Jargon Buster

A 'consumption charge' or 'usage charge' on an energy bill is the cost of how much electricity you’ve used during a billing period. This is typically measured in kilowatt-hours (kWh) and represents the primary component of most electricity bills. 

A ‘supply charge’ is a fixed daily fee that you pay regardless of how much electricity you use. This charge covers the cost of having your property connected to the electricity grid and maintaining that connection.

A ‘solar feed-in tariff’ is the amount you receive for excess electricity your solar panels export to the grid. It appears as a negative amount on your bill, reducing your overall costs.

Current standard feed-in tariffs typically range from 5-20 cents per kWh, which is lower than what you pay for electricity purchased from your retailer. Your bill will show the electricity exported (kWh), the tariff rate, and the total credit amount.

The Default Market Offer (DMO) is a price cap that sets the maximum price energy retailers can charge residential and small business customers.

Retailers must say how much an energy plan costs compared to the DMO. The DMO is reviewed annually.

The DMO only applies in New South Wales, South Australia, and south-east Queensland. Victoria has its own price cap called the Victorian Default Offer (VDO).

A National Metering Identifier (NMI) is a unique 10 or 11-digit number for the electricity connection at your address - it will change for each place you live in. It is used to understand how much electricity you use.

A ‘hardship program’ is provided by energy retailers to customers experiencing financial difficulty to help them pay their bills and provide other support.  

Hardship programs:

• Help customers manage their energy bills through payment plans
• Protect eligible customers from energy disconnection (while they're in the program)
• Provide assistance in accessing government rebates and concessions
• May include energy efficiency advice to reduce consumption, and
• Offer more flexible payment options.

All energy retailers in Australia must have a hardship policy approved by the Australian Energy Regulator (AER). 

Demand charges are determined by how the highest amount of electricity you use during a given timeframe. This is often calculated based on your highest one hour of consumption in a month. They are designed to encourage less usage during peak times, and can be added on top of flat or time of use tariffs. 

Time-of-use rates charge you different prices depending on the time of day that you use the electricity. This reflects that the cost to supply you with energy varies throughout the day. 

Key aspects include:

• Different rates for peak (highest cost), shoulder (medium cost), and off-peak (lowest cost) periods
• Peak periods typically occur on weekday afternoons/evenings (e.g., 3pm-9pm)
• Off-peak periods usually include overnight hours and sometimes weekends
• Requires a smart meter that can record when electricity is used
• Designed to encourage shifting electricity usage to times when grid demand is lower

Listed on your bill in c/kWh, this tariff means you pay the same amount for what you use, whatever time of day you use it. This is not necessarily cheaper, but it does make it easier for you to know how much money you will likely pay every month.

• A kW (kilowatt) measures power, i.e. the rate at which electricity is being used. Think of it as how much electricity an appliance is using right now.

• A kWh (kilowatt-hour) measures energy, which is the total amount of electricity used over time. If a 1 kW appliance runs for 1 hour, it uses 1 kWh of energy.

• A kJ (kilojoule) measures energy, often used for gas. It's a smaller unit of energy than a kWh.

• A MJ (megajoule) also measures energy, and is also often used for gas. 1 MJ is equal to 1000 kJ.

• A MW (megawatt) measures large amounts of power, equal to 1,000 kilowatts. It’s used for the output of power stations.

• A mWh (megawatt-hour) measures large amounts of energy, equal to 1,000 kilowatt-hours. It’s used to measure the energy output of power stations over time.

An ‘energy generator’ refers to anybody that produces electricity. This means anyone who converts a primary energy source (like coal, sunlight, or wind) into electricity that can be fed into the grid.

An ‘energy network’ is the infrastructure that transports electricity or gas from those who make the energy (generators) to those who use it. Think of it as the roads and highways of energy. It includes the wires, poles, substations, and pipelines that carry electricity and gas.

Networks can be divided into:

• Transmission networks: High-voltage lines that carry electricity over long distances.
• Distribution networks: Lower-voltage lines that deliver electricity to homes and businesses.
• Gas networks deliver gas through pipelines.

An ‘energy distributor’ owns and operates the local network of poles, wires, or pipes that deliver electricity or gas to homes or businesses around Australia. They’re responsible for maintaining the network, fixing faults, and ensuring its reliability. They operate within specific geographic locations - you can’t choose your distributor, it’s based on where you live.

An ‘energy retailer’ or energy provider is who you directly deal with for your electricity or gas supply. They purchase electricity and/or gas in large volumes and sell it to you. In most of Australia, you can choose your energy retailer and your energy plan.

The ‘energy market’ is where electricity and gas are bought and sold. It's how energy gets from producers to consumers. Energy generators sell the electricity they produce, and retailers buy it to sell to homes and businesses. It includes the wholesale market, where generators and retailers trade, and the retail market, where retailers sell to consumers. 

Supply and demand, along with many other factors, determine the price of energy in the market. It’s regulated to ensure fair competition and reliable supply.

The ‘National Electricity Market (NEM)’ is the largest part of the Australian energy market. It’s the wholesale electricity market that operates across: Queensland, New South Wales, Victoria, South Australia, and Tasmania. 

The NEM involves a very large, interconnected electricity grid that covers thousands of kilometres. It operates on a supply and demand basis, with prices fluctuating based on electricity usage.

The definition of a ‘small business’ in the energy sector can vary slightly depending on the state or territory, energy retailer and regulations. Mostly, it's a business that uses energy at a level similar to a larger household, rather than a heavy industrial operation.

