If you manage energy for a business – especially one with multiple sites – you may have come across mysterious labels or codes on your electricity bill known as tariff codes. 

These codes correspond to specific network tariffs or pricing plans set by electricity distributors (and sometimes referenced by retailers) that determine how you’re charged for using energy from the grid. 

In this post, we’ll demystify what tariff codes are in the Australian context, explain how getting them right can save your business money, and why regular tariff reviews is best practice.

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What is a Tariff Code?

In simple terms, a tariff code is a short identifier for a specific electricity pricing structure. Every network tariff – which is the schedule of charges for using the poles and wires in a given area – has its own code or name. For example, a distributor might have one tariff code for a “small business flat rate” and another code for a “time-of-use” tariff. These codes are used behind the scenes (and often printed on bills or energy data) to denote which cost structure applies to your site.

Tariff codes are all about network charges. Network charges cover the cost of transporting electricity from generators, through high-voltage transmission lines, and finally through the distribution network to your business. These charges are regulated and set by the network distributors (and approved by regulators) to recover the costs of building and maintaining the grid​. Your energy retailer passes these network charges on to you as part of your electricity bill (sometimes itemized, sometimes built into the usage rates). In fact, network charges typically make up around 30% or more of a business’s power bill – a substantial chunk of your costs.

Every site is assigned a network tariff (and thus a tariff code) based on various factors like the site’s location (which determines the local distributor), the type of customer (residential, small business, large business), the connection voltage, and the site’s energy usage or demand profile​. Because there are many possible combinations of these factors, distributors have a wide array of tariff codes. It’s no wonder this can get confusing, and why businesses often find themselves on a tariff that isn’t actually the best fit.

How the Right Tariff Code Can Save You Money

Why do tariff codes matter so much? Because being on the wrong tariff structure can mean you’re paying more than necessary for the way your business actually uses electricity. By contrast, getting onto the right tariff code for your usage profile can unlock significant savings.

Modern network tariffs are designed to reflect usage patterns. There are typically a few types:

• Flat tariffs – same rate for every kWh, all day.
  
  
• Time-of-Use tariffs – higher rates at peak times (e.g. late afternoon/evening) and lower rates off-peak; sometimes a “shoulder” in between.
  
  
• Demand tariffs – charges based on your highest half-hour or daily demand (kW or kVA) in the month, in addition to energy usage charges.
  
  
• Controlled load or dedicated circuit tariffs – special low rates for specific equipment run in off-peak times (common for hot water, etc., usually more for residential, but some businesses use controlled loads too).
  
  

The right tariff for a site depends on when and how the site uses energy. For example, a small retail store open mostly daytime might do best on a flat tariff or a simple TOU, whereas a manufacturing plant with heavy machinery might save with a demand tariff if it can stagger its equipment usage to avoid high peaks. A restaurant that does big dinner trade (evening peak) might actually be better on a demand tariff (pay for the spike but get lower off-peak energy rates for the rest), or it might stick to time-of-use but try to reduce usage during the peak window.

In summary, optimising tariff codes is a low-hanging fruit in energy cost management, especially for multi-site businesses. It’s about aligning your pricing structure with your actual usage. There’s no one “cheapest” tariff for everyone – it’s about the best fit. 

The Importance of Regular Tariff Reviews (Especially for Multi-Site Businesses)

Energy usage is not static. Your operating hours, equipment, and processes can change over time – and so can the network tariffs themselves. What was the optimal tariff code three or five years ago might not be ideal today. That’s why regular tariff reviews are crucial. Think of it as an annual or biennial check-up on your energy plan: ensuring each site is on the best available deal for its current situation.

For businesses managing multi-site portfolios, the need for reviews is even greater. With sites spread across different regions or distributors, you could be dealing with a patchwork of tariff codes – perhaps Ausgrid codes for your NSW stores, Energex tariffs in Queensland, and Western Power reference tariffs in WA. Each region’s network might introduce new tariffs or adjust thresholds periodically. Keeping track of these changes can yield opportunities for savings.

A multi-site business might also have the tendency for sites to be left on “set and forget” tariffs from years ago. Perhaps you acquired a new site and just kept whatever code the previous occupant had. That site could be on a legacy tariff that is far from optimal. By reviewing all sites, companies have often discovered that a number of their locations were paying excess network fees that could be avoided. 

Importantly, tariff reviews should be part of your routine energy management. Prices and circumstances change regularly. Network tariffs tend to change over time, and it’s important to continually check whether your current tariff is still right

That’s where Termina can help. Unlike other brokers, Termina only gets paid when we find you savings, so it’s in our best interest to find the tariff codes that will save you the most money. Importantly, Termina continues to work automatically in the background for all of your sites.