Every electricity bill is built from two building blocks
Strip away the marketing and every Australian electricity plan charges you in two ways. The first is the daily supply charge — a fixed amount you pay for each day you are connected, whether you use any power or not. The second is the usage rate — the cents you pay for each kilowatt-hour (kWh) of electricity you actually use. A plan with a low usage rate but a high supply charge can easily beat a plan with the opposite mix, or lose to it, depending entirely on how much power you use. That is the first reason there is no single cheapest retailer.
On top of those two blocks sit the extras that decide the real bill: your solar feed-in tariff (what you are paid for exported solar), any membership or sign-up credits, and the shape of your usage across the day if you are on a time-of-use tariff. Two plans that look almost identical on the headline usage rate can produce very different bills once these are applied. This is why comparing on a single advertised number is close to meaningless, and why <a href="/electricity">comparing plans on your real usage</a> is the only reliable method.
Market offers, standing offers and the reference price
Retailers sell two broad kinds of plan. A standing offer is the default, safety-net plan a retailer must make available; its price is capped by a government reference price — the Default Market Offer (DMO) in New South Wales, South Australia and south-east Queensland, and the Victorian Default Offer (VDO) in Victoria. Standing offers are rarely the cheapest thing on the market; they are a fallback, not a deal.
A market offer is everything else — the competitive plans retailers actually advertise, usually priced below the reference price to win your business. By law, retailers express a market offer as a percentage against the reference price (for example, "X% less than the reference price"), which gives you a rough yardstick for comparing headline value between retailers. It is only a yardstick, though: the reference price is based on a model household, not yours, so a plan that looks better against the reference price is not guaranteed to be cheaper for your actual usage. Our <a href="/resources/default-market-offer-explained">guide to the Default Market Offer</a> explains the reference price in more detail.
Conditional discounts, guaranteed discounts and the fine print
This is where retailers differ most, and where households most often overpay. A guaranteed discount is applied no matter what — it is baked into the rate. A conditional discount only applies if you meet a condition, most commonly paying every bill on or before the due date. Miss one due date and the discount can vanish for that bill, which quietly turns an advertised "cheap" plan into an expensive one. Some retailers lean heavily on large conditional discounts; others advertise smaller but guaranteed savings. Neither is automatically better — it depends on whether you reliably pay on time.
The trap is comparing a big conditional discount against a smaller guaranteed one as if they were the same thing. They are not. When you compare retailers you have to read whether a discount is guaranteed or pay-on-time, and whether it applies to the whole bill or just the usage charges. A tool that costs the plan properly folds these conditions in for you rather than taking the headline number at face value.
Benefit periods, price changes and demand tariffs
Many competitive plans come with a benefit period — the discount or special rate is only promised for a set time, often 12 months. When it ends, you are usually rolled onto the retailer’s ongoing rates, which can be materially higher, and retailers are not obliged to ring you the day it happens. A large share of households who "found a great deal" are overpaying simply because their benefit period quietly expired and nobody re-checked. This is the single biggest reason to compare again every year rather than once.
A newer wrinkle is the demand tariff, increasingly common as networks roll out smart meters. On a demand tariff you pay not just for total energy but for your highest burst of power draw in a defined window (measured in kilowatts), so running several big appliances at once can cost you even if your total usage is modest. Demand tariffs suit some households and punish others, and they make plan-to-plan comparison genuinely hard by hand. EnergySorted costs every plan — flat, time-of-use and demand — against your real interval usage, ranks them cheapest-first, and proves the result against your current bill, taking no retailer commissions so the ranking answers only to you.