each line actually tells you. Grab your latest bill and read along.

What are the charges on a business electricity bill?

Six groups, and most bills print them in roughly this order.

Supply charge. A fixed amount in cents per day for having a connection, payable whether or not you trade that day. Multiply it by 365 to see what your connection costs you a year before you use any electricity at all. On a low usage site, a shop with no refrigeration, an office that closes at five, this is a surprisingly large share of the bill, and a plan with a lower supply charge matters more than a sharp usage rate.

Usage charges. Cents per kilowatt hour for the electricity itself. One line on a single rate plan, several on a time of use plan, each with its own kWh figure and its own rate.

Demand or capacity charges. Priced per kW or per kVA. This is the line that behaves unlike everything else on the bill, and it gets its own section below.

Network charges. On many business bills the distributor's charges are itemised rather than folded into the usage rate. You may see separate lines for network usage, network demand and a network fixed charge.

Metering and other service charges. A daily or monthly charge for the meter and its data. Interval metering costs more than a basic meter and is what makes demand billing possible in the first place.

Credits and adjustments. Solar exports, any retailer discount, and any balance carried forward from the last bill. A carried balance is not a charge for this period, and reading it as one is the most common way a business concludes its bill has jumped when it has not.

What is the difference between a usage charge and a demand charge on a business bill?

A usage charge bills the quantity of electricity you consumed, in kilowatt hours. A demand charge bills the rate at which you consumed it at your single worst moment, in kilowatts. Same bill, two different questions about the same electricity.

The consequence is the thing to hold on to: your demand charge can go up in a period when your usage went down. Trade fewer days but start every machine at once on the days you do trade, and the usage line falls while the demand line does not. Nothing has gone wrong with the bill.

Which means the two lines respond to different actions. Usage charges fall when you use less. Demand charges fall when you spread out what you use, even if the total never changes. Demand charges explained covers how the charge is calculated and how to reduce one.

Why does my business bill show kVA or kW as well as kWh?

Because kWh measures the electricity you consumed and kW or kVA measures the rate you drew it at, and a business tariff often charges for both. They are different quantities, so they get different lines rather than being reconciled into one.

The difference between kW and kVA is real power against total supplied power. Kilowatts are what your equipment turns into work. Kilovolt amperes are what the network had to deliver to make that happen, including the portion that circulates without doing useful work. On a site full of motors, compressors and older lighting the kVA figure runs meaningfully above the kW figure, and the ratio between them is your power factor.

If your bill charges demand on kVA, power factor correction reduces a charge you are genuinely paying. If it charges on kW, correction equipment mostly does not, whatever the person selling it says. Check the unit on the line before you spend anything.

What is the network charge on my business bill and can I change it?

The network charge is the part of your bill that pays the distributor for the poles, wires, substations and metering that physically deliver your electricity, and it is set by a tariff the network assigns to your site rather than by your retailer.

So the answer to the second half is: not by switching retailer. Every retailer selling to your site pays the same network charges for it and passes them through. What can change it is a change to the tariff your site is assigned, and that is a request your retailer makes to the network on your behalf, usually only where the network offers more than one tariff for a connection of your size.

That is worth knowing for two reasons. It stops you shopping for something no retailer can sell you. And it tells you where the conversation belongs when your network tariff genuinely does not suit your site any more, which happens most often after equipment has been replaced or a fit-out has changed how the place runs.

Where do I find my NMI on a business bill?

At the front. The National Metering Identifier is a 10 or 11 digit number identifying your connection point, and the AER's Better Bills Guideline requires the meter identifier to be presented at the front of the bill, so it is on the first page rather than buried in the usage detail.

Two things about it. It identifies the connection, not you and not your retailer, so it stays with the premises when you switch. And a site can have more than one, because a separately metered circuit or a second tenancy is a second connection point. If your business occupies more than one unit, check whether you are reading one bill or two.

Our upload flow reads the NMI off the bill because it is what identifies which network tariffs and which published plans apply to your site.

Why is my business bill higher in summer?

Three separate reasons, and they stack, which is why the jump can look worse than any one of them explains.

Cooling load is the obvious one. Refrigeration and air conditioning work harder against a higher ambient temperature, so the same equipment on the same settings consumes more.

