A recent study by St Vincent de Paul found that consumers struggled to compare energy providers due to complicated and varying terminology.

Depending on what company you’re with, electricity bills can often feature confusing lingo and references to unforeseen costs.

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It’s hard enough budgeting for your electricity spend each month, you don’t need the extra hassle of trying to decipher exactly what it is you’re paying for.

Use this handy guide next time you sit down with your power bill to ensure you don’t get blindsided by surprise costs.

Kilo-what? Photo: Shutterstock

Watt

The standard unit of measurement for electricity. One watt is equivalent to one joule of energy per second. A kilowatt (kW) equals 1000 watts. A megawatt (MW) equals 1000 kilowatts.

kWh (kilowatt hours)

This figure describes your average daily electricity use – the amount of power your home uses each day. If you want to save money on your bill, this is the number to decrease.

National Metering Identifier (NMI)

Usually a 10-digit figure, the NMI is a unique identifier assigned to your specific power connection point. It must be featured on your bill.

Regulated contracts

Also known as standard contracts, these are the contracts based on retail prices, set by state and territory economic regulators in some states.

Market contracts

In contrast to regulated contracts, market contracts are negotiated between the retailer and the consumer.

Pay on time discount

This is a discount provided on market contracts when your bill is paid by the due date. Your provider should clearly specify the amount of the discount and the due date on the bill.

Loss factors

Refers to the calculation used to determine how much a consumer should pay for the electricity lost during transmission across distribution lines.

When energy travels from the generator to your residence, some is lost in the process and extra electricity must be generated to cover the loss.

Loss factors should be the same regardless of your provider and are based on geographical area.

Power lines. Photo: Getty Images

Service to property charge / network tariff / daily supply charge / non-energy charges / fixed charges

All of these terms refer to the cost of using the network, providing and maintaining meters, wires, poles and other operating costs.

These costs are usually calculated daily and shared equally by all customers.

Energy charges

The charges for the actual electricity you consume.

Tariff

The amount you pay for the electricity used. On your bill, tariffs are recorded in cents per kilowatt-hour (c/kWh).

Flat rate tariff / single rate tariff

The most common form of tariff. This simply means the same rate of electricity pricing will be applied all day.

Time of use tariffs

There are usually two main types of time of use tariffs: peak and off-peak. During off-peak periods, consumers will be charged lower rates due to lower demands. During high-demand periods, rates increase.

There may also be a third type of time of use tariff – known as the shoulder tariff – which refers to the period in between peak and off-peak periods and is only used in Victoria and New South Wales.

Understanding tariffs can keep your bill down. Photo: Shutterstock

Block tariffs / inclining block tariffs (IBTs)

Your electricity use can sometimes be split into different tariff blocks that are all charged at different rates. For example, usage from 0 to 1500 kilowatt hours could be charged at one rate and the next chunk of usage could be charged at another rate.

The idea is that progressive price caps will provide an incentive to keep power use down.

Renewable energy tariffs / GreenPower

If you have signed up to receive a portion of your energy supply from renewable sources like solar power, you will be charged extra.

Greenhouse gas emissions

How many harmful greenhouse gases your home has emitted in the course of usage. Your bill may also notify you as to how many greenhouse gas emissions you have saved with the help of a GreenPower product.

Dishonoured payment fee

You may be charged if your payment via direct debit is blocked by the bank or does not arrive on the due date.

Establishment fee

You may be charged a fee when you enter into a new contract. Similarly, you may also be charged an exit fee if you leave a contract.