Tiered Pricing Plans vs Volume Pricing

Posted on May 23, 2021, 8:20 p.m.

Finding yourself struggling to wrap your head around all the different options for power?

There are some pretty confusing things that go on in the market that trip a lot of people up. We're here to shine the light to help make things a little bit clearer, and hopefully a bit more transparent, to enable customers to make better choices when it comes to choosing the right plan for what they need.

One of the anomalies that can catch a lot of people out are tiered pricing plans on your invoice.

Electricity charges - installation control point (ICP) 0000000000ABCD1 from 1 Jan 21 to 31 Jan 21 (31 days)

Daily charge 31 days @ 33.300 cents per day $10.32
Anytime with Control 157 kWh @ 29.800 cents per kWh $46.79
Anytime with Control 6 kWh @ 30.900 cents per kWh $1.85
  163 kWh    
Electricity Authority Levy 163 kWh @ 0.130 cent per kWh $0.21
    Total Electricity Charges $59.17

This is when there is a different variable rate applied to your bill depending on the volume of electricity you consume. This is very similar to how you pay PAYE tax on your income.

When you use very low volumes, your variable rate for power consumption is low, and you aren't charged much for each unit of power. But, when your consumption goes over a certain threshold, this amount is charged at a much higher variable rate.

The contract with your retailer (and the supporting information) should spell out all the charges you're expected to pay. We always advise our customers to read the fine line on their contracts to fully understand what they should expect. This is because, many times, there are terms and conditions and other benefits, often qualitative (i.e., besides just the money), that affect how power plans compare between retailers (e.g., payment terms, pricing structures, hidden costs, etc.).

It's important to be careful when comparing bills as well. Not all retailers may explain the details of all their charges in their terms and conditions, or in their contract with the customer. Some of this info might sit on another part of their site, dedicated to explaining their pricing plans. This all depends on how their marketing and legal teams choose to showcase their offerings to prospective customers.

At 3T POWER, we simplify your bills and our contracts with you so you can understand what you're paying for, and why. We don't make things complicated, as we understand that, for most customers, they really just want to get on with what they need to do. We make the effort to simplify the process for you so you can make the right decision for what you or your business needs.

We believe in making sure what we're offering and providing is fully transparent to all our customers. It's not good for us, or you, if you get a big surprise over the amount you're invoiced at the end of the month.

It's important to compare apples to apples when you're looking at different electricity pricing plans. And we're always more than happy to work through with you on any questions you might have.