It generally refers to businesses that:

• Consume relatively low amounts of energy: Typically, it's based on annual consumption thresholds for electricity (measured in kWh) or gas (measured in MJ).
• Are not large industrial users: It excludes large-scale manufacturing, mining, and other heavy industries that consume vast amounts of energy.
• Meet retailer specific criteria: Individual energy retailers may have their own specific criteria to define a small business, like annual revenue or staff numbers, so it's best to check with them directly.

It's important to understand if you qualify as a 'small business' as this impacts what type of support you can access. Unfortunately, many Australian small businesses aren't covered by an ombudsman scheme because each Australian state and territory has its own definition of what a small business energy consumer is. 

For example, in NSW, the ombudsman will take the following into account when deciding whether or not they can support a business: 

• Annual turnover and number of employees
• Electricity and/or gas usage per year (more or less than 100 MWh electricity or 1000Gj gas), and
• Whether or not the business could solve their issues without the assistance of an ombudsman.

A ‘rebate’ is a reduction in the amount you pay on your energy bill. It's a form of financial support that lowers your energy cost. To receive a rebate, you usually need to meet eligibility requirements.

Rebates can be offered by the government (e.g., for low-income households or seniors) or by energy retailers (e.g., as part of a promotional offer). The rebate is applied as a credit to your energy bill, reducing the total amount you owe.

For more information on what energy rebates are available, visit https://www.energy.gov.au/rebates. 

‘Gas and electricity meters’ measure how much energy your home or business uses. They record the amount of electricity (in kilowatt-hours, kWh) or gas (in megajoules, MJ) consumed.

Energy retailers use the readings from these meters to calculate your energy bills. There are traditional meters that require manual reading, and smart metersthat transmit data electronically. 

Meters provide accurate energy consumption records, allowing for fair billing and helping consumers monitor their usage.

A ‘smart meter’ is an advanced digital meter that measures your electricity use and sends that information electronically to your energy provider. They can provide near real-time information on energy usage, allowing consumers to monitor and manage their consumption more effectively. They eliminate the need for manual meter readings and enable time-of-use tariffs.

Find out more about the benefits of smart meters. 

A ‘prepayment meter’ is an energy meter that requires you to pay upfront for your electricity or gas before you use it. They work in a ‘pay-as-you-go’ model: credit is added to the meter and the energy is used until the credit runs out.  If your credit runs out, you will be disconnected and stop receiving energy until you can top up your credit.

‘Consumer Energy Resources (CER)’ refers to small-scale energy technologies that can generate, store, or manage electricity, owned by consumers. 

Some examples of CER are:

• Rooftop solar panels
• Home battery storage systems
• Electric vehicles (EVs), with battery charging stations that can feed energy back into the grid, and
• Smart home energy management systems.

An ‘Electric Vehicle (EV)’ is a vehicle that's powered by electricity rather than fossil fuels, like petrol or diesel. EVs use rechargeable batteries to store the electricity that drives their motors and typically are either fully battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs). They are a much cleaner alternative to traditional vehicles.

‘Solar panels’ – also known as ‘photovoltaic (PV) panels’ – convert sunlight into electricity that you can use to power your home or business.

The electricity generated can be used directly, stored in batteries, or fed back into the grid.

‘Battery storage’ refers to systems that store electricity for later use. This means even if the sun isn’t shining, you can store the energy generated by the sun and the solar panels on your roof to use at a later time.  

It can range from small home battery systems to large-scale grid batteries that support the overall electricity network. It improves grid stability, reduces reliance on fossil fuels, and allows consumers to use stored energy during peak demand or outages.

A ‘heat pump’ is an energy-efficient system to heat or cool your home and water. By providing both heating in winter and cooling in summer, they’re very versatile, using electricity to move heat, which is much more efficient than using electricity to generate heat directly.

There are a few key types, which are:

• Air-source heat pumps take heat from the air
• Ground-source heat pumps take heat from the ground, and
• Water-source heat pumps take heat from water.

An ‘energy rating’ labels appliances and buildings with information about their energy efficiency. It shows how much energy a product or building uses. They help consumers make informed choices when buying appliances or buildings, allowing them to choose more energy-efficient options.

There are different types of energy ratings, such as:

• Ones that apply to large appliances such as refrigerators, washing machines, and air conditioners
• NABERS ratings for buildings, and
• WELS ratings for appliances that use water.

Appliances often use a star rating system, where more stars indicate greater energy efficiency. Choosing products with higher energy ratings can lead to significant savings on energy bills.

‘Energy efficiency’ means using less energy to achieve the same result. It's about reducing how much energy is needed to power homes, businesses, and industries by minimising energy waste.

Some examples of energy efficiency practices include:

• Using energy-efficient appliances (with high energy ratings)
• Insulating homes to reduce heating and cooling needs
• Switching to LED lighting, and
• Designing buildings to maximise natural light and ventilation.

The ‘Australian Energy Regulator (AER)’ is the national regulator of Australia’s wholesale electricity and gas markets. They oversee the running of the National Electricity Market (NEM) and gas markets and make sure the rules are followed.

The ‘Australian Energy Market Commission (AEMC)’ makes the rules for Australia's electricity and gas markets. They are responsible for creating and changing the rules that govern how the electricity and gas markets operate.

The ‘Australian Energy Market Operator (AEMO)’ is responsible for operating Australia's largest electricity and gas markets. They’re responsible for managing the day-to-day operation of the National Electricity Market (NEM) and several gas markets.