Time-of-use tariffs and Demand charges: good for consumers or rip-off?

TOU: Over the last 3 years time-of-use (TOU) tariffs have become more prevalent. With some retailers, it’s the default tariff they offer. Be careful! TOU really only benefits the customer if and when you are in total control of your time. Total control means you have the privilege to chose at which times of the day you run your power hungry devices and appliances. TOU means you pay a high price for electricity during peak times, a moderate price during the ‘shoulder’ period and a low price at times when no-one else is using much electricity (at night after 10pm or certain weekend hours).
For most working people, families and others who love to cook at 6PM and run the aircon when they feel hot, TOU is costing more money than a flat tariff.

Demand tariff: for residential customers they are perhaps the most devious charge one can imagine. Think of this:
– You are billed monthly. Your typical peak demand (the highest power in kW you on average draw form the grid) is 3kW. You pay a demand charge of, say, 15 cents per kW used.
– One day of the month, for only 30 minutes, you draw 10kW form the grid because you are cooking with 3 hot plates on and the aircon is running. For this one occasion in a month your demand charge will be AS IF YOU HAD USED 10kW EVERY HOUR OF THE DAY FOR THE ENTIRE MONTH. That is 15 cents x 10kW, not 15 cents x 3kW per day!
Sounds great, doesn’t it? It is, but only for the electricity retailer.
TIP: Try to avoid tariffs with demand charges unless you think you can control your habits by not using several electrical devices at the same time.