Understanding electricity supply charges in Australia

Electricity bills can be confusing. With a range of tariffs, discounts, time-of-use rates, and fees, understanding exactly what you're paying for can feel like a full-time job.

One charge that often raises eyebrows is the electricity supply charge: a daily cost you're charged regardless of how much electricity you actually use.

If you've ever looked at your bill and wondered why you're paying for electricity even on days when your home is empty, you're not alone.

Understanding supply charges can help you take better control of your electricity costs and even save money by comparing the right plans.

What is an electricity supply charge?

An electricity supply charge, sometimes called a daily supply charge, is a fixed fee that your energy retailer charges you just for being connected to the electricity grid. It's billed daily and applies whether or not you use any electricity that day.

This charge covers the cost of maintaining the infrastructure that delivers electricity to your property - think poles, wires, meters, and grid maintenance. It also contributes to the costs of administration and retail services provided by your electricity company.

In essence, it’s the cost of keeping your property connected and ready to use electricity, even if you haven’t switched on a single light.

Where can I find information on my supply charges?

You can find the electricity supply charge clearly listed on your energy bill. It's usually displayed in the section that outlines your rates and fees. Look for a line item labelled daily supply charge, fixed charge, or something similar.

It will show the rate (e.g., 98 cents per day) and the number of days you were billed. For example:

Daily Supply Charge: $0.98/day × 90 days = $88.20

This is separate from your usage charge, which is based on how many kilowatt-hours (kWh) of electricity you actually used.

If your bill seems unclear or confusing, you can always contact us, and we'll help you to break it down and understand the charges. To reach our Aussie-based team, call 1300 790 106.

How to find the cheapest electricity supply charge

Not all supply charges are created equal. Electricity retailers can set different supply charges depending on your location, distributor, and plan type. Here's how to find the most affordable option:

  • Use a reputable energy comparison service like Compare Energy to compare supply charges across different providers in your area.
  • Retailers are required to provide Basic Plan Information Documents or Energy Price Fact Sheets that outline all charges.
  • A low supply charge may come with higher usage rates, so compare total estimated costs rather than one charge in isolation.
  • Some plans offer discounts that apply to both supply and usage charges if you pay on time or via direct debit.

If you're unsure which plan offers the best value, speaking to an expert can save you time and money.

Who sets electricity supply charges?

Electricity supply charges are set by your energy retailer, but they’re influenced by the electricity distributor in your area. Distributors are responsible for the physical delivery of electricity to your home or business, and costs vary by region.

Retailers take these distribution costs into account and then set supply charges accordingly. In regulated markets, like parts of regional Queensland, supply charges may be set or approved by a government regulator, such as the Queensland Competition Authority.

In most of Australia’s major cities - Sydney, Melbourne, Brisbane, Adelaide, and Perth - retailers operate in a competitive market, meaning companies can set the rates, giving consumers the opportunity to shop around.

What are the electricity supply charges for?

Electricity supply charges help fund the fixed costs of maintaining the electricity network and keeping your home connected. These go towards:

  • Maintaining poles and wires
  • Network upgrades and repairs
  • Metering services and administration
  • Emergency and safety infrastructure
  • Retailer operating costs

Even if you're using solar panels or minimising your energy use, this charge still applies because you're still technically connected to the grid, ready to draw electricity when needed.

Talk to Compare Energy about finding the best deal

Electricity supply charges can have a big impact on your overall energy costs, especially if your usage is low. That’s why it’s so important to compare not just usage rates, but fixed daily charges as well.

If you're not sure whether you're on the best plan or simply want help cutting down your energy bills, get in touch with the Aussie-based team at Compare Energy. We offer friendly, obligation-free advice and can help you find electricity plans that better suit your needs.

Call Compare Energy today on 1300 790 106 to speak with a local expert and take control of your electricity costs.