When it comes to rates, it’s not just the number that matters. There are multiple rate structures and making sure you’re on the right one for your household can save you money.
Types of electricity rates
A rate structure, also known as an electricity tariff, is the way electricity pricing is spread throughout the day. There are three types of rate structures: single/anytime rate, time of use, and flexible.
If you’re on a single/anytime rate, you pay one single price for electricity throughout the day.
Those on time of use pay for electricity in peak and off-peak periods, with electricity generally more expensive during the day and cheaper at night.
A flexible tariff is similar to a time of use, however it involves peak, shoulder and off-peak rates, with shoulder rates falling somewhere between the peak and off-peak prices.
Being on the right rate structure for you could save you money
Understanding these rate structures is important because being on the right tariff for your household could save you money. The way you use electricity in your home is unique to you, and so too is the rate structure that will suit you best.
When you join a new power company, you’ll automatically be put on the same rate structure you were on with your previous power company. The only way to switch to another rate structure is by making the active choice and requesting it from your power company. Your power company will then request the change from your network and a month or so later you would switch across.
If you’ve never made a request to switch tariffs, you’re probably on a single/anytime rate, as this is the default rate structure.
Please note that it’s only possible to change your rate structure once a year, and in some cases the electricity networks may charge a fee to do so.