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What is a demand tariff?

A demand tariff is designed to reflect the costs of distributing your electricity during peak times. Your meter will take interval reads every 30 minutes between peak hours set by your distributor. During these peak hours customers are encouraged to lower their demand on the network when it is under the most stress; therefore, the lower your demand on the network during these hours, the lower your demand charges will be. These tariffs are defined by the network distributors.

What are the benefits of being on a demand tariff?

Demand tariffs are designed to optimise the best use of the network during peak demand times. Over the long term demand tariffs are designed to benefit customers.

What determines me being in a demand tariff?

If you are within the Ausnet Services & United Energy distribution areas and consume over 40MWh annually you will automatically be assigned to a demand tariff. For those within the Jemena, Citipower and Powercor distribution areas and consume over 60MWh annually you will also automatically be assigned to a demand tariff. If you are unsure who your distributor is please refer to the top right hand corner on the reverse of your latest bill.

Can I opt out of a demand tariff?

Over a 12 month period if you lower your total annual usage below 40kWh for AusNet Services & United Energy or 60MWh for Citipower, Powercor and Jemena you may choose to Opt-Out of the demand tariff and instead receive the relevant opt-out tariff. You will need to call Sumo after 12 months if you have used under this threshold.

How is a demand tariff calculated?

In a 30 minute interval during your networks set peak times, your meter will record the highest demand of kWh hours on the network. This is multiplied by the rates determined by your network then multiplied by the number of days in your billing cycle. This is not the amount you are using in this period but rather what you are demanding from the grid. A good analogy for electricity consumption compared to electricity demand is a river flowing under a bridge. Annual electricity consumption is equivalent to the total water volume flowing under a bridge during the year. Electricity demand is equivalent to the volume of water under the bridge at a single point in time. The peak demand is equivalent to when the largest volume of water is flowing under the bridge.  Therefore, the less energy you are using during these peak times, means your demand on the grid is lower and your demand charges will be less.