Demand rates usually rise in summer. Networks are built for their hottest day, so most demand tariffs publish a higher summer rate, a longer summer window, or both. A bill that straddles the season change can show two demand lines with different rates.

And the billing period itself may be longer. Bills are not all the same length. Before concluding anything, check the day count against the previous bill: twelve extra days is a thirteen per cent bigger bill with nothing else having changed at all.

Which of the three is driving your increase is readable from the bill, because the usage figure, the demand figure and the day count are all printed on it.

Does my business bill include GST, and is the rate I see inclusive or exclusive?

Business electricity rates are usually quoted excluding GST, with GST applied once at the total, because a GST registered business claims it back. Household rates are usually quoted including GST. That is why a business rate and a household rate cannot be compared as printed numbers, and why a business rate and a household rate that look similar are not.

Check your own bill rather than assuming, because retailers are not consistent. Look for a stated GST line near the total and for wording on the rates table saying whether the rates shown include GST. If the bill prints a GST amount, that amount is the authority on your bill's basis.

Here is how we handle it, stated plainly, because business readers are the ones who will check. Every published plan rate we compare is anchored on the ex-GST figure the retailer lodges on the Consumer Data Right register, GST is applied once at the annual total rather than at each rate, and where your own bill prints a GST line we treat that line as authoritative for your bill instead of recomputing it. One basis on both sides of the comparison, applied once. A comparison that grosses up one side and not the other produces a saving figure that is wrong by about a tenth, which is a large enough error to be worth this paragraph.

You will also see business rates published elsewhere on a GST inclusive basis. That is a legitimate choice, not an error, but it means any figure you compare across two sources needs its basis established first or the difference in basis will read as a difference in price.

What should I check before I compare?

Five things, all printed on the bill, and all of which change the answer.

1. The day count and the dates. A comparison across bills of different lengths compares nothing.
2. Your tariff structure. Single rate, time of use, or demand. It determines which plans are even like for like.
3. Whether there is a kW or kVA line, and which unit it is priced in.
4. The GST basis, per the section above.
5. Whether any discount on the bill is conditional. A pay on time discount that lapsed has raised your effective rate without the headline rate moving.

A full year of bills beats one bill, because a year captures every season and a single summer bill will project a summer into your winter. One bill still works and is much better than a postcode and a guess.

Common questions

Can I compare business plans without a full year of bills?

Yes. One recent bill is enough to read your tariff structure, your rates, your supply charge and your usage, which is what the comparison needs. A full year is better, because it captures seasonal swing and any demand peak that only happens in summer, and the projection from a single bill has to assume the rest of the year resembles it. If you have twelve months to hand, upload them all and the engine uses the lot.

My bill shows two amounts. Which one is real?

The larger one, unless you always pay on time. Two amounts means a conditional discount: pay by the date and you get the lower figure, miss it and you owe the higher one. Treat the gap as a bet on your own admin rather than as money you have already saved. When we price plans we count a discount as certain only where it is guaranteed and unconditional, and price a conditional one on the basis that people are occasionally human.

Why does my bill show estimated instead of actual meter reads?

Because nobody read the meter, so the retailer projected from your history. It is legal and common, and it matters because an estimate that runs low is corrected later by a catch up bill that looks like a spike. If your bill jumped and the read was estimated, that is the first thing to check rather than the last. You can submit your own read or ask for an actual one, and two estimates in a row is worth querying properly.

Does switching retailer change my network charges or my meter?

No. Network charges are set by your distributor and passed through by whichever retailer you buy from, and your meter and NMI stay with the premises. What changes when you switch is the retail component: the usage rates, the supply charge, the discounts and the contract terms. That is also why the saving from switching is real but bounded, and why a site whose bill is mostly network and demand has less of it available than a site whose bill is mostly usage.

Then run the comparison

Reading the bill tells you what is happening. It cannot tell you what the same usage would have cost on the other plans published for your site, and that arithmetic is the part we built.

Upload your business bill and the engine reads the usage, tariff, rates and demand line, projects the published plans available at your address onto your own numbers, and ranks them by projected annual cost with the workings shown. Estimates, not quotes.

Still unpicking the rates table? Electricity tariffs explained covers every structure. If there is a kW or kVA line on your bill, demand charges explained is the one to read next. The household version of this walk is how to read your electricity bill, and the whole business comparison starts at business electricity plans.