An energy bill is made up of the various costs of delivering energy to your home or business. In the graph below, you can see wholesale and network costs make up the majority of your bill. These percentages are based on data provided by the Victorian Essential Services Commission. These are an example only and won't reflect individual circumstances which can be impacted by things like where you live and how much power you use.
The breakdown of a typical residential electricity bill. Source: 1
This is what retailers pay for the energy they sell and factors in what it costs to generate. As a proportion of an average bill, wholesale prices have grown from 31% to 36% in the past year.
Electricity has to get from where it’s produced to your place. And this network cost covers the 'poles and wires' to do this.
These are charges that cover costs retailers incur to comply with government programs that promote renewable energy and energy efficiency.
Basically, the cost of all the things needed to run a business; call centres, customer care, marketing, billing, wages for employees who keep everything running smoothly.
This is the profit retailers make. Any profit Momentum makes is either reinvested back into our business or goes to our parent company, Hydro Tasmania, Australia’s largest generator of renewable energy.
Yep, this is pretty self-explanatory. The Goods and Services Tax is added to most of what you buy in Australia. Certain basics are excluded. And while you might expect this to be 10%, when you add 10% to the invoice this actually makes it 9% of the overall bill.
There’s no denying it, prices have risen sharply. According to the Victorian Essential Services Commission (ESC), wholesale electricity prices are 87% higher than last year.2
Similarly, looking nationally at figures from the Australian Energy Regulator, it’s clear the main driver behind increased power prices has been wholesale costs.
Source: 5
Your gas bill is made up of the various costs of delivering gas to your home or business. These costs include:
This is the cost to the retailer of purchasing gas from suppliers. It is influenced by market factors such as supply and demand, as well as production costs like exploration, extraction, processing and storage.
Gas has to get from where it’s produced or stored to your place. This happens via big transmission pipelines, to bring it to your local area. From there it travels through distribution networks that transport it right to your home or business.
Basically, the cost of all the things needed to run our business; such as call centres, customer care, marketing, billing, and wages for employees who keep everything running smoothly.
Yep, this is pretty self-explanatory. The Goods and Services Tax is added to most of what you buy in Australia.
Natural gas prices rise and fall in line with global supply and demand. There are a number of factors, both local and international, that have pushed up prices in Australia.
Source: 9
Price increases and decreases in the energy industry aren’t always comparable. For example, a customer of Retailer A who receives a price increase of 20 per cent is not necessarily on a worse offer than a customer of Retailer B who receives a price increase of only ten per cent. The actual prices are what’s important.
In December 2022, the Federal Government introduced emergency price caps on both coal and gas with the aim of protecting consumers from the worst of high gas prices. The Federal Government and the Australian Energy Regulator say that price increases could have been much higher if not for this intervention.6
To complicate matters, energy is often secured in advance with long-term contracts. So, for example, high prices set when a contract is secured could affect energy prices 12 months later, and a cap the government sets might not be felt until down the track.
All Victorian households are eligible for a $250 payment. Find out more by visiting the Victorian Energy Compare site.
Cutting down on consumption can make a big difference to your final bill. Momentum has a number of guides on how to save money, including:
If you’re experiencing financial difficulty, there's help available.
We’re here to help. If you just need a little more time to pay, you can request a payment extension through MyAccount by clicking “Payment options”, then “Request an Extension”.
If you think you need help beyond a payment extension, more support is available including setting-up payment plans. You can find out more on our Payment Assistance page, or call us to speak to a dedicated team member.
We can also offer advice on government and non-government assistance that might be available, such as the Utility Relief Grants Scheme in Victoria, which is designed to help in times of temporary financial crisis.
There are many organisations out there that may be able to help, including the Australian Securities and Investment Commission (ASIC). ASIC’s MoneySmart website has some useful information that could be of assistance. You can also call their National Debt Helpline on 1800 007 007.
All states provide a range of energy concessions and rebates. Click here to see what’s available.
The 2023 Federal Budget introduced a relief package worth $3 billion aimed at easing the rising cost of living. Residential customers, small businesses, concession and seniors health card holders, and customers receiving Family Tax Benefit A and B, are eligible for some relief. The details are still being finalised, but eligible customers will see it applied to their bill. To find out more, go to the government energy rebate site.
If you’d like to reduce the bill shock that come with seasonal jumps in energy use, you might like to try our SmoothPay option.
It averages your energy use over 12 months, giving you even, predictable bills month to month, so there are no nasty surprises.
You can set up SmoothPay in MyAccount.
They’re the biggest contributor of renewable energy in the country, and they’re looking at ways to double their generating capacity (which means more renewable energy for Australia). By supporting us, you’re helping them grow too. Learn more about Hydro Tasmania.
More on renewables
1. Graph data taken from the Victorian Default Offer 2023-24: Final Decision paper, published by the Essential Services Commission
2. Page 12 of VDO final determination https://www.esc.vic.gov.au/sites/default/files/documents/FDP%20-%20Victorian%20Default%20Offer%202023-24%20Final%20Decision%20-%2020230525_0.pdf
3. https://www.energy.gov.au/data/australian-electricity-generation-fuel-mix#:~:text=Fossil%20fuels%20contributed%2071%25%20of,%25)%20and%20oil%20(2%25)
4. https://reneweconomy.com.au/coal-plant-reliability-hits-a-new-low-as-unplanned-unit-outages-hit-a-new-high
5. Graph data taken from Quarterly volume weighted average spot prices – regions, published by the Australian Energy Regulator
6. https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869#:~:text=The%20price%20set%20in%20hedge,rises%20in%20wholesale%20electricity%20prices
7. https://www.exxonmobil.com.au/news/newsroom/speeches/the-evolving-role-of-gippsland-gas-in-australias-east-coast-gas-market
8. https://aemo.com.au/en/newsroom/media-release/quarterly-energy-dynamics-report-for-q2-2022
9. https://www.aer.gov.au/wholesale-markets/wholesale-statistics/gas-market-prices. Note: At the time of publishing, only data to 1 April 2023 was available. This means that only 9 months of the 22/23 financial year are represented.